Competing in the Age of Omnichannel Retailing - Case Study Example

Research on the Individual Assignment Name Institution Research on the Individual Assignment Executive Summary The purpose of the research was to assess the conditions or situation of Target Corporation with the intention of adopting the most effective and efficient retail strategies to improve the business performance of the entity. In the course of developing this report, the focus was on the utilisation of the PEST analysis tool in the process of examining the environmental factors affecting the achievement of the goals and targets of the organisation. In addition, the report focuses on utilisation or exploitation of appropriate retail marketing mix incorporating pricing and product strategies, retail channel strategy, consumer service/experience, branding, and positioning techniques in pursuit of competitive advantage. Summaries Situational Analysis PEST Analysis i. The Australian government focuses on enlarging domestic consumption needs through integrating of stimulating policies such as lowering of taxes on the retailers to improve performance of the business entities. ii. In the recent years, there have been negative development conditions in relation to the overall economy of Australia leading to adverse implications on the consumptions needs to the consumers in the marketplace. Nevertheless, deposit interest in the banking industry continues to record growth in the recent years. Tourist industry continues to enjoy pleasing development momentum, thus provision of the opportunity for the growth and development of retail industry. iii. The social condition of Australia is stable and secure, which is ideal in the provision of pleasing or appealing environment for the foreign investors to boost the national economic growth and development. iv. Internet technologies are critical in shaping interactions and opinions in relation to daily lives of the people within the context of Australia. The advancements are essential in enabling consumers to enhance their access to the various sorts of attractive products at their disposal in the marketplace. Technologies are critical in the automation of the processes and procedures relating to production and manufacturing products and services in accordance with the demands and expectations of the consumers, thus perfect platform for attainment of competitive advantage. Strategic Objectives From the theory of wheel of retail, Target is in need of exploration of the new market opportunities for the achievement of more pleasing or attractive business performance in accordance with the demands and expectations of the business entities, as well as consumers in various marketplaces. From the theory of life cycle, Target is on the way to decline, which is ideal in understanding the varying business performance in the case of Australia. Target comes out as a traditional brand of a big retailer in Australia exploiting good corporation population among consumers within the domestic retail market. From this perspective, Target focuses on the usage of the outstanding brand image developed in the previous stages of operations in the marketplace in the process of attracting the consumers in the Australian market. From these aspects, Target should focus on the improvement of its business performance under the influence of the following strategic objectives: i. To improve the market coverage through incorporation of appropriate and effective retail marketing mix ii. To establish admirable customer experience vital in realisation of improved image and reputation of the brand in the Australian and global contexts iii. To utilise effective and efficient advertising and promotional techniques to increase awareness of the existing and potential consumers on the existing products and services at their disposal iv. To improve profitability of the organisation while reducing or maintaining costs of operations and satisfaction of the needs and wants of the consumers Retail Strategies Target should consider the following retail strategies in the course of achieving improved business performance within the market and industry of transaction: i. The organisation should consider adoption and implementation of cost leadership approach to compete effectively with other department stores in the Australian market. ii. The organisation should focus on highlighting online shopping in the business development in future to attract more customers from the online Australian users. iii. Thirdly, it is crucial for the organisation to diversify its market segmentation to exploit series of market researches with the intention of exploring consumption needs of the customers, thus improvement of performance of the business. iv. The organisation should consider utilisation of online marketing techniques for increased market coverage and improved awareness of the consumers on the existing products and services in the market and industry of transaction. v. The organisation should consider stocking tourist products to maximise the growth and development in the tourism industry. Retail Marketing Mix In the course of developing this retail marketing mix, it is essential to under the demographics of the consumers or customers seeking to satisfy their needs and wants from the products by Target. From a gender