5Ps for successful retailing

Global competition in retail industry is no longer happening just outside India. Every retailer requires modernisation and innovation for sustaining the business. Primitive retailing may only fulfill housekeeping requirements. If a retailer owns a space that is open to shoppers and carries products to sell, then he can start trading. He may be smart enough to hang a signage addressing what he offers, clean up the shop area and visually merchandise. Over the last century, particularly in the latter part, competition in retail sector has become extremely keen. We witnessed many new players coming onto the market increasing the degree of competition. While some of the existing retailers survived, others failed to do so. Today’s business environment doesn’t allow retailers to continue trading the way they did or enjoyed yesterday.

Along with vision and mission statement, value proposition is required for developing fundamentals of retail business. Vision tells us where we want to go or what we want to achieve in the long-term. Mission tells us the purpose of our business. More importantly, it tells the significance or raison d’être (reason of existence) of the business. For example, vision could be ‘to be recognised as the leader in helping people enjoy modern and quality lifestyle.’ Vision is like a guiding star. It sits on the horizon and acts as an ‘inspirer’ to everyone in the retail organisation. It stretches the business out into the future. Mission sets out the route by or through which the vision will be achieved. It explains what people in the retail organisation have to do on a day-to-day basis. For example, it could be ‘offering unique lifestyle products and services at affordable price to urban working women with cost structure permitting attractive returns.’


Value proposition

Value proposition consists of major business processes viz. ‘choose the value’, ‘provide the value’ and ‘communicate the value’. ‘Choose the value’ is a result of understanding value desire from customers’ viewpoint and select-target customers, and then defining benefits for the selected customers. ‘Provide the value’ comprises (1) Place, (2) Products and (3) Price. From business concept viewpoint, it tells about how you offer quality-shopping environment accessible to target customers (Place), how you select merchandises collaborating elements such as coordination, timeless value and quality (Products), and how you price merchandises providing value added perception (Price). ‘Communicate the value’ via (4) Promotion and (5) People. It tells about how you develop effective campaign aiming at target customers and also how you offer friendly, courteous and efficient customer service. At the end, an intangible message - ‘Value is higher than the price.’ - shall be delivered. More specifically, 5Ps must fulfill the essence of successful retail business.


  • Locations, which are convenient to target customers
  • Shop layout providing comfortable routing and movement
  • Neat and tidy maintenance
  • Visual merchandising and display layout projecting right concept, whilst providing convenient selection process
  • Visual aids to create interests and excitement


  • Right product mix
  • Reliable in-stock and efficient replenishment


  • Right pricing ensuring marketing positioning and competitive edge
  • Hot / Basic / Medium / Fancy (HBMF) price structure


  • Prioritise objectives
  • Identify right media and/or tool for the product
  • Intelligent budget allocation


  • Select sales staff, whom target customers can relate to and project store image
  • Select back-end staff, who can relate to store concept
  • Ensure same positive and proactive attitude from top management to staff


Unique qualifications

5Ps value proposition is however not a magical tool to help you stand above the competition. It is a must-have tool for you to take right developmental process of retail business. It is crucial for retailers to have an ‘unfair competitive advantage’ in the market. Examples of unfair advantages could include a world-class management team, proprietary technology, proven operational systems, key partnership, long-term engagement with major customers as well as other successes-to-date.

A strong ‘unfair competitive advantage’ will yield long-term barriers to entry. Methods through which a retailer will retain customers should be considered. Such methods could include implementing customer relationship management (CRM) tools, building network externalities (e.g. the more people use the product or service, the harder it is for competitor to penetrate the market) and on-going value-added services.

Acquiring such unique qualifications would often require transformation of the business culture. More often than not, the business culture is ‘anti-customer.’ ‘Customers’ are defined as ‘they’ at retail shop floor, ‘targets’ at marketing department office, and ‘consumer’ at boardroom.

‘Consumers’ buy products whilst ‘people’ live. Old-fashioned marketing recognises the ‘consumers’ as ‘buying machines’ whilst branding recognises and treats the consumer as ‘active-living person’, who wants respect, individuality, distress, connection and relationship.

Stakeholders consist of shareholder, employee, business partner, vendor and customer. However, customer is the only party bringing the business revenue income. If so, why should not we put ‘customer’ at the centre?

Acquiring unique qualifications would often require transformation of the business culture.

  • Transform bureaucratic organisation to customer-centric task force.
  • Transform price competition based retailing to what provides holistic customer experience.
  • Transform the one that offers marketing gimmicks to what provides opportunity of emotional engagement with customer.
  • Transform ‘Just do it’ to ‘Think different’ culture.
  • Transform from ‘Entrepreneur’ business to happy marriage of ‘Entrepreneur + Professional’.


‘Customer-centric’ retailing

Innovation doesn’t exclusively mean new invention of products or business model. It does mean that we switch our mindset and reposition ourselves in terms of addressing old-fashioned marketing dilemmas. The road most traveled is often the easier route that everyone takes. Few of us venture through the road less traveled for it is more challenging and sometimes, even more intimidating. This is what Robert Frost observed. Today’s change in lifestyle is causing a major paradigm shift in retail business. The world is shifting from a mass ‘consumer-oriented’ market to an increasingly individual oriented or niche-market. Welcome to a new era of innovative ‘customer-centric’ retailing.

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