With the recent announcement that Mothercare is closing down 50 stores and bringing back a CEO (that they sacked no longer than a few weeks ago) to salvage their business, it led me to think…how is this happening again?
We have seen Woolworths, Toys R Us, Maplins, BHS and now possibly Mothercare go down the pan and it got me thinking how and why? I think there is one simple answer for this: the growth of the eCommerce market and, in particular, Amazon.
With Amazon now branching into the Grocery sector with Cashierless Checkouts in the US, they are already one of the biggest players in the market and will soon become a huge player over here in the UK Grocery Sector.
So should retailers accept defeat and bow at Amazon's feet? Absolutely not.
Why?
Let's look at Dixons Carphone as an example. They have proven that if you tackle the beast head on you can be successful. Since the company was formed in a 2014 merger - a deal that was in part a response to the growing threat of the online giant - they have built an unblemished record of domestic sales where rivals such as Comet have perished.
How?
The company boosted its market share by first matching Amazon on price across almost all categories and then redesigning stores to lure shoppers in (including the addition of Nespresso Bars in every store!). Dixon's has a dedicated team that monitors more than 100,000 competitor prices a day, and with Amazon making changes frequently, they run checks several times. Store employees are equipped with tablets to show how prices stack up against rivals to help convince shoppers that buying online isn’t always cheaper and it has worked, with sales continuing to grow.
So instead of rolling over and accepting defeat, we need our retailers to take note and stand up to the eCommerce giants before we see all of UK retail market disappear into the oblivion!
While ecommerce heavyweights such as Amazon and Zappos have made things a bit more challenging for offline retailers, this doesn’t mean that brick-and-mortar stores can’t compete with online merchants.
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