The 5P's (planning, promotion, placement, pricing, and people) are the cornerstone of any solid retail strategy. This is true for both manufacturers and retailers. Working together, they can develop strategies that benefit both. The primary objective of any strategy should be to create loyal committed customers.
Consumers are inundated by offers from competing retailers every day. Most consumers cherry-pick specific retailers to fill only part of their needs. A solid strategy should include addressing as many consumer needs as possible; the goal is to keep them shopping at your store instead of your competitor.
Do this through The 5P's
Product placement is critical. Consumers want stores that are easy and friendly to shop. Items should be grouped together by kind and by category. Segmenting can break up the category to make it easier to shop. Segments can be grouped by quality, color, scent, style, type and more.
Another component of placement is product assortment. Customers want the top items available in the market in addition to specialty or niche items that meet their needs. The goal here is to have a broad assortment without too many duplicate items. Retailers should not overly limit items available-for-sale. Customers make judgments about retailers based upon their assortment: too few items and they perceive the assortment to be poor and too many items confuse customers. The proper mix includes the top-selling items as well as specialty or niche items that differentiate your store from the competition.
This can be one of the more difficult strategies to master. A high price point might encourage a consumer to shop your competition while a low price point gives away valuable margin. Pricing should include strategies that help you remain competitive in your market. Keep in mind that most consumers will pay a premium if they see the value of your products. Consumers want a quality product for fair price.
Branded products offer the promise of quality, they bring innovation to the category and are custom designed to meet specific customer needs. Customers shop branded items first. For this reason, retailers should have strong brand strategies that encourage customers to shop their store instead of the competition.
Private label provides an additional choice for consumers based primarily on a lower price point. Private label items should be merchandised next to national brands. Consumers choose private label at the shelf.
Promotion is what drives excitement in your store. Promotion strategies highlight your commitment to being the leader in your market. Promotions include pricing and merchandising strategies that encourage new customer trials. Strategies should be designed around the goal of increasing consumer traffic.
Your strategies will highlight your commitment to being a leader in the market. Some retailers make the mistake of assuming they know what their customers want without really listening to what they're saying.
The perfect balance of the 5P's will increase consumer traffic in your store, build consumer loyalty, and help you remain competitive in any economy.
How do you plan to implement the 5P's?