Monday 15 June 2015

The 8 Variables making every retailer a Big 4 competitor, and every consumer ‘the Boss’

Time was when the ‘available alternatives’ in retail competition were the remaining Big 3 for any of the four major players in UK retail, and every other retailer worried about the Big 4….

Now it could be said that the consumer enjoys 100% access to any way they choose to buy, whenever they want…

This means that all retailers compete with one another, in a zero-sum game - total available demand - with international online generating worrying amounts of leakage at the edges….

In practice the variables - the bases for comparison – include:

Products & Assortment: ‘I need access to any size, shape or variant - someone will provide…’ 

Pricing: ‘I want to have this for whatever, whenever, however I choose to pay…’

Promotional activities: ‘I may need help in making my choice, but I believe nothing’

Place i.e. store location: ‘I need to be able to reach out and buy one, ideally via the nearest button…’

Personnel: the ‘people interface’ becoming a liability?

Physical distribution & handling: ‘I don’t want or need to know…’

Presentation of stores & products: ‘If I choose to visit, it had better be my version of good'

Productivity: ‘ If you cannot make money in competition with my 100% access, that’s your problem..’

Retailers no longer have any real choice, and it hurts..

This new ‘retail’ reality also raises a fundamental issue for brand suppliers: we cannot be everything, everywhere, what are the cut-off points within our current business model?

As brand suppliers, we have the advantage of a little warning re this fundamental change in consumer democratisation - the arrival of Sam Walton’s ‘consumer is boss’ realisation - via the retail turmoil occurring further down the supply chain..

Best we anticipate the changes required, before the consumer makes them on our behalf…

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