The Evolution Tornado Retail

The Evolution Tornado Retail

Bernd Hallier (EHI Retail Institute, Germany)
DOI: 10.4018/978-1-60960-738-8.ch002
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Abstract

No attention at all was paid to the evaluation of philosophies offered by the steady upgrade of retail-technologies. While the period 1970/80 was still the push period, when the consumer industry wanted to push the penetration of its products the outlet was the “point of sales” (POS); in the 90ies due to ECR the outlet was rediscovered as the “point of purchase” (POP) with the buying decision and shelf-optimization as a central point; in the last decade big players like WalMart, ALDI, REWE pushed their outlets to be the “point of differentiation” (POD) to gain a Unique Sales Position (USP) in the market. The next big “technological jump forward” will be the intertwining of Facebook, YouTube, and Twitter with new media of retailers. Consumers can gain much more impact onto the listing of products, onto services within a store. It might be the time when the outlets become a “point of consumers” (POC) again.
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Background

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:

  • stores belonging mainly to consumer’s cooperatives

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

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

  • with a limited assortment of roughly 200 products

  • offered by stores of about 30 to 40 square meters

  • 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.

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