Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation (also known as physical evidence). The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format (i.e. retail formula) should be included.Constantinides, E., "The Marketing Mix Revisited: Towards the 21st Century Marketing", Journal of Marketing Management, Vo. 22, 2006, pp. 422-423 The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing (see diagram at right).Berens, J.S., "The Marketing Mix, the Retailing Mix and the Use of Retail Strategy Continua", Proceedings of the 1983 Academy of Marketing Science (AMS), [Part of the series Developments in Marketing Science], pp. 323–27Lamb, C.W., Hair, J.F. and McDaniel, C., MKTG 2010, Mason, OH, Cengage, pp. 193–94
Product See Product management
The primary product-related decisions facing the retailer are the product assortment (what product lines, how many lines and which brands to carry); the type of customer service (high contact through to self-service) and the availability of support services (e.g. credit terms, delivery services, after sales care). These decisions depend on careful analysis of the market, demand, competition as well as the retailer's skills and expertise.
Product assortment
The term product assortment refers to the combination of both product breadth and depth. The main characteristics of a company's product assortment are:Business Dictionary, http://www.businessdictionary.com/definition/product-assortment.html
(1) the length or number of products lines the number of different products carried by a store (2) the breadth refers to the variety of product lines that a store offers. It is also known as product assortment width, merchandise breadth, and product line width.: (3) depth or number of product varieties within a product line the number of each item or particular styles carried by a store (4) consistency how products relate to each other in a retail environment.
For a retailer, finding the right balance between breadth and depth can be a key to success. An average supermarket might carry 30,000–60,000 different product lines (product length or assortment), but might carry up to 100 different types of toothpaste (product depth).Broniarczyk, S.M., "Product Assortment", in Handbook of Consumer Psychology, 2006 Speciality retailers typically carry fewer product lines, perhaps as few as 20 lines, but will normally stock greater depth. Costco, for example, carries 5,000 different lines while Aldi carries just 1,400 lines per store.
Large assortments offer consumers many benefits, notably increased choice and the possibility that the consumer will be able to locate the ideal product. However, for the retailer, larger assortments incur costs in terms of record-keeping, managing inventory, pricing and risks associated with wastage due to spoiled, shopworn or unsold stock. Carrying more stock also exposes the retailer to higher risks in terms of slow-moving stock and lower sales per square foot of store space. On the other hand, reducing the number of product lines can generate cost savings through increased stock turnover by eliminating slow-moving lines, fewer stockouts, increased bargaining power with suppliers, reduced costs associated with wastage and carrying inventory, and higher sales per square foot which means more efficient space utilisation.
When determining the number of product lines to carry, the retailer must consider the store type, the store's physical storage capacity, the perishability of items, the expected turnover rates for each line, and the customer's needs and expectations.
Customer service and supporting services
Customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from [the] retail establishment." Retailers must decide whether to provide a full service outlet or minimal service outlet, such as no-service in the case of vending machines; self-service with only basic sales assistance or a full service operation as in many boutiques and speciality stores. In addition, the retailer needs to make decisions about sales support such as customer delivery and after sales customer care.
Retailing services may also include the provision of credit, delivery services, advisory services, exchange/ return services, product demonstrations, special orders, customer loyalty programs, limited-scale trials, and a range of other supporting services. Retail stores often seek to differentiate themselves along customer service lines. For example, some department stores offer the services of a stylist; a fashion advisor, to assist customers in selecting a fashionable wardrobe for the forthcoming season, while smaller boutiques may allow regular customers to take goods home on approval, enabling them to try out goods before making the final purchase. The variety of supporting services offered is known as the service type. At one end of the spectrum, self-service operators offer few basic support services. At the other end of the spectrum, full-service operators offer a broad range of highly personalised customer services to augment the retail experience.Lambda, A.J., The Art Of Retailing, McGraw-Hill, New Delhi, 2008, pp. 351–411
When making decisions about customer service, the retailer balances the customer's requirement for service against the customer's willingness to pay for the cost of those services. Self-service reduces costs because the customer performs various retail tasks. However, some customers prefer full service and pay more for that level of service.Lambda, A.J., The Art Of Retailing, McGraw-Hill, (2003), 2008, p. 267
A sales assistant's role typically includes greeting customers, providing product and service-related information, providing advice about products available from current stock, answering customer questions, finalising customer transactions and if necessary, providing follow-up service necessary to ensure customer satisfaction.Philip H. Mitchell 2008, Discovery-Based Retail, Bascom Hill Publishing Group For retail store owners, it is extremely important to train personnel with the requisite skills necessary to deliver excellent customer service. Such skills may include product knowledge, inventory management, handling cash and credit transactions, handling product exchange and returns, dealing with difficult customers and of course, a detailed knowledge of store policies. The provision of excellent customer service creates more opportunities to build enduring customer relationships with the potential to turn customers into sources of referral or retail advocates. In the long term, excellent customer service provides businesses with an ongoing reputation and may lead to a competitive advantage. Customer service is essential for several reasons. Firstly, customer service contributes to the customer's overall retail experience. Secondly, evidence suggests that a retail organization that trains its employees in appropriate customer service benefits more than those who do not. Customer service training entails instructing personnel in the methods of servicing the customer that will benefit corporations and businesses. It is important to establish a bond amongst customers-employees known as Customer relationship management.
Types of customer service There are several ways the retailer can deliver services to consumers:
Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewellery) and controlled items like medicine and liquor. Curbside pickup, where orders are placed online, via a mobile app, or called in, then the customer picks up the product on the property of but outside of the physical store. The coronavirus pandemic is making curbside pickup much more valuable to customers Ship to Store, where products are ordered online and can be picked up at the retailer's main store Delivery, where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalogue was invented in 1744 and was common in the late 19th and early 20th centuries. Ordering by telephone was common in the 20th century, either from a catalog, newspaper, television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery), remaining in common use for food orders. Internet shopping – a form of delivery – has eclipsed phone-ordering, and, in several sectors – such as books and music – all other forms of buying. There is increasing competitor pressure to deliver consumer goods – especially those offered online – in a more timely fashion. Large online retailers such as Amazon.com are continually innovating and as of 2015 offer one-hour delivery in certain areas. They are also working with drone technology to provide consumers with more efficient delivery options. Direct marketing, including telemarketing and television shopping channels, are also used to generate telephone orders. started gaining significant market share in developed countries in the 2000s. Door-to-door sales, where the salesperson sometimes travels with the goods for sale. Self-service, where goods may be handled and examined prior to purchase. Digital delivery or Download, where intangible goods, such as music, film, and electronic books and subscriptions to magazines, are delivered directly to the consumer in the form of information transmitted either over wires or air-waves and is reconstituted by a device which the consumer controls (such as an MP3 player; see digital rights management). The digital sale of models for 3D printing also fits here, as do the media leasing types of services, such as streaming.
Place Place decisions are primarily concerned with consumer access and may involve location, space utilisation and operating hours.
Location Also see Site selection