The Power of Retail

Well, they just might be! According to industry experts this might be the case as discounters such as Wal-Mart, Southwest Airlines and Dell Computers are slowing down while regular priced retailers are seeing a growth spurt. While the 1990s were all about perfecting the low-cost model, whether it was for clothes or airplane tickets or computers, the current scenario has changed while discount retailers are struggling, regular priced companies are poised to surge past them.

Wal-Mart’s top line has remained weak, with its revenue and comparable store sales growing very slowly. The only section that has seen any significant growth has been its grocery section. Southwest has cut back on its expansion plans and is also changing its service model. Dell is now looking towards it founder Michael Dell to boost sales again.

Don’t be fooled into thinking that consumers don’t care about price anymore, instead it is that price discounters can only go so far in basing their entire USP as price and now have to come up with a newer model that will work in today’s environment. When these retailers launched their low price incentives, they stood apart from all the other retailers and companies, but others adapted and created more price conscious models of operations. Due to the success of low-cost retailers, a slew of competitors emerged which also challenged and took away some success from the original lot.

Discounters will continue to thrive but will need to shift their focus from only price to other aspects of the business as well. Merchandising is one such aspect that will play a key role to their expansion and growth in the future. While discount retailers have been focusing only on price, their competitors have become creative in offering a complete bouquet of services such as convenience, style, quality as well as superior service.

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