The "rules of the game" in retail are continually changing. Shifts in the economy, changes in consumer tastes, emerging technologies and new business models can rapidly redefine winners and losers. The ability of current players such as category killers, discounters, luxury houses, etc. to anticipate these shifts is critical to their survival and prosperity.

Despite changing rules and rapid industry shifts, we have observed that most retail concepts go through three distinct phases of growth.

• Penetration – The initial expansion phase is marked by an innovative retail concept that grows through more stores, in more geographic markets, with one common retail format while displacing smaller, ineffectual competitors. Growth is asset-driven fueled by comp growth and new store growth
• Confrontation – This phase is characterized by slowing growth as all attractive trade areas are saturated and only a few strong survivors with similar offerings battle for share. Growth is customer-driven and the focus shifts towards more complex, tailored offerings
• Decline/Reinvention – The process of "Retail Renewal" is on-going as new players enter, redefine the market and begin the Penetration phase anew. Continued success is driven by information and investment in new ideas that may risk cannibalizing the core

Leading retailers typically develop an infrastructure, a set of business processes and a culture that is geared toward winning a particular phase, but struggle as the business transitions from one phase to the next.

Our Capabilities

Alliance has significant experience in helping companies to win in all three phases of the retail growth cycle by developing successful action plans for tasks such as:

• Market arena strategies
• Alternative retail formats
• Customer segmentation schemes
• Product category expansion plans
• Entry strategies for new geographies and/or businesses
• Strategic realignment processes
• Understanding and buy-in from the organization

Case Study

• The leading office superstore retailer focuses on market arena leadership to win the confrontation phase
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