Retail Planning | 1 min read

7 Stages of Retail Planning- A Step by Step Guide

7 stages of retail planning a step by step guide
Chloe Henderson

By Chloe Henderson

In order for businesses to control inventory, implement marketing campaigns, and manage the supply chain, they need retail planning strategies. Retail management cannot adequately promote products and define merchandise assortment without a detailed plan that outlines the four W's-

  • What to sell
  • When to sell
  • Where to sell
  • Who to sell to
In addition to merchandise planning, companies must also set clear goals and define the necessary steps to achieve them, especially within their marketing ventures. Strategic planning covers how a business can cross-channel market their goods and brand to maximize customer reach while optimizing inventory management and internal workflow.

7 Steps of Retail Planning

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The planning process requires a thorough look into the company's motives to determine what strategies to implement. While it may be time-consuming, drafting a detailed plan is essential for successful execution. Retailers can begin by following seven general steps-

1. Set Goals

Businesses need to set specific short and long-term goals. Instead of setting a general objective to increase sales, management should set benchmarks regarding which product performances need to improve, specific revenue goals, and ideal profit margins for each item.

Companies can further break down their goals into two categories-

  • Internal Objectives
Retail management should pull reports and set practical sales and revenue goals based on product performance. Organizations can set clear monthly, quarterly, and annual targets to motivate employees and keep them focused on boosting sales.

  • External Objectives
External goals refer to a retailer's overall performance according to customers and their experience. This can include customer service, retention, loyalty, and product pricing. Companies should aim to create a personalized experience that attracts and generates returning customers.

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2. Analyze the Market

Once the company's objectives are clearly defined, it is time to analyze the current market. Research can expose competitors' strategies, performance, and weaknesses, as well as consumer expectations. This allows companies to develop a plan of action that fulfills customer needs and stands apart from the competition.

Research can also define any risks and opportunities the company may be exposed to and how to respond. Retailers can anticipate upcoming events through risk management and planning, so they are not caught off-guard. Through this process, businesses can analyze their own strengths and weaknesses, allowing them to improve the necessary areas. This may include financial planning, resource allocation, and staffing.

3. Analyze Customer Behavior

If a company does not understand their target audience, they cannot correctly launch and promote products to attract customers. Therefore, retailers need to understand what consumers expect from products and brands.

First, companies must understand what types of demographics are in the market for their products. Then they can innovate customized experiences and brand images to attract audiences. However, retailers should continuously monitor customer feedback and preference to avoid becoming irrelevant or stagnant.

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4. Outline Retail Strategies

After determining target demographics, marketing teams can begin developing effective promotions for their products and company identity. The retailer must establish a positive image that not only attracts customers but accurately illustrates what they can expect as well.

Another main objective of implementing a retail strategy is to remain competitive. Businesses can achieve this through several methods, such as product pricing, variety, and quality. Providing a unique experience that customers cannot receive anywhere else is a significant advantage.

However, businesses must stay up to date with current market trends as they are ever-evolving. Without access to current metrics, marketing strategies can become ineffective.

5. Make Short-Term Plans

Based on the company's short-term goals, management needs to outline a step-by-step plan to achieve key metrics. For example, if an organization wants to improve its sales during the Christmas season, it can focus on targeted marketing tactics and floor design to increase traffic flow. This can include running digital campaigns, commercials, and exclusive deals. Management can also redesign the storefront to attract shoppers passing by.

However, retailers should begin the planning process months in advance to ensure all resources are properly allocated. Otherwise, businesses may lack sufficient funds to supplement plans due to poor organization.

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6. Implement Strategies

Once the market and customers have been analyzed, goals have been set, and plans are outlined, companies can begin implementing their strategies.

Management should understand that some methods might require additional changes to the business model, staffing, accounting, or supply chain. These alterations may be met with employee reluctance, as they may have to handle more responsibilities.

However, with successful planning, staff can ease into their new roles to avoid overwhelming team members. Companies should consider offering incentives and bonuses if the employees adapt well and the strategies improve work performance.

7. Analyze the Strategy Performance

Once the methods are implemented, organizations must continuously monitor performance to ensure improvements are consistent. The regulation also helps identify any errors within a process so management can quickly reconcile any damages. Companies can also take note of the strengths and weaknesses to streamline future planning.

Retail planning is vital for defining business objectives and maintaining a foothold in a competitive market. Without a detailed plan, retailers can exhaust time and resources on ineffective marketing tactics. A comprehensive retail plan ensures that employees are working in unison to provide the best service, products, and experience, boosting company revenue.