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Growth and revenue for retail

Through our understanding of the industry we believe we help you determine strategies and tactics that can help position retailers to survive, and even thrive, during an economic storm. The below challenges will stimulate companies in quest for further growth and protect their revenue.

How can Deloitte help you navigate

1. Think of your customer: Ensure customer retention

The financial crisis severely harmed customer trust and loyalty. Retailers are struggling with customer loyalty. Most players rethink their marketing and re-invigorate their proposition, both in product terms as in distribution. The changing behavior and expectations of consumers today and the difficult times we go through demands constant monitoring, measuring and managing through a highly effective Customer Relationship Management strategy.

It is essential in this context that your product and service offerings will become unaligned with demand. Deloitte offers some suggestions to implement:

  • Evaluate your product mix and pricing strategies in the context of changes in consumer demand.
  • Identify which of your product and category offerings are countercyclical and might grow during the recessionary period.
  • Pay particular attention to entering into new or enhancing existing private label offerings to capitalize on consumers’ increased attention to value.
2. Pricing and profitability management 

At the onset of an economic downturn, a company’s traditional reaction is to focus on controlling costs, retaining their largest customers, and hoping to ride out the storm.

At best, this is half a strategy. Companies that focus on revenue, pricing and overall profitability can survive and even thrive during a recession, but only if they go about it in an effective way. A foundational understanding of the business and visibility into transaction level margin performance are required to make the right decisions.

Deloitte can help building sustainable cross-functional capabilities to effectively set and capture prices. Elements of pricing for value include: developing the optimal pricing strategy, executing effectively the pricing policies, measuring and controlling at the transactional level and aligning technology.

3. Find your profit contribution winners and losers

Every business has both contributing and non-contributing components, and over time the business accepts certain practices and assumptions that should be challenged. Non-contributing components can often be restructured, reengineered, renegotiated, or re-priced to become contributors. Some suggestions:

  • Identify different business cross-sections for looking at profitability, such as products, product categories, vendors, and locations.
  • Challenge accepted logic for supporting non-performing elements in the business model
  • Make the challenging decisions and rationalize negative contribution components if they can’t be rehabilitated.

Please contact Koen De Staercke for more information