It’s an extraordinary time to be a retailer. On the one hand, we’ve seen an incredible concentration of retail power occur here in the US and around the world as the largest retailers vacuum up retail sales. In many categories, e.g., drug, office supplies, electronics, home improvement, mass merchants, a few chains dominate the landscape.
And, yet, it’s never been a better time to be a small, independent retailer. Small operators have economical access to sources of supply from around the world like never before. They can market inexpensively to people in their neighborhoods or across their country through social media. They can make a bigger splash than they could ten years ago. And they can get closer to their customers than the Big Players.
Don’t get me wrong: It’s not easy. It’s never been easy to be a retailer. But small shops like Murray Hill Market in the Little Italy section of Cleveland and Bread Head Bakery in Dover are finding success. You can probably think of some successful retailers in your own neighborhood, too.
We even see some brands focused on selling through smaller dealers and mom-n-pop shops. Brands like Stihl and Sashco purposely eschew selling to mega-retailers like Home Depot and Walmart to focus their efforts through smaller shops.
Big still means economies-of-scale but those economies aren’t what they once were. Expect to see the share of some products shift from the mega-retailers back toward smaller, nimbler and more creative sellers. And effective merchandising will play a key role in every environment as retailers large and small seek to deliver value for their shoppers.
But what about online sales? Though impacting some categories more than others, overall, e-tailing still accounts for less than 10% of total US retail sales. Stores still matter – large and small – because shoppers say so.
Posted on 4/4/2014 at 8:00:00 PM