It
is said that competition is a key ingredient in retail. But in its rawest form competition
can be destructive and like many things retail perhaps a more sophisticated
approach is desirable here.
A
trader recently expressed concern at increasing competition within the market.
His concern is that key products in his range are being cherry-picked by new
traders and heavily discounted. Selecting a limited range, perhaps compromising
on quality, and then buying in volume can bring price reductions, but at what
cost?
Our
established trader carries a broad range of goods, insists on top quality, and
backs up with a range of services including, website, social media engagement
and a variety of delivery options.
Of
course some competition can be healthy, and after all we are a market, but is a
rush to the bottom doing us any favours?
Shopping
centres carefully curate their offer, and yes there is strong competition, but
it is more about complimentary competition. In other words, varying the offer so
that it broadens rather than creates sameness. Retailers are selected for the
niche they have carved in the retail framework, rather than just their ability
to sell the same thing at a cheaper price.
And
then there are wholesalers many of whom understand the importance of a unique
offer. If you want to stock the same product as another retailer in your immediate
vicinity, you will be discouraged. Why kill the established retailers business
with price based competition?
This
is a complex issue. Maintaining a competitive offer while protecting the
traders who have put in the hard work is not easy. It is easy to say “let
competition take its course”. Perhaps a better way is to curate the offer so
that each new trader adds to the total rather than cannibalises somebody else’s
products. We all want financially successful traders who get reward for effort
and feel they are part of the market family. There are enough headwinds from
outside competition without adding internal ones.
By Greg Smith