Wednesday, May 17, 2017

Is Bigger Better?

Every day I get an email feed from Inside Retail Australia. It contains short stories about what is happening in the world of retail. At least once a week there will be a story about one of the large retailers who has entered financial difficulty and the story will suggest that the writing is probably on the wall for them as a business.

Over the last Christmas season there were approx. 5 retailers that declared some stage of going, going or gone, Pumpkin Patch being one. There seemed to be a pattern that these were all stores that had undergone large expansions over the years. In their quest to grow and find more customers it seemed that they lost things along the way. 

As a new and small retailer- like many other small independent stores, I have learnt the power of personal individual service. As an owner working in the store I can tell you where my customers are coming from, I know if they are responding to promotions I’m advertising, I know their ages and the mix of demographics. This is because I’m speaking with them and asking questions to help me tailor my product mix. 

I love hearing stories about other individual retailers especially if they are in a similar industry to me. Reed Exhibitions have been running an interesting video series lately with their ambassador Tara Dennis visiting gift and homewares retailers and discussing their stores. These are always interesting and inspiring. I love looking at how they display their stock, hearing how they select it and about their customers and seeing what they’ve grown their businesses into with a few years of hard work. Very often the fact that they are a one-off store creates that destination factor. If it’s a good store, people don’t mind travelling- within reason. The journey becomes part of the hunter/ gatherer process. I have retail design clients who have happily travelled interstate to view other retailers whom they find inspiring and have elements that they wish to emulate into their own.

However, the flip side in the quest to grow and conquer is the risk of loss of personal service standards, decrease in product knowledge with the staff, workers for whom it’s “just a job”, stock flow management issues and increased overheads to name a few negatives. Very often businesses are gauged in monetary value, but take away key people or compromise your standards and ethics and suddenly a business can become worthless.

Success and achievement are common aspirations of human nature. For some the desire to grow bigger is well worth the work, for other businesses remaining as a one-off destination may be the solution. Next time you are dreaming with stars in your eyes, ask yourself “what could be lost in the quest to grow?”