The might of the major retailers in virtually all market sectors has seemed unassailable for many years, with the larger groups swallowing up most smaller national and regional operators over the past few decades. Wholly owned and managed national distribution networks have maintained and enhanced their national presence and power.
This is borne out in sectors such as food, electronics, pharmacy, home ‘n’ garden, fashion and drug stores across the land. This list is not exhaustive but does show a fair cross-section of where major retailers dominate.
This model seemed destined to forever rule our high streets and out-of-town retail parks and malls – until the full power of the internet started the retail digital revolution.
Imagine the increasing panic in board rooms across the land as retail store closures soar in line with internet sales across virtually every product sector, along with emptying high streets and increased pressures on retail park customer flows.
There is a valid view now that the manufacturer, long the whipping boy of the mighty retailers, has now been empowered by digital technology to take the lead in determining how and where their products will be sold, and also to some degree at what price.
‘But surely we need shops?’ I hear you cry. Well yes we do, but not as much as we did 10 years ago and probably more now than we will in 10 years time. Food retailers have shown us the popularity of online shopping linked with home delivery, which in practice could all be run from a warehouse by anyone with the finance and a certain level of experience. The cost of maintaining a superb website presence is far, far less than the maintenance and operation of a prime site retail superstore group. The future has to be a balance between consumers that want the shopping experience as part of their lifestyle and consumers that want to use online purchase to easily obtain what they know they need.
There will always be the need for consumers to be able to physically interact with certain types of purchase but even many of these may be ‘sold’ in a different way in the future.
As an example let us examine the scenario in the electronics retail sector. Many people now visit superstores to get an idea of what an item looks like and what it can deliver before then searching on-line for the best deal. Once you have decided, for example, which television you want to buy, it will be the same wherever you buy it from.
Advantageous online pricing is driving an increasing number of consumers away from in-store purchase. Perhaps a chain of high-tech display stores, using techniques such as holograms and augmented reality, built regionally on an IKEA model but without the need to stock product and close sales could be the future. This would enable consumers to sample and view and allow the flexibility to order online in store or at their leisure upon returning home.
23 May 2012
Red Ant Solutions
The Malt House
Tel: 01483 863338
Fax: 0870 608 9370
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