Four types of growth opportunities that retailers may pursue are: market penetration, market expansion, retail format development, and diversification.
Market Penetration- A market penetration opportunity involves directing investments toward existing customers using the present retailing format. Approaches for increasing market penetration include attracting new customers by opening more stores in the target market or opening the stores for longer hours.
Cross-selling means that sales associates in one department attempt to sell complementary merchandise from other departments to their customers. More cross-selling increases sales from existing customers.
Market Expansion- A market expansion opportunity employs the existing retailing format in new market segments.
Retail Format Development- A retail format development opportunity involves offering customers a new retail format–a format involving a different retail mix–to the same target market.
Adjusting the type of merchandise or services offered typically involves a small investment, while providing an entirely different format, such as a store-based retailer going into electronic retailing, require a much larger and riskier investment.
Diversification- A diversification opportunity involves a new retail format directed toward a market segment that is not presently being served.