The big squeeze is on. Where will you pop out?

This time of the year there is much navel-gazing resulting in posts containing predictions. This is NOT one of those.

Recently I had reason to look for something in an old presentation I remembered giving at a Sensis Marketing Conference.  In that presentation I made a

I have saved one slide as an image HERE – and you can read all 19 predictions I made in March 2008. (You will see how many prediction I got right/wrong when you scan the image.)

But one ‘trend’ in particular is transforming retail at this very moment – and it does not get much air time. I variously refer to it as the ‘dumbbell’ effect or the ‘big squeeze.’ More technically would be the term ‘channel compression’.

In effect what it means is that the middle-ground (of anything) being squeezed out of existence.

In retail it means the small, authentic and unique will survive along with the mega big, mega-cheap – and very little else.

In shopping centres it means convenience centres and regional/super-regionals will survive (albeit after some transformation) – and very little else.

In movies it is Multiplex or Art House – and little else.

In e-commerce it is the long tail.

I would go so far as to say that anybody wanting to make a fist of anything would have to apply ‘extreme niche-ing.’

The existence of the ‘long tail’ was first conceived by Chris Anderson of Wired magazine – and this phenomenon has shape e-commerce and (possibly because of the influence of multi-channel retailing) the effects are now being felt in traditional retail as well.

 

 

What does this mean in practice? If I am right, it means that:

It is highly unlikely that Harvey Norman (for instance) will succeed with the current iteration of www.harveynorman.com.au. They would be much better off creating a site for (e.g.) TVs –and sell TVS and nothing else. Let’s face it, when was the last time you went online to buy a TV and bought a sofa on the spur of the moment. The site selling sofas is one click away anyway.

It is highly unlikely that the www.westfield.com.au shopping portal will ever reach the heights envisaged. If it does, it will be despite a powerful trend that only seems to getting stronger and stronger.

If you are a retail entrepreneur wanting to start or grow a business right now, your best option is to find a point-of-difference that will be attractive to a niche market – and attack that market with all your resources.

If nothing else, the dire economic forecasts will enable the brave and reward the strong – which is not such a bad thing after all.

And speaking about the brave; I would like to extend an offer to readers of this blog. To stimulate my grey matter I teach occasionally at University of Wollongong; and starting early February 2012 I am running a Retail Management subject for the MBAs and post grads.

As part of the program, I am opening up all the tutorials to readers of Inside Retailing – FOR FREE. If you are interested, email me (contact details on my website) and I will send you more info.

But note in advance that you will not be formally registered and you will receive no accreditation and it does not include invitation to the actual lecture days. It is done completely via e-Learning (online). I am doing this because I think the students will benefit from having practitioners in the online forum – and you may benefit from getting to test the waters to see if this is something you may actually enjoy.

Dennis

Dr Dennis Price consultants to the retail supply chain to effectively acquire and grow their presence in retail with the right skills, strategies and systems.