perspective, Target focuses on providing products for men and women. The objective of the organisation is to reach or target a younger customer with medium and higher incomes in comparison to the competitors. The median age of the target audiences is 40, thus the youngest of all the major discount retailers in the globalised economy. It is essential to note that the median household income is approximately $64,000. Eighty percent of the consumers are women with 33 percent of the population having children at home. Similarly, approximately 80 percent of the target audiences attended college with 57 percent having completed college education. From this perspective, the institution focuses on the higher-end with the context of the retail market. This information is essential in adopting and implementing appropriate retail marketing mix with the intention of improving performance of the organisation within the market and industry of transaction. Retail Positioning Strategy In the course of developing and implementing appropriate retail positioning strategy, Target should focus on incorporation of six steps for effectiveness and efficiency. The first step should focus on the provision of the definition of the competitors within the relevant market and industry of transaction (Gammoh, Koh, & Okoroafo, 2015). Secondly, the organisation should establish the perception and evaluation of the competitors by the consumers under the influence of attribute possibilities. The third step should concentrate on the determination of the position of the competitors in the market prior to the next step relating to analysis or assessment of the consumers with the Australian market. The fifth step should focus on the integration of the positioning decision under the influence of economic analysis of diverse alternatives or options. The final step for the organisation should relate to monitoring and evaluation of the positioning strategy in accordance with the demands and expectations of the customers or consumers within the interest of interest such as the case of Australia. In this context, it is essential for the organisation to understand the above segments’ perceptions in relation to the potential and actual consumers. In addition, it is critical for the business entities to map competitors’ image and reputation positions prior to utilisation of the mindscape gap to position the products and services or the brand to address the needs and preferences of the consumers within the market and industry of operation. The approach is essential in generating the perfect platform for the development of the retail mix with the intention of reinforcing the positioning technique within the market. Branding Strategy Branding is one of the most essential or critical aspects of any business regardless of the size. Effective brand strategy is appropriate in the provision of a major edge in relation to the increasingly competitive markets. This is because of the influence of branding in making an impression on the consumers within the industry of interest. Figure 1: Target’s Logo The brand image associates with the red and white colours for clarity and precise in the illustration of the intention of the organisation within the industry and market of operation. The branding strategy associates with the message “expect more pay less.” From this perspective, the institution focuses on the utilisation of the low pricing model with the intention of attracting consumers into the stores. In addition, the approach is ideal in enhancing the image and reputation as one of the leading entities incorporating effective and efficient approaches in handling the demands and expectations of the business entity, as well as consumers (Melnyk, van der Lans, & van Everdingen, 2012). In order to improve the image and performance of the organisation, it is critical to consider transformation or improvement of this brand. The red dot in the middle of the circle is an illustration of the concept of target, which generates the conceptualisation of the name of the business entity. This is need for the organisation to maximise the presence of this logo in various locations with the intention of enhancing the awareness of the consumers on the existing products and services by the organisation. Advertising and Communications Strategy Advertising and communications strategy is essential in the improvement of the performance of an organisation within the market of interest. Business entities have the tendency of adopting and implementing different approaches in the course of advertising or marketing their products. In the course of marketing the products and services, Target should consider utilisation of the integrated communication market. This provides the opportunity for the organisation or business entity to maximise various elements such as direct marketing, personal marketing, online marketing, publicity, sales marketing, and traditional marketing techniques relating to billboards and television promotions. Under the influence of the cost leadership strategy, the approach will enable Target to reduce the costs in advertising or promoting products in accordance with the demands and expectations of the consumers. In addition, retailers will have the opportunity to reduce costs in promoting the products. These attributes will be