What’s Next for Specialty Retailers?

In my last posting, “The Coming Retail Sea Change” I
wrote about the troubling outlook for big box retailers. 
How long can they sustain their current
infrastructure (store counts, store size and distribution center) when
confronted by the head winds of technology and demographics?  Simply put, changes in technology have driven
consumers (particularly younger, tech savvy ones who no longer love their cars
as much as their smart phones) to use big box retailers as showrooms.  The ability of ecommerce providers to utilize
this unintended service at no cost to them has resulted in an unsustainable
retail model for those who depend upon large numbers of consumers willing to
drive to and ultimately purchase from a big box retailer. 

What, however, is going to happen to specialty retailers?  These small, mom and pop operators, have long
suffered from the dominance of the big box retailers and have been further
battered by the internet.  Will they
become extinct like big box dinosaurs or will they survive and come out of the
shadows when the behemoths of retail are gone?

My prediction is that those who use their small size and
specialization as a strength will ultimately benefit. 
By providing a hands on education in their
product specialties (think Marbles the Brain Store) and at some point in the
future charging for that expertise as a service while selling the product
itself at internet competitive prices will be a potential model. 

I would be interesting in knowing how those of you in the
specialty retail community see the ongoing battle for retail supremacy.  Are you hopeful or concerned?  Do you have a solution?  Let us know.

3 thoughts

  1. I once met 4 or 5 years ago a specialty retailer with a great grandma/grandpa customer with huge numbers of little people and they kept a full track of the 20-odd birthdays, presents given, etc. As a result the great grandparents never messed up on the dates or the chosen presents, and the store had an excellent repeat customer.
    That is the style/depth of service that is now even more important to keep the specialty sector vibrant.

  2. I think you nailed it on the head. Regardless of if you’re big or small, mass or specialty, those retailers who don’t adapt with the consumer’s changing buying habits WILL become dinosaurs. But that’s where specialty retailers should be able to excel. They have the ability to listen to their customers and rapidly react to opportunities. The reality is that there are many reasons why consumers shop where they do – price is only one of them. A retailer can no longer assume that just because they have the product, consumers will beat down their door to buy it. But absent of any other added value, it’s all too easy for the transaction to become a commodity purchase and the consumer will simply buy it where they can find it the cheapest.

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