Retailers in Marketing

Retail Marketing Strategies

Developing and executing the right retail marketing strategies is the key to gaining a competitive advantage and achieving higher ROI – return on investment.

Retail marketing strategy: Segmentation and targeting

The first step is to segment the market to identify the target audience. The market data about consumer preferences, buying patterns, and demographics could help identify the target audience. Once the target audience is identified, develop strategies to cater to their needs effectively.

Retail marketing strategy: Differentiation and positioning

It is important for retailers to differentiate themselves by creating a distinct position in the market. It helps because prospective customers have a variety of options in terms of retail stores. Retail stores could differentiate themselves based on the product/service offered and the target market they want to focus on. For instance, a discount retail store takes a position based on pricing i.e., offering low-pricing products.

Retail marketing strategy: Marketing mix

Product strategy refers to the kind of products customers can expect to find in the retail store. It is based on the preferences of the target audience. Products could be exclusive, store labeled, and tailored. For instance, if the customer base is variety-seeking, retailers will store a wide variety of products.

Pricing strategy has a big impact on customers. Retailers often opt for different kinds of pricing strategies. Competitive pricing and everyday low pricing are some examples of pricing strategies.

Promotion strategy deals with in-store and out-store advertising and the strategic placement of promotional messages in a store. Its aim is to attract customers toward a specific product.

Place strategy is about the store location. It is the most important strategy in retailing. Store locations must be accessible to customers and consistent with the retail positioning.

Fig. 2 - Ikea store

Characteristics of Retail Marketing

Retail marketing contains the following characteristics:

• Direct contact with customers – Retailing provides direct contact with the customers. It offers convenience to customers for shopping and giving direct feedback.

• Comfortable and safe environment – Customers must feel comfortable and safe while buying in a retail store. It makes the shopping experience a pleasant one for customers.

• Display and promotions at point-of-purchase – Products are displayed and promoted at point-of-purchase in a retail store. The transactions are completed in this area. It is ideal for promoting products to customers who could see them and make impulsive buying decisions.

• Limited shelf space – Retail stores have limited shelf space. Not all the products can make it to the shelves. Retailers place in-demand products on them.

• Customer relationship – It is an important characteristic of retail marketing to cultivate strong customer relationships. Store representatives help customers in the buying process. They also listen to their feedback. They answer customers’ questions instantly.

Importance of Retail Marketing

Retail marketing is the last link in the distribution channel and contributes significantly to customer satisfaction. It offers convenience to the customers and encourages them to shop more. It uplifts customers' lifestyles by offering them affordable products.

Retailers extensively research customers’ preferences and buying patterns. The market data could be used to improve a product and make marketing campaigns more effective. Retailing is a key component of a supply chain. Retailers buy products from either manufacturers or wholesalers and sell them directly to customers. They can offer a wide variety of products because they acquire products from different suppliers. The width of product assortment depends on the positioning and product strategy of the retailer.

Retailing plays a big role in the economic development of a country. Consumers spend daily on retail products, and the money circulates in the economy. Retailing also provides employment opportunities to the masses as it is one of the most important industries in the world.

Fig. 3 - Discounts in store

Types of Retail Marketing

There are three types of retail marketing, and these are used based on the marketing strategy:

• In-store retail marketing – Store locations can be used for various marketing activities. Retailers can launch a brand by organizing an event. The stores offer plenty of promotional opportunities such as point-of-sale promotions and discounts. Retailers strategically put some marketing messages in the store to grab customers' attention.

• Out-store retail marketing – Outside the store, retailers also have many marketing options. They can mail brochures to their prospective customers. Tv advertisement could be another good option, though it is more costly than other outdoor marketing options.

• Digital retail marketing – Retail marketing is also done via digital channels. Websites, social media marketing, and mobile marketing are being used extensively now.