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.

702 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 702 community a safe and welcoming space for all.

702 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.

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

Read More
How the symbol for a good idea has outlived the product that inspired it

How the symbol for a good idea has outlived the product that inspired it

The history of General Electric is the history of electric lighting and after 125 years they may be selling it.

5 year-olds may never get a car licence

5 year-olds may never get a car licence

Cars might not only be autonomous by 2030, new drivers will probably not be allowed to drive.

The best way to listen to music is to hire it

The best way to listen to music is to hire it

The industry noted for being significantly disrupted by technology is getting its groove back.

Working from home or from the office, which is best?

Working from home or from the office, which is best?

We tend to have strong views on whether people should work in offices or remotely. This will help you decide.

Who should be allowed access to your encrypted data?

Who should be allowed access to your encrypted data?

There are growing calls for governments to be given access to people’s data. Is that fair?

Humans will be returning to the moon, but how will they be fed?

Humans will be returning to the moon, but how will they be fed?

The space race has typically focused on the massive rockets needed to get there, now we need to ensure there is enough to eat.

Popular articles
What men need to know about checking for prostate cancer

What men need to know about checking for prostate cancer

Urologist and sexual health expert Dr Shingai Mutambirwa says it's vital for men above 40 to check their prostates annually.

"I'm no longer going to watch Isidingo"

"I'm no longer going to watch Isidingo"

Will Isidingo lose viewership over it's episode tackling racism?

Why SA remains unequal despite government intervention

Why SA remains unequal despite government intervention

The latest Gini index reveals SA is one of the most unequal countries in the world in terms of income distribution.

[Listen] SA's youngest female PhD grad opens up about her achievement

[Listen] SA's youngest female PhD grad opens up about her achievement

23-year-old North-West University student Musawenkosi Saurombe aces her PhD thesis passing with no amendments.

Mandela's granddaughter calls for Jacob Zuma to step down

Mandela's granddaughter calls for Jacob Zuma to step down

Ndileka Mandela says it's a blatant "No" when asked if she will be voting for the ANC in the next elections.

Terror expert explains why Hawks probe on coup plotter arrest doesn't add up

Terror expert explains why Hawks probe on coup plotter arrest doesn't add up

A man who allegedly plotted assassination of prominent South Africans including Zuma, Guptas and Maine is set to appear in court.

Warder recalls "prison hell" as he retires after four decades at Pollsmoor

Warder recalls "prison hell" as he retires after four decades at Pollsmoor

Chris Malgas speaks about his experiences as a prison warder at the notorious Pollsmoor prison for four decades.