First it started sapping the vibe from HMV, then hammering down Focus and now the recession is melting Thorntons from UK high streets. All in all, there is a distinct Dickensian air wafting through our once great shopping streets.
But I’m not ready to give up hope, not one bit. Why? Well, it’s certainly got nothing to do with Mary ‘Queen of Shops’ Portas and her new role as retail adviser to the government. No, I believe that the solution can be found in procurement – or rather joint purchasing among smaller chains or independent entities.
What is killing the high street is the Internet. First, because people can just have what they desire sent to their doorstep all tied up with a nice little bow and second, because online retailers can sell at lower prices as a result of not having any overheads from running such pointless things as shops (note the sarcasm). Even I don’t think procurement can overturn the ease of shopping online, but it could make significant differences when it comes to prices.
This all stems from a story I wrote about Citroën and BMW agreeing to jointly purchase components for their hybrid cars
. The key point was that none of the parts were customer facing, so BMWs would still be BMWs and Citroëns would still be Citroëns.
But could this concept be transferred to the retail sector? There may be a marked difference, but I don’t see why not. Independent music stores, for instance, have been hit from two directions. The Internet is the main factor, but the rise of supermarkets as music stores has also had a significant impact.
Supermarkets offer a small selection (the chart top 20 or 30) at low prices because of the amount they order. Independent music stores can’t do this because they are separate entities and buying as a group would defeat the whole object of independence… or would it? Aren’t chart albums the equivalent of hybrid car components?
I believe joint purchasing could have a positive impact on the retail sector, provided it’s used appropriately. I’m no expert, so I’d be really keen to hear your views. Could joint procurement be used by chain stores? Does procurement have the answer to the declining revenues from pubs? Let me know in the comments below.