The Evolution Tornado Retail

Innovation Waves

In macro-economics Nikolay Kontratjeff was the first to describe innovation waves/cycles (Kondratjew, 1926); on the company-level it was A. Schumpeter who analyzed the life-cycles (Schumpeter, 1961). In between is the retail industry as a segment of a national/international economy – the first descriptions of 25-year-long cycles starting from the year 1800 were described in 2004. After World War II those innovations had been in roughly 1950 the introduction of self-service/supermarkets, in 1975 the shopping centres and category killers like IKEA, ToysRus and in the year 2000 the internet with B2B and B2C (Bauer and Hallier,1999; Hallier, 2004).

That rough pattern of course can be broken down into more detailed facets for the total retail industry – also as a bench-mark for the individual company performance.

The Mum and Papa Service Stores

For Western Europe a new Chapter of Innovation in retail started after World War II. (ISB, 1988; Hallier, 2001; Hallier, 2004).

The 50ies of the 20th century in Germany for example the characteristics of the food sector had been:

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  stores belonging mainly to consumer’s cooperatives

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  with very atomistic influence onto the suppliers mostly in walking distances of some minutes for the consumers

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  organized instore in service concentrating to pack sugar, beans, butter, margarine from bulk-delivery into the quantities demanded by consumers

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  with a limited assortment of roughly 200 products

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  offered by stores of about 30 to 40 square meters

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  in towns quite often split into specialist-shops like milk-shops, fruit and vegetable shops …

As the products were not “pre-packed” of course no real branding could happen for most of the products. Branded goods like “Oetker”, “Bahlsen” were in minority. The consumer were guided by the oral advice of the shop-owner/-manager. Due also to small flats and without cooling-opportunities for butter, milk etc. consumers visited daily their neighbourhood-store. The outlet was not only supplying the consumers with products – but was within a limited radius a social communication centre.