Why stationary retailers have to rethink their assortments
In order to survive in the market, stationary retailers will have to become more flexible, be more responsive to the wishes of their customers, change their product ranges more frequently, and stand out from the uniformity of offerings.
By Martina Schimmel, zentrada-Manager
In recent years, online retailing has significantly changed consumer behavior: Commodities are purchased online, offline shopping is based on strolling and spontaneous purchases. Shopping is becoming a leisure activity. People go into town to meet friends, browse through shops, and be entertained.
At least that’s what consumers would like to do. In reality, however, they often encounter boring shopping streets – because everywhere they go, there are identical city centers with identical assortments and arbitrary products. “The arbitrariness results from the neglection of an easily remedied merchant characteristic: The knowledge of products and assortments”, writes Jochen G. Fuchs, the experienced business editor with retail experience, also known as E-Fuchs in the industry, in his well-known column in the magazine t3n.
In his opinion, it should no longer be the strategy to define the 20 percent of the assortment that generates the most sales. After all, the sales of the future will no longer be distributed on only 20 percent but will be more widely spread across the assortment. “It is a question of selecting and presenting the remaining percentages as wisely as possible. Having very special products in stock, moving unspectacular products to the longtail, and reducing inventory. More unusual products, less ordinary products. Less product pressure, more assortment width and/or assortment depth.” And, of course, a frequently changing product selection.
But there is one thing the stationary retailers should not try: To compete with the diversity of online commerce. Instead, they should turn the flood of products to their advantage through targeted selection and curation. “If the retailer fails to do this, he is making one final, fatal mistake,” says Fuchs.
In collaboration with many experts, the sourcing platform zentrada has developed guidelines that are supposed to help stationary retailers to optimize their assortment. The retailer first analyses his customer structure and develops new approaches based on the findings.
To find the right approach for any shop, the following questions are helpful:
Location: Do visitors and tourist pass by or almost only locals?
Customer structure: Who has been buying from me so far? Singles or families?
Supply situation: Are there gaps in the local supply of everyday goods (food, health & beauty, household supplies) in the area? Which assortments are missing?
Frequency: Which additional services could increase the frequency in my store? (e.g. parcel shop, coffee bar or lottery tickets?)
Assortment: Which seasonal occasions or regional promotions could be used for short-term offers? Which product lines would generally fit to my core assortment?
In order to implement these concepts, retailers need a modified sourcing strategy. Until now, regional retailers have been dependent on a few fixed suppliers to ensure the efficiency and quality of processing. In the future, however, stationary retailers will need a reliable source offering many different products, which can be ordered and reordered flexibly in small quantities.
The relationship between the core assortment and changing assortments will have to change significantly. Today, a glass-porcelain retailer has all brands and product variants in its store. In the future he will only have a smaller core assortment and a larger share of the store will be changing assortments. As an example, the assortment can be adapted to the season, promotion weeks (e.g. French week), or according to regional aspects.
If stationary retailers want to survive, they must inspire and excite their customers – especially walk-ins – with new ideas and products. Ideally with products that the visitor hasn’t thought of himself – because otherwise he would probably have bought it online already.
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zentrada is Europe’s largest sourcing platform for stationary and online retailers of consumer goods. The zentrada sourcing platforms offer more than 400,000 products and best wholesale prices from more than 200 leading European importers, manufacturers, and wholesalers with one order processing. Based on its long partnership with zentrada, the IAW has negotiated a special offer for you. You receive a 3-month Premium Membership (value 49 Euro) for free when entering the following referral code during registration: ZEN-IAW-2020
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