Christiaan Rikkers

As consumers are bombarded with a constant flow of bad news, formulating a long-term strategy is no easy task. To do this effectively, it is necessary to understand the development of the retail business and to look at it retrospectively.

Retail generations
The traditional small-sized corner shop was the first generation in retailing. These 'Pappa and Mamma' stores had a strong social relationship with the customer. This first retail generation was the first stage in the disassociation of producer and consumer. Before that, producer and retailer were one and the same: the baker sold his own bread and the farmer sold his own vegetables at market.

In the eighties and nineties, third generation retail concepts began to develop. Retail marketing was introduced; from store concept to store brand. The store focused on its own customer-base and, with the right communication and concept, a strong store identity was created to differentiate itself from the competition. Many retailers are still engaged in the process of store-brand creation and market differentiation.

A few retailers are now entering the fourth retail generation: multi-format concepts. This means that they are targeting individual consumers using different formats, at different locations and at different times of the week. Segmentation is the keyword in this process of change.

It goes without saying that retailers entering the fifth retail generation - multi-format and multi-channel - are few and far between. In this fifth generation, the retailer has almost total control, optimising management of the complete flow of goods from producer to customer … and in doing so, they are closing the circle: industry and retailer are almost synonymous once again.

Having to change to stay the same
That economic and social trends impact on retailing is, of course, nothing new. The retail industry is influenced by social change like no other. Developments taking place today define the behaviour of the shopper tomorrow, the reason why the retail sector is often run on a day-to-day basis. Successful retailers however, know that day-to-day operations have to take place within the framework of a long-term strategy.

Retailing is about running the day-to-day operations, especially in such turbulent times as today, but always based on a long-term strategy. This long-term strategy is not as difficult as it may seem. Just determine the stage of development your company is at, compare this to overall developments in the retail industry and connect up to these developments.

Join the fourth retail generation now and, when you’re ready to take the leap, go for the fifth generation - multichannel and multiformat - and take total control!