Understanding the History of Disruptions in Retailing
Download as PPTX, PDF
1 like522 views
These days it seems like that the popular media mostly highlights the inevitable doom of brick-and-mortar retailers and the boom of online retailers such as amazon and alibaba. However, in doing so, it is easy to overlook the valuable lessons thought by previous disruptive innovations in brick-and-mortar retailers and what building blocks made them successful before e-commerce stole the limelight of popular media. Full Article on History of Disruptions in Retailing: https://jawwad.me/understanding-history-disruptions-retailing/
Understanding the History of Disruptions in Retailing
- 1. History of Disruptions in Retailing Adapted from HBR Article Patterns of Disruption in Retailing by Clayton M. Christensen and Richard S. Tedlow & The Piton. Original State 1st Disruption 2nd Disruption (Sustaining Innovation) 3rd Disruption 4th Disruption Timeline Before 1900s 1900-1940 1940-1970 1970-1990 1990 to Present Profitability GM=45% Turn=2.5x ROI=113% GM=40% Turn=3x ROI=120% GM=40% Turn=3x ROI = 120% GM= 23% Turn=5x ROI=115% GM=5% Turn=25x ROI=125% Retailer Types Specialty Stores Aka Local Corner Stores 1. Department Stores Aka General Merchants Example: Macys Marshall Fields 2. Catalog Retailers 1. Malls Aka Strip Centers, Mass Retailers Example: Gap, Malls 2. Specialty Catalogs Discount Dept Stores Aka Category Killers, Value Players, Club Stores Example: Costco, Kmart, Target Also include specialty discount stores HomeDepot, Staples, etc Internet Retailing Aka e-commerce Example: Amazon, eBay, Dell Introduced Navigation as a business where business can become affiliated with the customer by providing info. Business Model Higher service, high inventory, high prices, and local knowledge. Shopping Experience: Behind-the-Counter lower service, lower prices Shopping Experience: Self- Service Shopping Cart Enabling Technology: Railroad (department stores) and Rural Free Mail Delivery (Catalog Retailers) Product Selection: Standard Products Targeted selection Shopping Experience: Suburban Life Enabling Technology: Automobile Product Selection: Mass Market Products lower service, lower prices Shopping Experience: One-Stop Shopping Enabling Technology: Computer Systems, Distribution Systems, and Vendor Management Product Selection: Commoditization (global megabrands) and private brands Shopping Experience: Online Virtual Shopping and Services Enabling Technology: Internet and Navigation-as-a- business. Product Selection: Infinite and Customization Mission of Retailing: The right product, In the right place, at the right price and at the right time Profitability: Largely determined by two factors: Margin and Turn by jawwad.me