Monday, December 23, 2013

Smart Retail

Retail is a tough industry. There are low switching costs for customers (though firms try to mitigate this with things like loyalty programs), low barriers to entry, and fixed costs make up a large percentage of overall costs, which means even slight changes in revenue can have large effects on the bottom line. But for these very same reasons, it is also a very interesting/dynamic sector from the perspective of a retailer that is doing well and looking to grow its share.

Because of these factors, standing still as a retailer is a sure way to get beat up by the competition. Retailers must always be looking to improve their operations, and with that in mind there are a number of tactics that retailers can use to improve profits. Smart Retail is a book about a number of these techniques.

The first half of the book was rather useless in my opinion. It's about motivating yourself and your team, working in an area in which you're passionate, and other stuff that really applies to all of life and/or business, not just retail. But the second half made up for it, as it was much more focused on what I was looking for: retail tactics, what works and what doesn't.

To be honest though, I actually much preferred Paco Underhill's Why We Buy on this subject. Unlike this one, it didn't spend a lot of time on the intangible stuff, and did a better job convincing me that the results were gotten through controlled experiments. If you have to pick one, read that one instead. Of course, if you're in retail, you should read them both!


Anonymous said...

You have said nothing intelligible whatsoever in this post.

Sorry. Usually you have at least one useful thought in your posts. This one was a no-hitter.

The only retail worth investing in is non-showrooms for Amazon, e.g., specialty products with a service element like a Men's Wearhouse.

Anonymous said...

You might want try Store Wars, which talks about "basic laws" of retailing. It concentrates on the conflicts between retailers(likes of Walmart and Tesco) and consumer goods companies (likes of PG). The main theme is the competition between "customer mind space" which traditionally been home turf of the brand companies, and the shelf space which is home turf of the retailers. It talks how the relative powers and their strategies have evolved over time. I liked the book.

Anonymous said...

I enjoyed Paco Underhill's book as well, though I don't think it's held up as well in the age of the internet. I felt I learned more reading Sam Walton's Made in America. Great story of starting from nothing and the power of discount retail. I highly recommend.

Saj Karsan said...

Thanks, Anons 2 and 3. I'll check out Store Wars. I've already read Walton's book and quite liked it.