Retail is detail?
18th April Leave a comment
When I was working for classical retail companies back some years, I was indoctrinated with the slogan “Retail is detail”. It was there to remember everbody that all the small things made the difference with the competition, since the products are more or less the same. But how is that today in the shiny world of ecommerce?
If we take a look at the development of the internet and the uprising of ecommerce, loads of things changed for retailers. Back 20 years you needed property in a good location to sell your stuff. Today you get your virtual property in form of a server for a few bucks a month. So one thing retailers lost is the advantage of the property. Ok, there are the multi channels and brands which still have to focus on location, but for a lot of merchants it doesn’t matter any more.
Then you have the software that is enabeling people to sell their stuff online. At the beginning of this century you needed huge money to buy one of the few commercial software suites or the staff to build a solution yourself. That was quite a burden for smaller companies or market participants. Nowadays you get a ready to go rental shop for a few bucks a month. Or you can even use open source systems and customize them yourself. So the second thing the retailers lost is the advantage of throwing huge money at this kind of problems. Ok, theses systems are not perfect as our very own Alex pointed out recently.
I think it’s scary how some of the big companies run their online business. How they structure their catalogue, how the user experience is designed. And if you think of the possibilities they have with their money in the bank it’s even more scary. And how much detail they lost on their way.
So what’s the implication? Even if a lot of prophets tell us over and over again that amazon or google will eat all of the small ones, I guess “retail is detail“ is absolutely not dead, but applies more to the smaller merchants today. I’m not even sure if todays online world does support the retail is detail mentality with the big ones. In the good old offline days you had simple hierarchical structures that supported this approach. But today? I a lot of companies the online business is seen and treated as one of the physical ones (no joke, I know a retailer who has outlets and treats it’s online business like one of them, even if online nearly makes a billion per year…).
Smaller merchants have the chance to pick that up. They can impress their customers with product knowledge, product choice (it’s not always good to sell everything) and personality – the values that are long gone for the big ones. They can win in focusing at their customers and meet their needs 100%. The big ones try to do all for everybody. But if you go for that approach, you can’t focus on the individual. Ecommerce is in most cases there for the masses, but in some cases for the focused target groups. If you win a special needs group for your shop, they will not go amazon cause it’s 50 cents cheaper. They didn’t do it in the past. There is nearly always somebody who sells what you want cheaper than where you buy it. But why don’t you buy there? Because you trust someone and/or you are too lazy to search. If I take my example: for the general stuff I like amazon, but I double check the prices, because they are often not very good at amazon (you should try this too – it’s interesting). If it’s marketplace merchants I don’t like to buy, since I don’t know the merchant behind the offer and the process – especially if something goes wrong – is annoying. This is where I go for smaller expert shops.
The big chance today for every merchant to make better business is to focus on detail again. It’s not about spending huge money, but being smart and knowing your customers well. That were the basic blocks of successful businesses in the past. And in the future I think they still are.
picture by Mads Boedker