Stationary trade as a discontinued model? Need for action in the age of hyper-competition and post-Corona

Published : 3 years ago, on 08/03/2022

By Professor Dr Wolfgang Merkle, Professor of Marketing & Management at the UE – University of Europe for Applied Sciences

As the recent Omicron wave spread across Europe, many countries introduced new rules and restrictions. Some of these stricter regulations hit the retail industry particularly hard, disrupting supply chains and affecting consumers‘ ability to shop in a traditional way.

This has caused a further deterioration in the consumer climate, which is likely to lead to an increase in demand for online shopping. If brick-and-mortar retail wants to survive in the long term, it must be even more committed than before to playing to its strengths as a means to counter the evolution of online competitors. For customers to continue to visit the stationary retail trade, shops must work towards offering more than their version of an online shop – and not less.

In order to not only survive, but thrive in this new landscape, retailers have to revise their business strategy and sharpen their concepts. The stationary retail industry has been heavily affected by two years of temporary closures and limitations; it is now time to look not only at the difficulties businesses have faced, but also to learn valuable lessons from those struggles.

One of the core advantages of stationary retail is the physical presence of the business. The model has multisensory possibilities for staging its products via an exciting shop design and attractive visual merchandising. This strength must be capitalised on even more in the future. This is especially true given the current environment, where more and more online models are discovering the potential of the customer experience themselves and are constantly perfecting each step of the purchasing process.

The optimization of all service- and operating processes, in particular, is an aspect that stationary retail has neglected for a long time. To remain relevant to consumers in today’s competitive marketplace, the focus should no longer be solely based on cost and efficiency-driven considerations. In order to be able to succeed, the retail trade must take the perspective of consumers even more closely into consideration and integrate it into the overall operating and service quality.

This can be achieved with a self-critical review of the company‘s operations and service quality down to the smallest detail, as well as by showcasing relevant information about the manufacturer and use of individual products. Additional measures might apply to an optimization of the check out and payment process, with flexible offers that pay even more attention to the wishes and needs of consumers. Only when retailers stop thinking like retailers will they truly innovate against the competition. From the customer’s point of view, the benchmark should no longer be ‘sales per square metre’; they increasingly want to perceive it as an ‘experience per square metre’.

With the shift in consumer behaviour and usage of digital devices, retailers must also review their communication channels. The classic flyer with its regular price offers may have a superficially positive response from a large number of consumers, and the impact of this type of outreach might change from country to country. For example, German consumers in particular are always on the hunt for bargains. However, it is highly controversial whether such advertising contributes to customer loyalty or rather encourages an even more active comparison with other providers. Looking at the behaviour of today’s consumers also shows that media coverage of companies with inspiring background stories and attractive content develops a real bond with customers and even encourages increasingly important recommendations between consumers.

The attractiveness of its own business model is ensured by using content that is relevant to them – and not by the price, where most providers are always undercut by an even cheaper offer in a direct competitive comparison. The analysis of particularly successful start-ups confirms that regular, authentic and exciting campaigns, stories and videos develop a real and magnetic bond with the customer.