Chapter 1: Retailing Strategy

Watching the Trends

Uncontrollable trends do affect your business and there is nothing you can do about them. However, what you can do is be aware of them and make plans for any changes they may create. By keeping an eye on these external events, you can often discover new opportunities ahead of the competition, or at least avoid significant economic loss from negative consequences.

Watch for key trends that involve the following groups or topics:

1. Consumers
2. Competition
3. Economy
4. Government Policy
5. Technology
6. Industry

1. Consumers

Are your customers becoming more value-conscious? Or is conspicuous consumption starting to regain its former stature?

By analyzing your sales history and staying current with trade literature and business magazines, you can often anticipate and prepare for significant changes in consumer buying patterns. Those who do "keep their finger on the pulse" know that many people predicted the consequences of the aging baby boomers. Now you can see the huge impact of this trend in many sectors (e.g. pharmaceuticals).

2. Competition

The entrance of competitors into your trading area can have a significant effect on your business. Awareness of this activity can be your cue to refocus your concept. Listen to suppliers, developers and the media. Information is power, and in the case of competition, just may represent survival.

3. Economy

Generally speaking, there are not too many surprises where the economy is concerned. Most upswings and downturns are predicted well in advance. Knowing which way the economy is heading can help you make strategic decisions about expansion, renovations and other investments.

4. Government Policy

Be aware of pending changes to government policy. For example, if you are located in an area that depends on the patronage of civil servants and the government is aggressively looking to reduce its workforce, you can anticipate a potential negative impact on your business.

Similarly, if the government is about to introduce new small business training programs or employment incentives, you need to determine how to take advantage of these positive changes.

5. Technology

Faster and cheaper. Those are two words that explain the general state of technology available to retailers. What new technologies are coming to the forefront in your market sector? Attend trade shows, read trade literature and watch your competition to see what's new out there. You've got to keep up the battle on the productivity front and technology just might be the answer.

6. Industry

Retail has been changing so fast it's hard to keep up. The "big box" concept, retail globalization, online retailing and power centers all play an active role in today's marketplace. How are these and other industry trends affecting your store?Nothing should ever catch you by surprise. Stay informed!

Your Competitive Strength

Identifying who your key competitors are and understanding their strengths and weaknesses relative to your own store are key factors for every retailer. As discussed earlier, retailers must dominate a key area of the marketplace and accomplishing this requires a thorough understanding of the competition. Once you understand how you compare to your competitors, you can make plans to improve.

The Competitive Assessment outlined on the next page is an excellent tool to measure your relative strengths and weaknesses.