February 6, 2015

Small retailers, big brands and factories

Since the end of last Century, we are facing a polarization of the market. The usual way Companies were distributing their products, completely changed.

The small shops, the soul of the commerce, are unfortunately slowly disappearing and with them is disappearing the knowledge of the product and the consultant’s service they were giving.

Big groups have their mono brand shops, strictly following the product’s and marketing’s plans of the head offices, often supported by millions of euro invested in advertising campaigns and events.

In the middle you have the multi brand retailers, trying to select the best on the market and offering it to their customers, but often not able to financially support a right advertising and communication relationship with the consumers, and certainly not able to compete with the big brands in proposing events and promotions.

Finally Companies have more and more their outlets, their direct e commerce web sites and their direct sales events.

Final consumer has a wide selection of opportunities to buy a product and usually he is selecting the most convenient, the less expansive or the one with wider offer.

It is a kind of war between brands, retailers and factories to arrive first to the final consumers. Complicated by the fact that instead they actually should cooperate to reach the same target.

It is a love/hate relationship.

Keeping in mind that you can’t stay on the market without advertising, the key point is to have enough profit to be able to invest in advertising. How can you do it ? The matter is quite simple : you have to increase the prices (if you have a brand strong enough to support higher prices) or you have to reduce the production cost (translated = lower quality). Somebody do both. Somebody try to keep or increase the quality and service and keep the prices linked to the real value for the quality. You can guess where we are..