Archive for the ‘Advice’ Category


How the changing face of retail affects the independents

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.

The right amount of stock

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.

The Retailers’ Challenges

There is no doubt Retailers face significant challenges these days. Visiting many of them across the country one hears their concerns, which are certainly diverse. When one analyses how these Retailers encounter their challenges it seemsthere is a dividing line between two camps: those shops forging forward and those that are not. So, what makes the ones going forward successful?

 

  1. Location – Yes, this is one of the ‘oldies’ in retailing and it continues to be true. Location equates to footfall and those outlets in the ‘right’ location will live through a downturn whereas those in secondary or tertiary locations will sorely feel the lower footfall
  2. Added Services – Offering the right products at the right price is no longer good enough. If I got one penny for the times I have heard the phrase ‘we look for something that is different’ I’d be a millionaire. The fact is there is ‘nothing new under the sun’. Unless we talk about Technology, the Gift and Jewellery industries are saturated with products which cover every single angle of the market and rather than something new it should be a new way of marketing their current products. Many of the successful retailers have been offering a service related to the products they sell as a way of differentiating themselves, and they are banking on that.
  3. Product Cohesion – Ideally there should be a ‘theme’ running across the retail outlet and the products should ‘build’ on this theme. To make the point it is rare to see a successful independent retailer that sells jewellery alongside kitchen utensils. For customers it is much easier to focus on a shop if subliminally know what the shop sells. This also applies to price points. There is a misguided belief that one must have ‘something for everyone’. We have not seen much evidence this route leads to success.

There are a number of other ‘learnings’ which may prove of use and we will be publishing them in this Blog overtime……keep tuned in.

New to Marjo?

Access our catalogue now - it's easy!

Sign up for free »

Categories