Its a weird time in retail right now. Maplin is closing down, Homebase has been sold, Marks & Spencer are closing stores, and Tesco is shutting down Tesco Direct. What they all have in common is that they all try to be one-stop-shops for the section of the market they operate in. Maybe that’s a bad idea. Maybe it’s no longer what the customer wants. Maybe this kind of big retail operation has had it’s day.
Perhaps the poor economy, the driving force behind these changes to the retail landscape, will force the bigger players to relinquish their hold on each of their markets at the same time that new technologies and digital capabilities enable more smaller retailers to fill the gaps.
The state of the economy doesn’t make it any easier for smaller retailers, but if the idea of being a one-stop-shop, using a centralised operations model and a market-domination-by-being-the-biggest approach has lead to the downfall of the big retailers, then that’s a useful lesson for small retailers.
With growth in the number of stores and people comes increased complexity and the need for more people and more systems to manage that complexity, and with complexity comes cost. Maybe it’s better to accept ten per cent profits on a million pounds a year turnover than one per cent profit on a ten million pounds a year turnover.
Perhaps out of these weird times a multitude of small, more specialist, retailers will have the opportunity to take the place of the likes of Maplin, and rather than trying to be a one-stop-shop where you can get everything they will focus on more specific product ranges and more expert service.