ideal in the improvement of the performance of Target while facilitating reduction in the cost of operation in the midst of effective and efficient production and delivery of products and services. Figure 2: Integrated Communication Marketing Impersonal Marketing Sales promotion Website marketing CSR Advertising Store environment/atmosphere Personal Market E-mail marketing Personal selling Direct mail M-commerce Publicity Word of Mouth Pricing Strategy For the achievement of effective pricing strategies, it is ideal for the organisations to consider factors such as competition, cost of the product, legal constraints, and customer price sensitivity. Pricing is an essential aspect of the retail marketing mix because of its influence in the customers’ value equation. In order to improve its performance while exploiting the cost leadership approach, Target should consider utilisation of the everyday low pricing (EDLP) approach, which promises consumers the lowest available price in the absence of coupon clipping or waiting for the promotional discounts in relation to value pricing (Steenhuis, Waterlander, & de Mul, 2011). In the first instance, EDLP will enable the organisation to save time and expenses in relation to marketing or promoting each product in the market. In addition, the approach will enable the organisation to reduce volatility in the course of shipping and producing various products. The approach will be effective and efficient in the presence of low costs in line with the pricing strategy to address the demands and expectations of the business entities within the market and industry of transaction (Frazer & Stiehler, 2014). Merchandise/Product Strategy In the process of developing and implementing a product or merchandise strategy, it is critical for Target to focus on the utilisation of the information from the consumer profile or demographics. This is through utilisation of the assortment strategy. Figure 3: Assortment Strategy Narrow Wide Deep Specialty stores such as specialist image while utilising wide choice in few categories depending on the trends Department stores utilising one stop shop and broad target market under the influence of the diffuse image Shallow Convenience stores for the specific target market, high stock turns, thus low customer loyalty Discounters relating to high stock turns or broad audience leading to frustrated customer In this context, it is possible for Target Corporation to focus on the utilisation of the deep and wide assortment strategy in the course of adopting and implementing appropriate merchandise and product strategy in accordance with the above consumer analysis. The approach will enable the organisation to have variety of products and services at the retailing stores, thus the opportunity to maximise profits and revenues while reducing the costs of operations, manufacturing, and delivery of products and services (Chernev, 2003). The approach is essential in creating convenience and flexibility among the consumers seeking to maximise their need and wants through making the purchases. In addition, the approach will provide the opportunity for the organisation to enhance the chances in attaining sustainable competitive advantage in the market and industry of influence. On the other hand, the organisation will concentrate on the usage of the mechanism or technique to facilitate exploitation of the cost leadership strategy in the increasingly competitive market and industry of interest. Retail Channel Strategy The organisation should focus on the utilisation of omni-channel strategy, which focuses on putting the customer rather than the corporate silos at the centre of the strategy. According to this strategy, mobile, as well as social attributes continue to enable consumers to switch quickly between channels while also enjoying the capacity to use the channels simultaneously (Rigby, 2011). For instance, the organisation will enable the consumers to check out product reviews on their mobile technology while utilising the same platform to evaluate the product on the physical retail store shelf, thus effectiveness and efficiency in the market and industry of operation. From this perspective, the institution will concentrate on the maximisation of this retail channel strategy to engage with the consumers or brands in diverse ways across numerous platforms under the influence of consistent experiences. Moreover, the strategy will enable the organisation to create personalised conversations between customers and the brand with the intention of attaining sustainable competitive advantage (Brynjolfsson, Hu, & Rahman, 2013). Store Environment/Customer Experience & Service Strategy From a business perspective, a good location or store environment might let a retailer succeed even in the midst of a mediocre strategy mix. This indicates that the store environment is one of the critical aspects or elements of the retail marketing mix. Location comes out as the prime consideration in relation to customer’s store choice. In addition, organisations need to make appropriate decisions concerning store environment to facilitate achievement of the sustainable competitive advantage (Grewal, Roggeveen, Compeau, & Levy, 2012). In the course of adopting appropriate store environment, Target should consider assessment of four critical factors: