Challenges of retailing today
Is the retail business in a downward spiral? I had a disappointing shopping experience last week. I have a narrow foot and I went to a shoe store and a large department store and had the same experience. Both told me they do not stock narrow or wide shoes anymore, only medium. They both said they could order something for me but I felt like I might as well go on line myself and peruse a bigger selection. I know their management made a realistic decision on stocking cost versus demand but I still left disappointed that I could not support local merchants and don't have new shoes. Small businesses are going out of business and large department store chains are closing stores; what is happening?
Sam Walton changed the wholesaling industry in 1962 when he opened his first Wal-Mart store in Rogers, Arkansas. His plan was to offer lower prices with greater service. He accomplished this plan by buying directly from the producers and selling directly to the consumers; thereby bypassing the markup of wholesalers and distributors. Are we seeing a similar revolution for the retailers?
It is easy to blame the internet for the retail change happening around us. The widespread use of home computers, tablets, and smart phones make it easier and more natural to buy over the web. It seems like time is more valuable today as there are many activities vying for our time, even in retirement. Shopping is not as popular for entertainment as it used to be. Friends do not seem to plan shopping excursions as they did years ago without a purpose other than to just have fun.
Okay, we all recognize the problem but what is the solution? It is not intuitively
In a previous article, I mentioned four elements to guide directions of businesses:
• That Which You Love
• That Which The World Needs
• That Which You Are Good At
• That Which You Can Get Paid For
Elements 1, 3, and 4 are easier to understand. If you don't love the business you are in you probably won't be very good at it. If you aren't very good at it, people will go elsewhere. And you have to get a fair return for your effort and investment or you cannot stay in business. That which the world needs is not so straightforward. It is necessary to research, study, experiment, and maybe even fail a few times to find a niche where there is an unmet need and you can dominate. It is my observation that any mature market niche has room for two businesses to prosper and one to "get By." More than that spells doom for the others. So how do we find our market niche in which we are one of the top two? Take a look at it from the view of the customers.
What motivates them to buy? Is it value, convenience, latest and best, quality, availability, helpful advice and guidance, see the product or try on before making a decision, friendliness and helpfulness of the sales people, integrity of the store, or location. What does it take to turn prospects into customers?
Finding this market niche is key to success. It will change and we need to continue to change with it. All we want is an unfair advantage in the market niche we serve and we can find it with effort and awareness. We can no longer be all things to all people as the shoe stores have found out, but we can be a delight to a narrow few.
Retailing is not doomed and it is not in a downward spiral, it is in a horizontal spiral.
The industry is changing and we need to change with it, or maybe even lead it.