Strategic Retail Management Essays

Strategic Retail Management Essays Strategic Retail Management Paper Strategic Retail Management Paper People need a lot of things from their basic things to their luxuries and wants. They turn to the sellers of the merchandise that they need. These sellers may be small retail business owners or big ones such as a department store. Retailing is an important feature of the economy in distributing goods and services from the producers to the people who need them. Retailers usually purchase large amounts of goods from producers, manufacturers or from wholesalers. A quick glance at the supply chain from the production factories would reveal that retailers are at the bottom rung of the chain. Retail stores or shops are usually located where the people are. If people will have to travel long distances just to go to retailers, their business will not grow. Since retail shops are where people go to for their basic needs, they usually develop a connection with their favorite shops. Not a few develop loyalty to the shops they frequently go to. The Retail Environment There are different kinds of retail environments that people may go to. Traditionally sellers and buyers converge on markets. Markets, however, have been supplanted by the rise of malls and big supermarkets. Some retail environments may be in the form of stores where an attendant gets what the customer wants. There are also self-service shops where the customers just get what they want and then pay at the cashier. In stores and shops, however, what can be noted is that the traffic of people never stops. There is interaction most of the time. The retail environment is a place where the economic relationships of people can be highlighted. Yet, such relationships are not only economic, both buyers and sellers may also develop social connections through the retail environment (Berman Evans, 2006). Morale and Motivation at the Retail Environment The morale and motivation of the workers in a retail environment is very important to its operations. A motivated workforce will mean that they will also transfer that motivation to the customers that will visit the shop. In order to facilitate this, the workers at the retail shop should enjoy certain benefits and privileges. In this regard, the retail environment should have clear role perceptions, motivation from the manager or owner, and ability, which can be enhanced through training (Weitz, Sujan, and Sujan, 1986). If the management of the retail shop can ensure the motivation of its workers, this would redound to better customer service to the consumers. In a study conducted by Kim, Kang and Kim (2005), they discovered that there are several dimensions of retail shopping motivation from consumers, especially those who are older. They can either consume service, value and food or they can engage in shopping for diversion and leisurely appreciation of aesthetics. Through the model created by these researchers, they found out that people who are lonely and in need of social interaction tend to go to malls and retail shops. Through their experience at the retail shops, their loneliness can be lessened. In this regard, the workers of a shop can make buyers happier by helping them in value consumption and provide them good services (Kim, Kang Kim, 2005). Such kind of motivational spirit would work well if the workers themselves have motivation and if they have high morale. In times of sadness and loneliness, then the workers at the retail shop could also help people become more cheerful. Retailing Trends for Small Businesses One of the most interesting developments in retail management is in two areas, both of them involving technology deeply. Supply chain management is now increasingly integrated with computer applications that enable store owners to manage their inventories more effectively. The technology is also becoming more affordable so even small businesses can afford it. With the availability of online applications, retail management has become more technologically dependent (Krafft Mantrala, 2005). Another important development in retailing is the increasing popularity of the Internet as the place to shop. With credit cards and online payment schemes, more and more people, especially the busy ones, are depending on the Internet and their credit cards for their purchases. If it is any indication, the success of Ebay and other online shopping sites have also led to the emergence of a new kind of entrepreneurs and retailers who are using the Internet in marketing their products. Whatever their products are, they are now able to reach out to a wide segment of buyers not only in their immediate vicinity but also to the whole world (Krafft Mantrala, 2005). This internationalization of retail management has an important impact on the operations of businesses as well as in their business model. With the integration of the Internet as an effective marketing arm, it supplements the traditional marketing media being used by retailers. The internet also helps small retail businesses to get in touch with their customers more quickly and instantaneously. In doing so, they can easily get feedback from them and act on such feedback right away. As such, the marketing aspect of retailing, the interfacing with customers, and the gathering of feedback becomes easier because of the Internet and other online applications. With the internalization of retailing, however, businesses need to think more creatively about their strategy in reaching out to their target market. Another important thing to think about is how to motivate and raise the morale of the customers similar to what they experience when they go to retail centers or to malls. Obviously, retailers also need to take into account the value added needs of the customers that would contribute to a better experience to them when they are shopping online or on site. Apparel shopping on the Internet has been growing in the past few years yet there are hesitations on the part of shoppers to buy clothing over the Internet. This is because of the perceived risks in buying items there. For one, buyers do not get the same visual and texture sensation when they shop on a store. They cannot try on an item of clothing shown online. Given this limitations, retailing through commerce should appeal to other aspects of the buyer experience (Park Stoel, 2002). The Future of Retail Retail management will not be relegated to the dustbins of history. Although economic recession may facilitate the rise and fall of different means of product distribution and retail management but as long as people need goods and services, retailing will remain as a key feature of the country’s economy. Yet the future of the retail industry is worth looking at. Dawson (2000) identified six major challenges to retail management. These challenges have to be addressed in order for retailers to thrive in their industry. The first one is about the challenges of growing and â€Å"bigness†. Big supermarkets and retail chains are on the rise and these industry giants are undermining the small-time players. As such, small and medium businesses should think of creative ways to survive the intense competition. Secondly, brands are highly arbitrary, always in flux and subject to constant change. Choosing which brands to market and distribute may be a crucial issue for retailers. Another challenge would be the over-capacity of the space for retailing. This would refer to the need for careful management of space and buildings of retailers to ensure that both aesthetics and functionality are ensured. In addition to this, changes in the products and services being marketed tend to be abrupt and turbulent. Even the tastes and preferences of consumers can easily change. Retailers therefore should be quick to understand the dynamics of the market so they can prepare for difficulties and problems along the way. The past decade has seen the rise of outsourcing and offshoring in the discussion of business models, processes and services. The challenge that retailers need to address in this area is achieving the balance between internalization and outsourcing of functions. Outsourcing may be an option for businesses but if overdone, it could easily be a source of fragmentation in the business and the loss of trade secrets. Lastly, retailing through e-commerce is yet to prove itself as effective. In order to deal with these challenges, Dawson (2000) recommends several areas that retailers need to look at. One is making the retail firm relevant to the times and to the changing preferences of consumers. There should also be an effective assessment of the risks that the retail firm faces. Another important aspect is to remodel the organization, establish an effective means of gathering knowledge, which will help in development the corporate culture of the firm. Competition is definitely a big issue in retailing. As such, effective strategies should be devised to deal with globalization and competition from large scale companies such as Wal-Mart (Dawson, 2000). Conclusion Retailing will remain as a very important feature of the country’s economy. Actual retailing helps customers with their needs for various products and services. Retailing also gives consumers value added. Through the act of being at the retailer’s shop or store, the loneliness and sadness of certain people can be alleviated. This is not something that people can easily enjoy in huge shopping complexes and warehouses. In spite of big challenges in the retail industry, there are still those that manage to survive. There are also those, however, that cannot cope with the difficulties of the industry and are forced to close or to seek for ways to mitigate their losses. Wendy’s Hamburger has experienced losses in the last two years or so. Some of its stores are no longer visited by customers. Big franchises of the hamburger chain also closed down. Some of the most notable ones are those that are in Australia. Likewise, fifty Wendy’s locations were closed in the United States just recently. This trend could be attributed to intense competition from other hamburger retail chains most notably, McDonalds. More importantly, though, the chain was not able to create a brand name for itself similar to BigMac or Whopper (Wolf, 2007). Retailers can learn valuable lesson from this. Branding is very important in facing the intense and uncertain competition in the world of retailing. Retail management is a difficult business but if the trends in the market can be anticipated, then the right action can be done to make the business thrive.