“Principles are the missing middle layer in most organizations— one that tells people how to make decisions that advance the purpose, put values into practice, and move the organization toward its goals.” – Mark Bonchek.
Managing by principles in retail involves guiding decision-making based on core values and overarching principles rather than rigid rules or processes.
Retail managers should adopt a set of guiding principles to ensure that every decision and action is aligned with the company’s mission, values, and objectives.
The aim is to facilitate a culture based on clarity of purpose, employee autonomy, and aligning team efforts and actions to improve business outcomes.
Why Are Principles Important to Retail Businesses?
Principles act as a guide, translating the business’s mission, culture, and strategy into actionable decisions and results.
Unlike rigid processes, principles offer flexibility and facilitate organizational norms that allow employees to take ownership and make decisions over their work.
Which Principles Should Guide Retail Decision-Makers?
These five principles provide a template for retail managers:
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- A Customer-Centric Approach
- Paying Attention to Detail
- Understanding the Four Ps of Marketing (Product, Price, Place, Promotion)
- Exceeding Customer Expectations
- Creation of a Location Strategy
The Customer-Centric Principle
Importance: Retail managers rely on a customer-centricity to engage shoppers, drive sales and encourage repeat customer visits.
Customer-centricity is a principle that focuses on creating the best experience for the customer, and in doing so builds up the brand image and increases customer loyalty.
In addition, in retail, the customer-centric principle affirms that the customer is at the center of a business’s philosophy, operations, or ideas.
Application: Managers can use the customer-centric principle to prioritize customer satisfaction by training staff to actively listen to feedback, and anticipate customer needs.
For example, implementing loyalty programs and personalized marketing campaigns can also have the effect of enhancing the customer experience.
Benefits: A customer-centric approach ensures consumers receive personalized attention and are offered tailored solutions that will increase customer satisfaction and build credibility.
Consistently acting on this principle will result in higher customer retention rates, positive online reviews, and increased profit potential.
Pay Attention to Detail
Importance: Attention to detail is a crucial skill for retail marketing professionals, impacting the quality, accuracy, and merchandising campaigns.
Application: Retail managers can implement quality control measures, conduct regular audits, and provide ongoing training to staff on best practices.
Managers can instill a culture of excellence throughout the organization by emphasizing the importance of attention to detail.
Benefits: A seamless and consistent experience increases consumer trust and encourages positive reviews and word-of-mouth advertising.
Attention to detail translates to improved brand reputation, increased customer loyalty, and repeat business.
Understanding the Four Ps of Marketing
Importance: Understanding the Four Ps of Marketing (Product, Price, Place, and Promotion) is fundamental for developing effective marketing strategies and positioning products in the market.
Application: Retail managers can analyze market trends, conduct competitor research, and collaborate with marketing teams to develop comprehensive plans that address the Four Ps.
Benefits: Consumers benefit from targeted marketing efforts that resonate with individual needs and preferences, resulting in a more relevant and personalized shopping experience.
Exceeding Customer Expectations
Importance: Customer expectations are the standards and beliefs customers hold regarding a product, service, and the experience they anticipate.
Thus, exceeding customer expectations is directly associated with consumer confidence and trust.
Application: Retail managers can encourage the creation of a culture of exceptional service by rewarding employees for going above and beyond expectations, soliciting customer feedback, and continuously improving processes.
When a retailer consistently exceeds expectations, the result is more often than not, loyal customers who voluntarily advocate for the brand.
Benefits: Exceeding customer expectations leads to positive word-of-mouth referrals, repeat business and sustainable growth.
Location Strategy
Importance: Location strategy is a plan that includes determining company objectives and then finding the right location to work towards them.
Choosing the right location based on target demographics and market trends is essential for attracting customers and maximizing sales.
Application: Retail managers can conduct thorough market research, leverage demographic data, and monitor consumer behavior to inform decisions about store location, layout, and expansion plans.
Benefits: Consumers benefit from convenient access to retail outlets in strategic locations, resulting in a seamless shopping experience. For the retail outlet, a well-executed location strategy leads to increased foot traffic, higher sales volumes, and enhanced brand visibility.
“Principles are important because they provide clarity and directions, even if they don’t suggest specific actions. Sometimes, they allow us to understand what is more and less important. Having no principles will leave us vulnerable to being swayed by popular opinion.” – Salvatore Cordiano.
Conclusion
Principles are the missing cultural component in most retail businesses— one that tells employees how to make decisions that advance the company’s mission, and put values into practice.
The principles of putting customers first, paying close attention to every detail, mastering the four Ps of the marketing mix, going above and beyond customers expectations, and strategically selecting locations are all directly linked to sales, profits, and repeat business.
Moreover, instead of telling people what to do, retail managers should aim to lead by providing them with the clarity of purpose to decide on their own what to do and act in the best interest of the organization.
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