How to survive in retail
In an increasingly hostile retail environment, says former Game CEO Ian Shepherd, there are lessons to be learned from successful retailers and from those who have struggled.
There is no disputing that retailers are operating in a very different and much more challenging world now than they were even a decade ago.
While it’s easy just to say “do more online selling” or “refurbish your stores”, the harsher realities of competing with the online giants bring a number of commercial concerns to contend with.
One of those harsh realities is price competition. I know one retailer who tells the story of accidentally pricing a product on their website at £1 instead of £10, only to find a giant online competitor selling the product for 80p a day later.
While online competitors are using automated algorithms to undercut every price point for every product, retailers are held to account for gross margin and profit delivery. So brutal is the resulting price competition that more than one specialist retailer has experienced their online rivals selling at prices so low they are below the wholesale rate at which the retailer can buy the product themselves.
This is an extract from the Business & Management Magazine, Issue 277, September 2019.
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