The rise of huge mass merchandisers and specialty superstores, the formation of vertical marketing systems, and a rash of retail mergers and acquisitions have created a core of superstore mega retailers. Through their superior information system and buying power these giant retailers can offer better merchandises selections, good service, and strong price saving to consumers. As a result, they grow even larger by squeezing out their smaller, weaker competitors.
The mega retailers are also shifting the balance of power between retailers and producers. A relative handful of retailers now control access to enormous numbers of consumers, giving them the upper hand in their dealings with manufactures. For example, in the United States, Wal-Mart’s revenues are more than five times those of Proctor and Gamble, and Wal-Mart generates almost 20 percent of P & G’s revenues. Wal-Mart can, and often does, use this power to wring concessions form P & G’s and other suppliers.
Retailing operates in a harsh and fast changing environment, which offers threats as well as opportunities. For example, the industry suffers from chronic overcapacity, resulting in fierce competition for customer dollars. Consumer demographics, lifestyle and shopping patterns are changing rapidly, as are retailing technologies .To be successful, then, retailers will need to choose target segments carefully and position themselves strongly. They will need to take the following retailing developments into account as they plan and execute their competitive strategies.
TOday's retailers are increasingly selling the same products atthe same prices to the same consumer in competition with a wider variety of other retsilers. For example, you can buy books at outlets ranging from independent local bookstores to warehouse clubs such as Castco, superstore such as Barners and Noble or Border or Web sites such as Amazon.com. When it comes to brand name appliances, department store, discunt stores, home im provement stores, off-price retailers, electronics superstore, and a slew of Web sitesall compete for the same customers. So if you can't find the microwave oven you want at Sears, just step across the street and find one for a better price at Lower's home Depot-or just order one online form www.Amazon.com