It is evident all around us that retail as we knew it six to ten years ago is changing. The change is insidious but unrelenting and it will affect the way we do business for ever. That means that, as always, there will be winners and there will be losers. Those that adapt and embrace the change will probably survive and flourish whereas those that are stuck to their business model and are not willing or wanting to adapt will probably die.
So what are the changes and how will they affect the independent retailer:
1. Internet – Probably the single most transformational element in our lives has been the internet. This is not going away nor is it only going to be a passing phase. This is a crescendo tidal wave and we are living akin to the shore line of a tsunami. It affects every aspect that we do as retailers: buying & selling and everything in between. One must embrace this new channel and work with it rather than ignore it or work against it.
2. Splintering of Retail – There seems to be a fragmentation of retail and there is a splitting of ways amongst small retailers and the larger ones. Not only is this fragmentation going on but now there is whole new industries emerging with mobile ‘shops’: retail shows, one man bands, market stalls etc, etc. They sap buying power from customers and they divert attention from the High Street.
3. Raison d’Etre – Nowadays retailers need to have a solid and viable raison d’etre. No longer is it feasible just ‘setting up a shop’. That shop needs to be a distinctive point of difference and there needs to be a skill or service which set it apart from all other shops. That service will be the driver for generating footfall.
There are more reasons why setting a business should be a careful consideration but by no means something that should fill us with terror. As we grab these opportunities we should let the water ebb and flow to the trends in the market place.
I remember some seven years ago conducting a questionnaire on behalf of Marjo and one of the questions was “In the next year do you intend to increase the number of silver suppliers”. In the majority of cases (over 50%) the answer was “Yes”. Also, the number of silver suppliers supplying retailers was already over 5. Well, how seven years have changed the market. The same question asked now would be under 3 suppliers and there are certainly no plans for increasing the number of suppliers. The world has changed.
Now that the world is a different place, what would be the criteria that people choose their suppliers on, particularly new ones. From a silver jewellery supplier’s perspective there should be three criteria:
1. Jewellery range and price. There is no doubt that under difficult market conditions value for money is the name of the game. No matter who you are as a supplier, the customer is very aware and keen to look for the best price. A good supplier therefore offers value for money to its customers and also a range of jewellery that is sufficiently broad to cover all the retailers’ needs.
2. Trust & Service. This is such a tired and misconceived word. Everybody seems keen on saying that they provide a good service and then when it comes to the reality of things, there is a massive disappointment. Service means people will go the extra mile to ensure they satisfy your needs. Whether it is getting an urgent order out that same day or looking for that piece of jewellery which is already eliminated, but one might be lying about. Service is a quiet and very important criterion.
3. Congeniality. Life is simply too short to do business with people you don’t enjoy doing business with. There are too many options about and the power is all with the customer, as we live in a demand based economy. One does not have to suffer on and contend with unpleasant people: even if they’ve got desirable goods. Nowadays all goods are replaceable and there are options available on each front. Therefore don’t suffer on and choose wisely.
There is no doubt that those businesses which are deemed successful and are small have not been created by accident. There are many types of business ranging from retail to printing and wholesale but all of them have a common link if they are successful: they have behind them someone driving and pushing and betting on them. So what are the elements that lead to success?
First of all the business needs to have a concept that is sustainable. There is nothing new under the sun, but if a business is to succeed it need to be differentiated from its competitors or have a lot of money to support it. The idea can almost be anything but it needs to be different and exclusive to the business.
It can be a specific way of providing service, or a specific range of products or unique cost base. Whatever it is, it’s got to be exclusive and it can’t be replicated easily, but above all the owner needs to be aware of it and make it better.
The person or people who run it need to be passionate about it. This emotion and feeling cannot be transient and superficial. It needs to be wholehearted. Sometimes things will not go according to plan (sod’s law) no matter what one does to influence the outcome. It is in those occasions that the passion will come through and carry the whole thing forward. Passion is a funny thing but, in the context of a business, it is the overwhelming feeling that whatever is thrown at the business it will go forward and will be successful.
As someone who has made the transition from corporate life to small business, it is an overwhelming truth that hard work is involved. The business does not ask for your hard work, not does anybody ask for your hard work. But it is a surreptitious thing that the long hours creep in.
One can deceive oneself that because “you are your own boss” you will be able to keep your own time: well you won’t. Your time is the business, and that is where a way of life comes in. You have got to be passionate to invest so much of your time into it.
I have written on this subject before and do so again now as it has become even more important. The issue on hand is retailer versus product brands. Time and again I get so disillusioned by the careless way that retailers deal with their brand name.
People who have been in situ building a reputation for decades and it’s as if they do not appreciate the value of their brands for the local population. They would rather advertise the brands from certain products than their own brand, in the mistaken belief that they are more powerful. It’s as if Tesco would mainly advertise the product range they stock rather than their own brand…..never!
How do you build a local brand? There is a load of material written on this subject and, for sure, it is not by just sitting behind the counter waiting for customers to come in. It does involve spending money and doing activities which attract the local population and which are relevant to your business.
In the mean time we should say that Marjo is just for those retailers that prefer to use their own carefully nurtured brand and keep the jewellery products they sell under their umbrella. We will not ask you to merchandise in certain way or use our displays or packaging only to turn around and compete with you tomorrow……
As we run our shops day to day, the issue of stock is ever important. Even though as a wholesale silver jewellery supplier our products run into the thousands, we can hardly expect our customers to have all the models in stock. The question of what is the right level of stock becomes key. Also, silver jewellery by definition tarnishes and that is another factor why the right level of stock should be considered.
As a rule of thumb we advise our customers that stock should be proportional to the size of business and should take into consideration how often they order. If they contact us every two months and their annual turnover is say £1000, there is no reason why stock should be bigger than £166. Of course the seasonal variation should be taken into account and at a high seasonal period it should be perhaps twice as high but not much more.
The right level of stock will let you see what products are selling and have sufficient variety to keep the collection always fresh. The problem comes when this time you buy from this supplier and next time from another and then another. Continuity suffers and by default stock levels do too.
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