Article by James Mc Gregor at Retail-Remedy
Many articles have been written discrediting value retailers and the dominance they have within the market place, however, the simple fact is, love them or hate them customers are turning to them to deliver a better return on the money in their wallets. Is it therefore imperative to understand how they achieve such a dominate position within the market, and what are the lessons retailers can take when reviewing their business models?My view, having worked with value retailers for +20 years is that they are not driven by costs; instead they drive a culture of excellence, quality and continual improvement. Cost elimination then becomes a derivative of this focus. Value retailers never stand still long enough to accept complacency or their market position. Whilst many companies are now working on tactical strategies to reduce costs, the very best value retailers see this as part of their business model, irrespective of the current trading conditions and economic/global climate. Hence as trading becomes increasingly more difficult they have the ability to focus on existing and new customers rather than fighting the fire that has begun to consume most retailers engine rooms. Whilst exec. teams of many retailers are in the war room discussing the best way to baton down the hatches, and determining how the business will operate with a 20% resource reduction, value retailers are able to focus on how to attract a greater customer base, as they have always operated with a lean cost to operate model.In summary, the retailers that will come out of the recession strongest are those that review all that they do, respond quickly to the need for change, invest in their people, focus on quality and meeting the changing demands of customers, and do all they can to eliminate waste and provide value. For those retailers that have joined this shift towards delivering customer value, don’t through your strategy away through this difficult period, instead, embrace it, communicate it, and empower your teams to work faster to deliver it.
About the Author
James is currently a director at Retail-Remedy Ltd., a consultancy specialising in change management and profit improvement for the retail sector. http://www.retail-remedy.com
