The Christmas season and year 2017 have just ended and the discussions and considerations for the trends and future of the retail industry are arising at the turn of the year. zentrada, Europe´s biggest independent sourcing platform for consumer goods in retailing, reflects on the developments of the last year and sees its expectations for the future confirmed. 

As expected, the online retail and surprisingly also the big retail chains, especially in the food industry, were able to grow during the Christmas season. At least in Germany, but also most other European countries, the small stationary retailers were the losers of the trend.  But zentrada also sees a strong concentration in the online trading; The mass of small suppliers and shops rather cannibalizes itself than profits.

“The scenario is tragic and again the small retailers are losing in the market, even if they have many chances”, zentrada CEO Ingo Schloo describes the situation of the independent retail industry.

While even Amazon and Alibaba invest in the stationary retail and non-food discounters such as Tedi and Action grow tremendously, most smaller retailers, but also consultants, do not recognize the trends and chances that could lead the independent retail industry to success.

The internet has changed the buying behavior of consumers sustainably, but once recognized, retailers can adapt and benefit from the changes in the long-term.

On one hand, the demand for high-price products and product groups continues to move to the Internet, visible also in the Christmas season 2017, and is there satisfied by a few big marketplaces. On the other hand, even Amazon recognizes the future of the food industry in stationary retail. Additionally, many other product groups of daily need and use, as well as promotional and seasonal items will still be offered and bought there by customers with current demand or impulse purchases.

“Active Product Policy” is the secret to success and growth, which theoretically gives the small independent retailers some advantages.

Customer focus instead of product focus is the main trend away from specialist shops.

The stationary retail lives of the local customer frequency and has to utilize this advantage with a better product strategy to accommodate the current needs of its customers. 

Broader assortments, complementary and constantly changing seasonal and promotional products increase the probability for a purchase and revenue.

The food retail increases its non-food offering, non-food discounters conquer the city centers and already think about food. Once the customer is in the store, there are no limits to the product mix policies available.

Principally, the mass of small independent retailers is at an advantage: They still own most stores in domestic areas and know their local customer structure much better than any corporation can adapt to the local needs in single city parts. Depending on the core assortment low-cost household goods, gifts, decorations, DIY tools, toys, stationery or drugstore products offer many opportunities to generate additional revenue in stationary retail.  Today, also fashion stores rather share a lifestyle and trend environment with fitting complementary product lines. Therefore, the easy reliance on one or few suppliers is not suitable to stay on top of trends and outdated in the digital era.

“The zentrada sourcing platforms have been created for these market developments and give many independent retailers easy access to products, which big retail chains are already growing with today”, Ingo Schloo explains the online offering of zentrada.   

400.000 products from more than 500 European suppliers can be ordered relatively short-term in small order quantities through one digital platform and order processing.  Online sourcing is the tool that enables especially small retailers to adapt their product lineup faster, more flexible, and customer focused than the big chains; Certainly, a lot of additional information and services are provided as well.

“Where the online selling can barely help, new assortment strategies and advantages of an online sourcing platform offer many opportunities that can be exploited quickly or step by step”, says Martina Schimmel, zentrada Manager Germany, as advice to her members. “The only things needed for 2018 are good resolutions, a little bit of courage, and entrepreneurial action”.