Retail Store Life Cycle
- Introduction Stage. As the name implies, the introduction is the beginning stage of any business, characterized by innovation and industry expansion.
- Growth Phase. Once your store catches on, it enters the growth phase. ...
- Maturity Phase. ...
- Decline. ...
Full Answer
What is the retail life cycle and why is it important?
This is because retail organizations pass through identifiable stages of innovation, development, maturity and decline. This is what is commonly termed as the retail life cycle. Attributes and strategies change as institutions mature.
What are the four stages of the retail cycle?
Retail Life Cycle. A theory of retail competition that states that retailing institutions, like the products they distribute, pass through an identifiable cycle. This cycle can be partitioned into four distinct stages: (1) innovation, (2) accelerated development, (3) maturity, and (4) decline. Rate this term.
Who introduced the theory of retail life cycle?
The theory of retail life cycle is first introduced by William Davidson W. R, Betas A. D and Bass S. J in 1976.
How do retailers deal with the buyer’s life cycle?
In particular, to explain the customer life cycle, retailers deal with the buyer’s life cycle by targeting customers to convert them from leads into customers, with certain content and experiences.
What do you mean by retail life cycle?
A theory of retail competition that states that retailing institutions, like the products they distribute, pass through an identifiable cycle. This cycle can be partitioned into four distinct stages: (1) innovation, (2) accelerated development, (3) maturity, and (4) decline. +10 -18.
What stage of life cycle is the retail industry in?
The retail organization faces rapid increases in sales. As the organization moves to stage two of growth, which is the stage of development, a few competitors emerge. Since the company has been in the market for a while, it is now in a position to pre-empt the market by establishing a position of leadership.
Who created the retail life cycle?
Professor Malcolm P. McNairWe will now discuss the three cyclical theories of retail change: the Wheel of Retailing; the Retail Life Cycle; and the Retail Accordion. First proposed by Professor Malcolm P. McNair in 1958, the purpose of the Wheel of Retailing was to suggest a cyclical pattern for retail business development.
What is retail store process?
Operations includes many aspects, such as store design, display placement, customer service, money and credit handling, shoplifting prevention, premises maintenance, staff management, inventory optimization, and dealing with the entire supply chain that leads to having products in the store.
What are the 5 stages of industry life cycle?
An industry life cycle typically consists of five stages — startup, growth, shakeout, maturity, and decline. These stages can last for different amounts of time – some can be months, some can be years.
What is retail store format?
The retail format (also known as the retail formula) influences the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple marketplace, that is; a location where goods and services are exchanged.
What is importance of retailing?
Retailer increases the value of the product by creating a place, time, and utility in the distribution of goods. Retailers buy products in bulk and break them in small quantities and sell them in small packs. In this way, he creates form utilities.
What was the first retail store?
The Bon Marché in Paris, which began as a small shop in the early 19th century, is widely considered the first department store. John Wanamaker carried the concept to the United States in 1875 by purchasing a rail-freight depot in his native Philadelphia and populating it with a collection of specialty retailers.
What are the 5s of retail operations?
Building on previous studies on retail operations, Pal and Byrom (2003) further developed the 'five S's' (stock, space, staff, standards, and systems) of retail operations, which provides managers with a useful guiding framework that can be exploited in the retail operations process. ...
What is the meaning of retail store?
Definition of retail store : a place of business usually owned and operated by a retailer but sometimes owned and operated by a manufacturer or by someone other than a retailer in which merchandise is sold primarily to ultimate consumers.
What is retail store design?
Retail store design is a branch of marketing and considered part of the overall brand of the store. Retail store design and display factors into window displays, furnishings, lighting, flooring, music and store layout to create a brand or specific appeal.
Which of the retail life cycle that needs to maintain their market share?
Market Maturity As the product life cycle reaches this mature stage there are the beginnings of market saturation. Many consumers will now have bought the product and competitors will be established, meaning that branding, price and product differentiation becomes even more important to maintain a market share.
What happens in the maturity stage?
4. Maturity. The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies begin to reduce their prices so they can stay competitive amongst growing competition.
What is the growth phase of a store?
Growth Phase. Once your store catches on, it enters the growth phase. As you grow, your profits increase and customers rave about your brand. While this phase may feel like Christmas, business professor David Gerth warns that competitors begin to copy you at this point, diluting your brand and taking away some of your edge.
What is the maturity phase of a business?
Maturity Phase. Once you are fully established, you have a rhythm and you've gotten pretty good at keeping the store stocked so customers can count on you. In this stage, you also have a lot of competition and your store defines your industry instead of feeling new and different.
What is the introduction stage of a business?
As the name implies, the introduction is the beginning stage of any business, characterized by innovation and industry expansion. Entrepreneurs in this phase of development either introduce a new retail store model, for example a particular product mix combined with a new service, or a new direction for an existing store. Introductory stage stores should be prepared for low profits due to high development costs. Retail expert Bob Phibbs notes that business owners can often reenergize a failing business by returning the introductory stage with a new approach.
What is retail life cycle?
The retail life cycle theory holds that retail institutions experience the cycle of innovation, growth, maturity and decline, like goods and services that they sell, similar to that of the product life cycle. The market traits and strategies which are taken by retail institutions should differ in variable stages of retail life cycle. The theory of retail life cycle is first introduced by William Davidson W. R, Betas A. D and Bass S. J in 1976.
