Magazines Archives - 2008 March

Evolving business model: Sell solutions, not products
Story 20

RETAIL is undergoing a huge transformation, from selling merchandise to selling services or, perhaps, “solutions”. This was raised at the session, Successfully Evolving Your Business Model from Selling Products to Selling Solutions, presented by a group of Brazilian retailers at NRF 2008. The key presenters were Gouvea de Souza & MD’s founding partner and CEO, Marcos Gouvea de Souza, and senior partner Alberto Serrentino. Their company operates retail stores in 56 countries.

Changes in consumption habits, noted the presenters, are seeing consumers express greater demand for convenience, solutions and services at a time when goods are being commoditised. They highlighted the growing importance of services to retailers in both mature and developing economies.

In Brazil, for example, a survey showed that more than 90% of consumers under study have a positive opinion of retailers offering services with their store names made known. Customers take comfort in knowing the retailer’s name, finding it convenient and time-saving.

Top services, or solutions, that retailers across the globe offer, and are garnering more revenue from, include financial, travel and medical services as well as “troubleshooting” services in the area of technological products, installation or do-it-for-me (instead of do-it-yourself) services. Even pure e-tailers, like, are moving more in this direction. Amazon now offers travel, financial and telecommunications services.

In France, where retailing is highly regulated, Auchan, Carrefour and Monoprix all offer financial and travel services, with Monoprix even providing third-party gardening services. Other service providers cited were Nivea, for its spa services; Costco, for its car- and truck-rental businesses; Procter & Gamble, for its move into car wash;Best Buy, for its Geek Squad programme of at-home servicing of users’ electronic products.

The supermarket business, the session noted, has been revolutionised by the offer of fresh, fully-prepared ready-to-eat meals that can be heated at home.

Opportunities also exist in catering services, with a number of companies offering on-site dining experience. The growth of in-store health clinics at drug stores in the US, where affordable health care has been a political issue, is growing into a major trend in the service arena, the session reported.

Opportunities for retailers in the “problem-solving” services area are especially strong where there are no dominant relevant brands, the speakers said.

They identified as the newest wave stand-alone services provided by retailers outside their traditional venues.

Delivering solutions requires new sets of skills, Sorrentino said. The old merchandise-oriented organisation is not appropriate. “Branding” a retail operation, he said, is increasingly important for success in the solutions environment.



2008 March Stories:

POP & Signage Solutions - Technology ushers in a new era for signages in Singapore

Armani’s first travel-retail boutique opens in HK

Beijing Olympics boosting ad spend in China

L’Oreal to focus on men in Malaysia

Esprit looks to enter luxury market

Cartier appoints new regional manager

Competition outweighs customer needs in product launches

LG, GE in agreement to share patents for home appliances

Coty’s Rimmel goes to China

US gum-maker banks on Asia

Levi’s to close 36-year-old Manila plant

Deal with causes to cap shrinkage: Expert advises

Bond girl endorses Montblanc watch

New boardwalk to help boost economic growth in Sabah

Coming soon: MBO cineplexes across Malaysia

NRF 2008 – US retailers tackle green issues, grapple with looming recession

‘Go green’ gets big boost at annual convention

The Wal-Mart story: Making ‘Sustainability Sustainable

Store of the future

What do customers want from the shop floor?

Evolving business model: Sell solutions, not products

NRF Design Studio exchange: What makes for iconic identity?

Retail executives set new benchmarks in priorities for the year ahead

Interactivity with shoppers: Big trend

Who’s hot, what’s not on Wall Street’s list

NRF honours industry excellence

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