2015-02-19-奥纬咨询-Bricks-and-Mortar_Retail_5页_136kb

Brick-and-Mortar Retail Survival in the Online Age

Overview

E-commerce is reshaping the retail landscape, posing threats to physical stores but also creating opportunities for those who adapt. Retailers face challenges due to high fixed costs and sensitivity to volume losses, while certain sectors are more resilient.

Key Threats and Vulnerabilities

• E-commerce impacts all retail markets, with vulnerability varying by sector. High-value, easily shippable products (e.g., books, electronics) are more exposed, while sectors like grocery and DIY have limited online penetration so far.
• Retailers with weak competitiveness or financial health are at greater risk; even modest volume losses can lead to store closures and business failure.
• Thin-margin sectors (e.g., grocery, DIY) are highly sensitive to online disruption due to low profitability.
• E-commerce may drive market consolidation, making it essential for retailers to develop online channels.

Opportunities and Resilience

• Resilient sectors include health and beauty, eyewear, and jewelry, where online impact is less severe.
• Opportunities arise from the dynamic environment, with stronger retailers better positioned to capture online and offline sales.
• E-commerce disruption can favor the most successful brick-and-mortar players, highlighting the need for proactive adaptation.

Strategies for Incumbents

• Build Competitive Advantage: Focus on cost control, supplier negotiations, and range management to amplify small advantages over time.
• Proactive Store Strategy: Identify and manage weaker stores to avoid closures, prioritizing regions where competition is fierce.
• Transform Fixed Assets: Reduce costs by reorganizing store networks and supply chains, accepting rationalization through closures when necessary.
• Develop an online presence to complement physical stores, leveraging logistics networks over competitors.

Conclusion

E-commerce presents both risks and rewards; by implementing these strategies, brick-and-mortar retailers can thrive despite online challenges, potentially gaining market share through careful adaptation and resilience.