Shrinkage. It’s the antithesis of the mindset of the last 29 years, a period of continuous buoyancy and growth.
Contraction in numbers of outlets, product/service ranges, inventory levels and the size of premises first emerged and progressively developed during 2019. The onset of the COVID-19 and the pandemic simply accelerated, rather than caused, the trend. Retailers, Australia-based in particular, have been at the forefront. No-one in that sector it seems is immune. Long-established, recognised and preferred brand names are conspicuous among the down-sizing, including:
· Noni B Target
· Portmans Big W
· Rivers Myer
· Peter Alexander David Jones
The fate has also fallen on leading global brands in the dynamic fast fashion sector, including H&M, which has announced the pending closure of some 250 stores, which represents around 5% of the 5,000-outlet network.
THE BIG SQUEEZE
Senior executives and Board members have justified store closure decisions on “unreasonably high rentals” and leakages to online sales.
Both are strategic factors which have long-term implications. Other important issues are at play. In the digital era, consumer mobility is not limited to geographic constraints.
Instant and ready access is convenient, tempting and an efficient generation of enquiries, transactions, revenues, profits and the foundations of ongoing, mutually rewarding relationships.
Multi-channels are effective in communications, supply-chains and service delivery.
Multiple new payment systems have democratised business – consumer interactions and repeat transactions.
Deliveries, home deliveries specifically, have remodelled and prioritised buying decision criteria.
How do you transact? And, when do you deliver? Such questions are primary discriminators and differentiators. They have both evolved, from being virtues to imperatives.
In all instances, geographic considerations and constraints have been marginalised.
The productivity attainable, and supply-chains, networks channels and apps, are not necessarily determined by size or physical presence.
MILITARY PARALLELS
What-ever happened to “pocket battle ships”? Their value was to qualify the power of the punch rather than the size of the puncher (user).
Military forces, Australia’s as an example, are not necessarily growing. Prime focus is on specialisation. Drones, remotely controlled, are examples. So too is the deployment of special-forces, like the SAS (Special Air Service) and commandos.
The charge of the Light Brigade, Waterloo and the Western Front in World War 1 will remain on the pages and chapters of history.
The need for extensive distribution networks (retail footprint) has waned in recent times. Access to digital channels, online transactions and sophisticated logistics satisfy intending customers.
Impulse and spontaneous purchases, stimulated by exposure to retail premises, have been overwhelmed by mobile phones and like instruments.
Share of market is now often a function of share of digital (rather than physical) presence. Bold statements about being big, bigger or biggest are largely outdated, irrelevant and ineffective.
The distribution, deployment and support of resources can now be achieved with, and by “Little Me” brands. Shade of Disneyland in Anaheim, California, and one of its most popular rides;
“It’s A Small, Small World”
All one needs to do is to stand up, speak up and stand out.
Barry Urquhart
Marketing Strategist
Marketing Focus
M: 041 983 5555
E: Urquhart@marketingfocus.net.au