Business Unusual

Are retail shops only going to get smaller now?

Retailers would love to sell every item they carry at full profit from every shop they have. It is unlikely though because they can’t be sure if every shop will have the demand to do so.

There are two significant elements every retailer needs to manage regarding their inventory. How many items of each type to hold in each shop and how best to spread the total number of items among all the shops.

It is an old problem.

Catalogues

Solutions came as advances were made in the services around retail. Those options may not have been created specifically as solutions but allowed for it. They were the adjacent possible (as described by authors Stuart Kaufman and Stephen Johnson.

An early alternative was the catalogue. Post thousands to potential customers and arrange for delivery or collection of only the items that were ordered and paid for. It works well if printing is cheap and there is a trustworthy and reliable delivery system.

The catalogue was joined by the website allowing access for an ever greater number of people and a huge amount of products to be made available.

As online purchasing options have increased and willingness to use them improved the sale of digital items has soared, but the challenge remained with physical products. You may either want to see them first or you would need to arrange a time and a place to have them delivered.

The delivery option has seen the next wave of advance which may mark the tipping point for physical shop sizes.

Delivery options that deliver

Before Amazon there were stores like Argos in the UK that were distribution centres with a small ordering, payment and collection area. You either chose your product online or out of a catalogue in the store and paid, with someone fetching it from the warehouse for you while you waited. Amazon went further in delivering everything and doing so faster than ever before.

It still required you to be at a certain place at a certain time to receive the delivery which can still be a challenge, but some evolving options may make that even easier.

Simply collecting your item from a designated shop close to you is an option but retailers like Makro in SA have added the option for some smaller items to be delivered to a locker and send you the pin to collect it when you can.

Placing those lockers in parking lots of shopping centres is cheaper than keeping them in store and more convenient that requiring you to collect at distribution centre which are often placed far from retail and residential areas.

Amazon’s Treasure Truck goes one step further in creating an option for the impulse shopping and sale item equivalent by loading a truck with sale items that are bought online and taken to a point for collection by truck to people that were willing to go there to fetch it.

It would be a great option to copy, but it has been patented.

Smarter delivery options

Volvo has a service that directs deliveries to your car based on its location and provides for one time access to the boot to have the item left in your car.

Online sales in SA still only represent a fraction of the total sales, but as things improve and get cheaper for online purchasing and delivery you can expect retailers to want to shift towards it.

Not only to reduce costs, but for some businesses like Takealot it represents a new segment of the market who are more willing to buy online than in store.

It may sound like bad news for shopping centres but it need not be, if individual shops can be smaller you could accommodate a greater variety of shops.

The lower rental may make it affordable for small businesses to get access to the greater customer traffic.

Shoppers will have more choice, while mall owners will have more tenants to lower the impact of a store closing on their income.


This article first appeared on 702 : Are retail shops only going to get smaller now?


Recommended

by NEWSROOM AI

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
To buy or not to buy? That is the question

To buy or not to buy? That is the question

The pros and cons of subscribing to versus buying digital content.

It took a war to change shipping. What will it take to change transport?

It took a war to change shipping. What will it take to change transport?

As hype begins to grow around the Hyperloop, will it change how we travel or run out of track?

Scale may no longer be the best way to achieve growth

Scale may no longer be the best way to achieve growth

Grow or die is the law of the jungle, but does it still apply outside of the jungle?

Will 5G communications make access universal or create another digital divide?

Will 5G communications make access universal or create another digital divide?

The super fast new mobile internet may change the world, but it might not be for the better.

How to win elections and influence people

How to win elections and influence people

You could say elections are being disrupted.

Technology disrupted tax income, but nobody escapes taxes

Technology disrupted tax income, but nobody escapes taxes

Digital companies have had a good run, but new taxes are coming.

Popular articles
[WATCH] Teen shoved off bridge by pal into river

[WATCH] Teen shoved off bridge by pal into river

A Washington teenager was badly hurt when her friend pushed her off the bridge after she said she didn't want to jump.

I've always known what space I wanted to be in - Trevor Stuurman, visual artist

I've always known what space I wanted to be in - Trevor Stuurman, visual artist

#NightTalk host Gugu Mhlungu chats to entrepreneur & multimedia visual artist Trevor Stuurman about his accolades and inspiration

Africa State of Mind: ''They call me the real Makoya' - Femi Koya, musician

Africa State of Mind: ''They call me the real Makoya' - Femi Koya, musician

In this episode of Africa State of Mind, musician Femi Koya chats to Lee Kasumba about leaving Nigeria to come to South Africa.

I've always said that stories are the mothers of all disciplines - Gcina Mhlophe

I've always said that stories are the mothers of all disciplines - Gcina Mhlophe

Phemelo Motene chats to the mother of storytelling & a poet to the masses, Gcina Mhlophe about what it means to share your stories

This is how the Pebbles Project is protecting kids that live in the Winelands!

This is how the Pebbles Project is protecting kids that live in the Winelands!

Fundraising and Outreach Manager at the Pebbles Project, Charmaine Gola, chats about the work they do & their focus on the youth

The nutritional, environmental & socio-cultural benefits of indigenous foods

The nutritional, environmental & socio-cultural benefits of indigenous foods

'You need to look outside your traditional shopping centers to actually eat traditional food in the city' - Mpho Tshukudu, author

ProKid described as a true family man who loved his mom

ProKid described as a true family man who loved his mom

His brother Sandile Mkhize says he promised ProKid that he will continue where he left off.

'The Suzuki Dzire is the perfect day-to-day runaround car' - Jacob Moshokoa

'The Suzuki Dzire is the perfect day-to-day runaround car' - Jacob Moshokoa

In the car feature, automotive journalist Jacob Moshokoa chats about his experience driving around with the Suzuki Dzire.

[LISTEN] Codeine addiction and abuse

[LISTEN] Codeine addiction and abuse

Member of the SASOP, Dr Eugene Allers chats about the causes behind addiction to over the counter medication.

Phemelo responds after listener congratulates her for speaking wonderful English

Phemelo responds after listener congratulates her for speaking wonderful English

'To congratulate me, and to make it seem like this is an accolade is extremely offensive because of our history' - Phemelo Motene