Selective Consumption and the Retail sector
The Retail sector in Australia is slowing coming to grips with the fact that for the past 50 years, they’ve had a captured market and enormous profit margins. and that now, the times have changed. Whilst many point to the internet as a cause of their woes, others are pointing out the apparent high cost of labour as a major concern. Both of those issues are more or less out of the control of the sector and I would argue have only some influence of the retail sector. Yet what fascinates me is how few retailers (of all sizes) seem to be aware of the fundamental shift in the buying behaviours of consumers, and the implications for the retail sector:
Selective consumption is a relatively new term that depicts a more discerning consumer less able to be swayed by big seasonal sales or large discount offerings. The Big Retailers in Australia seem to have ignored the shift in consume mindset. This is IS where te internet has played a shaping role. When there is always a sale on somewhere in the world, the perceived value of a ‘big sale’ period drops dramatically. Yet many retailers still rely on this model of ever diminishing value.
Nowadays, ‘Big Sales’ work for exclusive customer sets – those clientele that have been nurtured and developed over time with limited run or high end offerings. The Big Box stores just feed into the core asset of Internet purchases when doing their big sales. The urgency factor when an offer is on for everyone no longer cuts it.
Selective consumption also means a better informed consumer. This is where the internet is an asset, not a competitor, yet once again we hear retailers complaining that shoppers don’t buy like they used to – in other words, they’re no longer the captive audience able to be fleeced with exhorbitant mark ups. But the true challenge for retailers now is that they fail to match what te internet offers by way of information, on the shop floor. Poorly trained staff (when you can find staff) offer no value to either the customer or the business. The consumer, looking for assistance and a reason to buy gets neither. A lack of knowledge of shop floor staff exacerbates the sense of lack of service and consumers are saying ‘well if I get no service in the store, I might as well have no service on line and at least buy at a lower cost’. The cost of labour isn’t a problem – it’s the cost of poorly trained staff that is a HUGE problem
Finally the internet allows customer to price shop. This is also a potential asset for retailers who instead, complain about needing to ‘match’ prices. The answer is so simple it’s gobsmacking that few retailers are doing something about it – bundling products. This makes price pointing more of a challenge, allows flexibility in margin spreads and attracts shoppers who want a more complete solution to their needs.
Oh and one last thought – the two biggest challenges for the retail sector are not high cost of labour and the internet. It’s an unwillingness to evolve the business model and high cost of floor space – rents, not labour is what kills a business. Poor labour (untrained) just exacerbates that problem, and the Internet exposes the high cost of shops, for what they are – white elephants
The Advanced one day Strategic Planning Workshop in Sydney on the 11th of December at Rydges World Square is now fully booked For inquiries about the next series of dates for the 2009 series, keep an eye out on The Australian Strategic Planning Institute website at www.taspi.com.au or contact us via email here
Read More >Every now and again what sounds like a really good idea turns out to be less beneficial than what was hoped for. There’s lots of talk right now about technology solutions and ways in which societies can change the way they use water – there’s conferences and ‘talkfests’ a plenty featuring many of the industry…
Read More >The second annual fund raiser was held in late October and attended by almost 300 people. Marcus Barber offers a brief update: The Blackwood 8 commitee put together a great fund raiser on behalf of the Ludwig Institute for Cancer Research in Melbourne. With a delightful crowd warm up by Greg Champion of the ‘Coodabeen…
Read More >The slides used as part of Marcus Barber’s key note address to the Regional Produce Summit are now available via the link below Held at the Wangaratta Gateway Motel (and the first conference event staged in its very impressively redsigned function room) the conference brought together a range of speakers to discuss culinary tourism,…
Read More >Strategic Futurist Marcus Barber will be kicking off proceedings at the 2008 Regional Produce Summit in Wangaratta on the 20th of October where he’ll detail some of the emerging issues likely to impact upon the tourism and food sector in the foreseeable future and suggest ways that businesses in the sector might be able to…
Read More >Strategic Futurist Marcus Barber will both key note and act as Master of Ceremonies at the Lockhart Industrial symposium on the 9th of October, in Lockhart NSW. Marcus will discuss the clear business advantages that Eco Industrial parks provide to businesses, the way that symbiotic supply chains work to improve business resilience and the way…
Read More >Marcus Barber joined host Tim Cox and co-host, author and writer Andrew Peglar on the Conversation hour to muse about the types of futures one might expect to see in coming years. After Tim asked for clarification between a General, Theoretical and Strategic Futurist, Andrew kicked off with a question over the singularity. The…
Read More >Members of the Futures Foundation and the AFFA will be congregating in Pearl Beach in the coming weeks to consider the state of play in the Australian Futures community. Given the emerging challenges in Australia and around the world, the futures community requires just as much serious contemplation and forethought as does any one …
Read More >One of our many Nordic watchers, Are Thorsteinsson, has posted the Future Matters segment looking at the future of robotics, along with marking up full language captions in Danish. Although a couple of years old now, the early signs listed in this segment are only now coming into more mainstream focus Strategic Futurist Marcus Barber…
Read More >Strategic Futurist Marcus Barber has contributed a chapter to Volume Five of the ‘Death and Anti-Death’ Anthology which has just been published by Ria University. With contributors including Aubrey de Grey and Kevin Kelly and edited by Dr. Charles Tandy, Volume Five in the series is dedicated to the memory of Loren Eiseley, the renowned…
Read More >