Retailing Management Strategies

Strategy 1 – Pursuing Geographical Expansion

Napoleon, 1811
1) Acquiring real estate at the right price - good positioning will eventually facilitate various stakeholders' accesibility.
2) Developing the Supply Chain – logistics in facilitating smooth operations. Supply chain development represents a sustainable competitive advantage for a retailer.
3) Recruiting, selecting and training the store personnel
4) Building the Brand – store equity.

Zara - the Spanish clothing brand - is a clear example of a global retailer that has gained growth and profits based on an effective supply chain approach into markets (Devangshu Dutta, 2002). Zara in fact is the flagship brand of the Spanish Retail Group Inditex SA one of the super-heated performers in a soft retail market in recent years.

Inditex is one of the world's largest fashion retailers, welcoming shoppers at its eight store formats -Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - boasting 5.527 stores in 82 countries. The Inditex Group is made up of more than 100 companies operating in textile design, manufacturing and distribution. The group's success and its unique business model, based on innovation and flexibility, have made Inditex one of the biggest fashion retailers in the world. Their approach to fashion – creativity, quality design and rapid turnaround to adjust to changing market demands - has allowed the company to expand internationally at a fast pace and has generated an excellent public response to their collections. The first Zara shop opened in 1975 in A Coruña, Spain, a city in which the Group first began doing business and which is still home to its headquarters. Its stores can now be found in prime locations in more than 400 cities in Europe, the Americas, Asia and Africa.Zara contributes around 80% of the sales of the group concentrates on three winning formulas to "bake" its fresh fashions:
A) Short Lead Time = More fashionable clothes
B) Lower Quantities = Scarce supply
C) More Styles = More choice, therefore more chances of hitting the right customer, at the right time with the right type of merchandise.

It is pretty amazing but Zara as a global brand instead of producing more quantities per style, produces more styles-roughly 12,000 per year (Devangshu Dutta, 2002). This is indeed a Service-Dominant (See, Vargo and Lusch, 2004, 2008a, 2009) business approach. The company's management proactively listens to the customers' needs and wants and prepares new styles to fit every possible requirement. In this sense, even if a style sells out very fast, there are new styles waiting up in the line to take up the space. Observing the strategy from a services marketing point of view, it looks so much customer-oriented that it has attracted my attention.

Strategy 2 - Improving Product Selection

1) Understanding Category Profitability
2) Eliminate unprofitable products
3) Manage the product offering

Strategy 3 – Increasing Customer Value

1) Understanding Customer Profitability
2) Targeting desired customers – CRM and CVM approaches
3) Managing Customer Value

Working with a "passion for the customer" is somehow the edge of a customer-oriented business philosophy.

Should a dynamic retail organization select one of the above mentioned strategies in sustaining growth and profitability or should they develop their own "success business receipe"?

Let's be honest not all retailers - all around the globe - are interested to become a "breakthrough retailing firm".
My business advice to a mid-sized retailer is to:
A) Maintain a clear, systemic business orientation,
B) Invest human and financial resources incorporating a sound marketing infrastructure - the supply chain management is part of it and
C) Be confident that innovative marketing pays off.