Who introduced the retail life cycle?
The theory of retail life cycle is first introduced by William Davidson W. R, Betas A. D and Bass S. J in 1976.
What happens to retail formats in decline?
In decline stage, the new formats have become the traditional ones and with the change of consumers' buying behavior and the appearance of newer formats, the market begins to shrink and traditional formats (original new formats) could not make any profit but may suffer great loss due to the decreasing sales. During this period, some companies decide to leave the market. As a result, the competition among the same retail formats is not serious but the competition of different formats will get increasingly intense.
What is the competition between new and original retail formats?
At the meanwhile, the competition between companies of new and original retail formats begin to turn out white-hot. With the rapid growth of reformed companies, customers of companies without innovation intend to choose products and services of innovative companies. Therefore, the unreformed retail institutions begin to take various actions to reduce the loss of customers. In fact, many companies which use original retail formats meet challenges of new formats with the positive attitude and apply some new methods in the existing formats. The competition of different retail formats is unique and increase the vitality in the market.
How does the profit margin decline in the new retail formats?
However, the profit margin begins to decline because the new retail formats could not make any company have edge on the others and companies have to decrease the price in order to defeat competitors. Therefore, how to decrease the cost is the main problem that each enterprise faces. In order to pursue the differential advantage in the period of competition, the enterprises compete to make the market more mature and stable. Characteristics of new formats have been gradually lost and new formats change to traditional formats. Thus it becomes an important opportunity for the emergency of another new format.
What is the innovation stage?
In the innovation stage, in which the reformation and development of business methods promote the emergence of new retail formats, the operating characteristics of new formats have not been understood by both consumers and the industry, lowering market share. Moreover, because of the development cost of new formats, it is hard for retail companies, which apply the new methods, to make profit at this stage.
What is the competition of different retail formats?
The competition of different retail formats is unique and increase the vitality in the market. Later in the stage, with the wide application of new formats, the competition of companies which accept new formats will emerge and augment. The competition of different retail formats does not take the main role in the market.
Marketing dictionary
A theory of retail competition that states that retailing institutions, like the products they distribute, pass through an identifiable cycle. This cycle can be partitioned into four distinct stages: (1) innovation, (2) accelerated development, (3) maturity, and (4) decline.
Retail Life Cycle
A theory of retail competition that states that retailing institutions, like the products they distribute, pass through an identifiable cycle. This cycle can be partitioned into four distinct stages: (1) innovation, (2) accelerated development, (3) maturity, and (4) decline.
What is the product life cycle?
The concept of product life cycle is also applicable to retail organizations. This is because retail organizations pass through identifiable stages of innovation, development, maturity and decline. This is what is commonly termed as the retail life cycle.
What is the stage of development in retail?
The retail organization faces rapid increases in sales. As the organization moves to stage two of growth, which is the stage of development, a few competitors emerge. Since the company has been in the market for a while, it is now in a position to pre-empt the market by establishing a position of leadership. Since growth is imperative, the investment level is also high, as is the profitability. Investment is largely in systems and processes. This stage can last from five to eight years. However, towards the end of this phase, cost pressures tend to appear.
What are some examples of private retailers in India?
In the private sector, till a few years ago, most cities in India had a few independent retailers. For example, Mumbai had stores like Akbarally’s., Premsons, Amarsons and Benzer. Then Shopper’s Stop opened its first outlet in Mumbai in 1991.The store initially offered apparel, imitation jewelry cosmetics and perfumes and home fashions. It also had a customer loyalty program in place, which many stores at that time did not offer.
Is retail business in India organized?
The retail business in India has only recently seen the emergence of organized, corporate activity. Traditionally, most of the retail business in India has been small owner managed business. It is difficult to put down a retail organization, which has passed through all the four stages of the retail life cycle.
How do retailers deal with the buyer's life cycle?
In particular, to explain the customer life cycle, retailers deal with the buyer’s life cycle by targeting customers to convert them from leads into customers, with certain content and experiences. And from customers, they can be turned into repeat customers and even brand advocates rather than strengthen existing experiences, including the existing customer journey.
What are the stages of the Customer Life Cycle?
The customer life cycle stages that a customer passes through during the course of an existing relationship with a brand differ on a case-by-case basis, still, here are five primary customer life cycle phases:
What is customer life cycle marketing?
The customer life cycle marketing can help your business make the most of the revenue potential for each buyer who makes a purchase on your website. If a customer has turned into a brand advocate, as a result, the possibility for upselling will increase.
Why is customer retention important?
Customer retention is the final goal in growing strong brand loyalty, but your business needs to continuously offer proper and up-to-date messaging to former customers, or else your brand's top-of-mind recognition will soon fade away.
How does customer retention work?
Customer retention starts with satisfying a consumer's needs, keeping an eye on them, and cultivating the relationship. If you can take a customer's feedback and use it to improve a product or service, you make them feel as if they were a part of the process.
What is the best opportunity to progress consumers across the life cycle?
In addition, new product releases, new features, or exclusive offers are also an excellent opportunity to progress consumers across the life cycle. Provided that your messaging is relevant, consistent, and is in tune with customer needs, you can immediately turn one-time buyers into your loyal customers.
Is customer life cycle the same as customer journey?
There may be some overlap between the two terms: customer life cycle vs customer journey, but for all purposes, they should be treated as two distinct concepts.