strategic fit with the target market, competition, economic conditions, and costs of operating the relevant stores. In this context, the organisation should focus on the utilisation of the solitary sites concept with the intention of arriving at the most effective store environment. The approach will enable the organisation to improve convenience while increasing traffic, as well as visibility in accordance with the demands and needs of the consumers. In addition, the aspect will provide the perfect approach for separation from competition, thus maximisation of the few restrictions to improve performance of the business entity. There is also the opportunity for the organisation to reduce the occupancy costs, thus attaining the cost leadership position within the industry of interest. Target will focus on the utilisation of this approach to improve effectiveness and efficiency in addressing ever-changing needs of the consumers or target audiences in the case of Australia. From the customer experience perspective, Target should consider integration of the experiential retailing strategies. These are vital in the generation of outlets with the potentiality of capturing, as well as representing the brand’s essence. In addition, the strategies are ideal in balancing the functional components of the brand and the emotional target of the product in relation to the needs and expectations of the consumers within the market of interest. This relates to the ability of the organisation to create customer experience while improving the image and reputation of the brand, as well as the market coverage of the company in the retail industry or market in the case of Australia. It is essential to note that consumers have the tendency of bringing all senses with them during the shopping exercise, which experience activation to the generation of the overall perception of experience and the service provider (Helkkula, Kelleher, & Pihlström, 2012). One of the aspects of customer experience is the store environment. In this aspect, it is the obligation of the organisation to design the store environment in a manner, which enables satisfaction of the needs of the target market, attain sustainable competitive advantage, and illustrate the image of the store. Target should consider utilisation of a store design approach, which enhances flexibility, positive influence of consumption, and convenience during the shopping exercise (Caru & Cova, 2014). From this perspective, it is ideal for the organisation to consider utilisation of the grid layout design in the course of creating a positive store environment. The strategy associates with easy location of the merchandise while enhancing cost efficiency, thus enabling exhibition of more merchandise within the store. Another essential element of customer experience is the usage of effective customer experience performance. From this perspective, Target should consider utilisation of the standardised service rather than the personalised service while offering quality and effective customer service in accordance with the demands and expectations of the consumers. The approach is effective through incorporation of consistent rules and procedures for the generation of high standard services. Similarly, the approach is cost effective and efficient, thus enhancing the image and reputation of the organisation in the market and industry of interest. The standardised approach should concentrate on adhering to the five characteristics of consumers: reliability, tangibility, empathy, responsive, and assurance. References Brynjolfsson, E., Hu, Y. J., & Rahman, M. S. (2013). Competing in the age of omnichannel retailing. mIt sloan management Review, 54(4), 23-29. Rigby, D. (2011). The future of shopping. Harvard Business Review, 89(12), 65-76. Frazer, M., & Stiehler, B. E. (2014, January). Omnichannel retailing: The merging of the online and offline environment. In Proceedings of the Global Conference on Business and Finance (Vol. 9, No. 1, pp. 655-657). Chernev, A. (2003). Product assortment and individual decision processes. Journal of Personality and Social Psychology, 85(1), 151. Helkkula, A., Kelleher, C., & Pihlström, M. (2012). Characterizing value as an experience: implications for service researchers and managers. Journal of Service Research, 1094670511426897. Carù, A., & Cova, B. (2014). The Design of Consumer Experiences: Managerial Approaches for Service Companies. In Managing Consumer Services (pp. 91-108). Springer International Publishing. Gammoh, B. S., Koh, A. C., & Okoroafo, S. C. (2015, January). Global Vs. Local Brand Positioning Strategies: the Moderating Effect Of Belief in Global Citizenship. In Proceedings of the 2010 Academy of Marketing Science (AMS) Annual Conference (pp. 314-314). Springer International Publishing. Melnyk, V., van der Lans, R., & van Everdingen, Y. (2012). Effectiveness of Different Brand Positioning Strategies Across the World. In Marketing Science Conference. Grewal, D., Roggeveen, A. L., Compeau, L. D., & Levy, M. (2012). Retail value-based pricing strategies: New times, new technologies, new consumers. Journal of Retailing, 88(1), 1-6. Steenhuis, I. H., Waterlander, W. E., & de Mul, A. (2011). Consumer food choices: the role of price and pricing strategies. Public health nutrition, 14(12), 2220-2226. Read More