Retail is simple. You take widgets, you put them on a sales floor, you put a sign outside that says “we sell widgets” and people who want widgets come and buy them. That’s as complex as retail should be, right?
So why has retailing become so complicated? Why are there so many articles, books, blogs, gurus, and consultants (including today’s business) trying to unravel the mystery of big box retail? Why are people like Howard Shultz of Starbucks or Chip Wilson of Lululemon revered as gods?
Because retail is not simple. In fact it is very difficult. As the saying goes, “retail isn’t rocket science. It’s much much harder.” Here’s why…
It’s easy to sell widgets until someone else comes along selling them for half the price: damn widgets made in China! They’re even very good quality widgets, and frankly, consumers don’t seem to mind that they’re not made here.
Then, down the street, they open the Widget Depot, which sells 2,036 varieties of widgets at low prices every day. They’re not big on service, but if you want a certain widget, they have it. To make matters worse, they advertise like crazy on the W network (the widget network), so when people think of widgets, they think of Widget Depot. They are also open every day of the week until eleven at night. Who would have dreamed that people would go shopping for gadgets at that hour?
Then, across town, The Widget Experience store opens. They know more about widgets than anyone. Widgets are like a religion to them. It’s a bit creepy actually, but they serve cappuccino and play really cool music that enhances the widget shopping experience. They even offer free WiFi! Its widgets cost four times the average, but somehow people are willing to pay for it. Go figure!
Then widgets.com starts. Now people can buy widgets at any time of the day or night without leaving home! They ship fast and often charge less than the local widget store. In fact, online widget sales are skyrocketing.
We can’t forget WidgetBay, where used widgets are auctioned off at a fraction of the price of new ones. In fact, there are over 3000 used widget lists right now!
The fact is that nowadays people can buy widgets anywhere and everywhere.
And therein lies the reason why big retailers get big. They are aware of what is by far the most important retail lesson of all. That is not about the widget. And it never has been.