Retailers continue to struggle, supermarkets in turmoil – welcome to a new era of consumer power!
Picked up this story in a recent post on the Fortune website. It attempts to explain some of the reasons behind the poor financial performance of retailers big and small.
Has our love affair for shopping finally ended? Retail therapy appears to have waned to the point of fundamental decline with many of the world’s largest retailers reporting disappointing results. The latest batch of bad news coming from big box supermarkets here in the UK seems to suggest consumers are moving away from traditional dominant players in search of value and convenience.
The article cites possible reasons including declining store traffic, an uncertain economy, the impact of the internet and consumers insatiable appetite for promotions and discounts.
Price & convenience appear to be key drivers fuelled by the ever expanding reach of the internet and mobile devices.
The article talks about the key challenges facing retail with some potential solutions including,
Death by Discount – how discounting has become the norm and how difficult it is avoiding the race to the bottom.
The economy – how the trauma of the recession continues to play on the minds of consumers and puts price firmly in the forefront of their purchase decisions.
Retail evolution – how retail is changing driven by changing consumer behaviour.
Our take
Shoppers are still out there it’s just that they have more choice than ever and as a result retailers have to work much harder to win their business.
Today’s consumers are empowered with the technology to instantly access product and price information – chances are they know as much about your products as your staff do and probably more about where the best places to buy are.
The bad memories of the credit crunch and subsequent recession will linger long in the minds of many consumers with the result that many shoppers will continue to be price sensitive.
In an environment of delicate consumer confidence, retailers must either compete on price and convenience, or wow shoppers with such an innovative product or unique buying experience that they can’t resist spending their money.
Unfortunately for most of us that makes price and convenience the only viable option and if you are going down that route you have to do it systematically and efficiently.
Effective price management is a must in these tough times. Retailers need accurate and timely price intelligence in order to effectively respond to the challenges and opportunities of an era of retail where the consumer is very clearly in control.
