Main Content
Lesson 2: Retail Strategic Planning
Strategic Windows of Opportunity
Retail activities do not take place in a vacuum; they take place in a macro environment (sometimes called the external environment) that is rather volatile, in a constant state of change. At least in the short run, retailers cannot control the changes taking place in the environment. Instead, they must adapt to the current changes and prepare for future changes. By systematically analyzing the environment, companies search for strategic windows of opportunity.
Retailers look for strategic windows of opportunity by identifying and responding appropriately to unfulfilled consumer needs and emerging marketplace trends. Retailers search for lucrative market opportunities, trying to understand trends and megatrends and to avoid possible threats in the market environment. The role of a SWOT analysis (Step 2 of the strategic retail planning process) is to uncover present and future influences on the retailer.
Read about the specific market, competitive, and environmental factors that can impact a retailer in this lesson's assigned textbook reading. Think about some of the environmental changes occurring today. For example, people are more health conscious about the food they eat (e.g., organic produce and meats), more concerned about the environment (e.g., sustainability), and more interested in making experiential purchases (e.g., traveling to Bora Bora).
How will these changes affect retailers? Do they create any specific opportunities or threats?
Have you ever heard of TreeHouse? It was a home improvement retailer but very different than Lowe's or Home Depot. It offered "a carefully curated selection of products and services that promoted healthful and sustainable living spaces, with an emphasis on performance and design. Every product was scored based on health, performance, corporate responsibility and sustainability" (Wilson, 2016, para. 5). TreeHouse had responded to a window of opportunity—that is, consumer preferences for more sustainable products and services. The retailer ran into financial problems. Do you think that only specific demographic groups and areas of our country would be receptive to this type of retailer? Would you be willing to pay more for these types of products? Unfortunately, the retailer could not meet its financial goals and went out of business in 2018.
Have you ever heard of Allbirds or seen their commercials? They are a direct to consumer (DTC) shoe retailer that was launched in March of 2016 based on the premise of providing "simple, well-designed and comfortable shoes" made from environmentally friendly materials. Does anyone own a pair of Allbirds? I bought my sons (age 21 and 27) Allbirds as presents at Christmas last year.
What makes them unique? How have they taken advantage of a strategic window of opportunity? Click here to read the article by Cara Salpini (2019). How did Allbirds take advantage of "conscious consumerism"? Do you agree or disagree with Allbirds' co-founder that "sustainability is not why people buy things"? Why or why not?
References
ChangeUp Inc. (2017, Spring). The New Shopper Mindset. Uptake: A ChangeUp newsletter. Retrieved from https://www.changeupinc.com/wp-content/uploads/2017/12/Q1-2017-Newsletter-050117-2.pdf
Hartley, R. F. (2009). Marketing mistakes (11th ed.). Hoboken, NJ: John Wiley & Sons, Inc.
Retail Industry Leaders Association (2018). Sustainability / Environment. Retrieved from https://www.rila.org/sustainability/Pages/SustainabilityHome.aspx
Salpini, C. (2019, April 22). For the birds: This DTC brand is flying high on sustainable wings. Retrieved from https://www.retaildive.com/news/for-the-birds-this-dtc-brand-is-flying-high-on-sustainable-wings/552698/
Wilson, M. (2016). TreeHouse ready to branch out with more stores. Chain Store Age. Retrieved from https://www.chainstoreage.com/news/treehouse-ready-branch-out-more-stores/