Many traditional retailers and their customers just don’t “get each other” anymore!
A gap has appeared between the priorities of each, the desires, the realistic possibilities of buying & selling – a conflict of interest.
The distance that divides the two camps is best seen when we look at the issue of space and more precisely space availability.
On the one side we have retailers who are overladen with space. They have built huge store portfolios in times when the size of a retail empire was everything in reaching out to the pockets of customers. From buying up large swathes of the countryside we now have retailers looking to offload space, moth-ball space, share space and renegotiate the price of space in a bid to rationalise their costs against their shrinking physical sales.
The obvious place to lay the blame for the necessity to rationalise retail space is at the feet of online retail, now edging towards 25 percent in the UK.
However, the real and fundamental problem is about consumerism and not consumer channels.
We have lived through an era of rampant consumerism where possessions have become the “empire of the ordinary man & woman.” We have filled our personal spaces with products transferred from retail spaces.
However, our spaces are full. We live in smaller spaces, shared spaces, rented spaces where the need, cost or rationale for possessions in becoming minimalised. Beyond that the consumer is concluding that they have, finally, enough “stuff” whatever the size of their space.
The desire is to experience life and to spend our money on those experiences, storing for perpetuity our consumable purchases on smart phones.
Our possessions are briefly held, transient but memorable.
Our possessions are no longer physical, easily forgotten, existing in the additional space we need to buy.
The cycle of failing retail space being converted into space we buy for goods we cannot house is coming to the only logical conclusion there is. We will eventually buy less “stuff!”
And so, the retail pipeline that has transferred product through its ever-growing width and length from supplier to warehouse, from store to customer home, will no longer flow freely into an endless sea of consumerism. It will be squeezed by the constrictive mind-sets of our customers and the turning tap of competitive spending possibilities.
The alternative flow from e-commerce into our homes is of course reducing the need for such a broad physical conduit. However, this should not hide the fact that the current volume of goods flowing through the supply system is at best unprofitable and ultimately unsustainable.
The opportunity, through this rationalisation of commodities, is considerable for the brands and retailers of added-value products. In contrast, the sellers of anonymous volumes will follow a drying river-bed to a destination that will no longer exist.
As retailers we need to align ourselves to our customers. We need to rationalise our volumes and refresh our value.
Together we must enrich our product propositions or risk the slow dilution of our worth to the customer, drowning ourselves in the insipid waters of irrelevance.