No Business Model Lasts Forever

Apr 22, 2003
George Anderson

By George Anderson

Ryan Mathews writes, in the April 2003 Grocery Headquarters, “The relentless adherence to out-of-date business models endangers any and all companies that continue to try to insulate themselves from the future.”

According to Mr. Mathews, it will take nothing less than questioning every assumption on how business runs to fix what is broken.

On promotional funding and other forms of receiving discounts slotting allowances and unearned discounts, he suggests retailers might consider following in the steps of Wal-Mart by squeezing economies from the supply chain and passing lower prices and better values on to shoppers.

One-stop-shopping and one-size-fits-all retailing is another path that many have taken to failure. Stores would be better off (as would their shoppers) concentrating on a targeted group of shoppers and catering to their wants and needs better than the retail competition.

Smart customers know that loyalty card programs are nothing more than discount schemes. Mr. Mathews writes, “We gather POS data but, outside of selling it or finding new ways to offer even more discounts, we don’t do enough with it. Maybe it’s time to figure out which of our shoppers we really want and then set out to discover how we can create or increase their loyalty to us.”

Moderator’s Comment: Is the current business model
of supermarkets outdated?

Any activity in a retailer’s business that can not answer
the question – how it ultimately benefits consumers – is dead weight.
Anderson – Moderator

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