The retailer’s infrastructure

So why haven’t they done this already? I think it is a case of not having the correct infrastructure.

Manufacturers are set up to manufacture, make deals with retail groups and react to their orders and estimates.

The retailer has the staff who are used to forecasting demand from the outset of the season, they have people who know how to buy and micromanage stock, and manage distribution.

Retailers have stock control systems, warehouses, distribution centres, logistics teams. And the cash flow. Retailing is an extremely complex and sophisticated business and most manufacturers simply do not have the resources or the know –how to undertake it themselves. But some of them will move into that area in the next few years.

Personal services retailers

One type of retailer that cannot be replaced by the internet is the personal service provider-the hairdresser, nail technician, beauty therapist or dentist are all likely to remain unchanged by the shopping revolution.

Retailers own brands

Another blurring of the boundaries is retailers moving into manufacturer’s territory. We have already seen retailers “backing up” the supply chain to become manufacturers with extensive own brand ranges.

Emergence of New types of retailers

We are already seeing the success of online sites such as eBay and Amazon.

EBay

EBay began as an on line auction house, which was perfect for people who wanted to sell their own pre owned goods. It has grown to offer “buy it now” services, with a general consumer to consumer service, as well as business to consumer service. So this is an example of businesses bypassing the traditional retailers and selling direct to the public, but using the eBay infrastructure for warehousing and distribution.

Amazon

Amazon began life as an online bookseller, and quickly moved on to DVDs and CDs, videos, video games and MP3’s and now stocks many categories of product.. They are a major provider of cloud infrastructure services, and offer international shipping for their products.

They now produce their own brand electronics, most famously the kindle. They also have a range of Amazonbasics, an example of a retailer becoming a manufacturer

Top 10 Global Retailers

In 2014, half of the world’s biggest retailers were American. As time goes on there will inevitably be retailers from the emerging powers of China, India and Brazil added to the list. The current list, ranked according to their 2013 net revenue is;-

Wal-Mart US
Costco US
Carrefour France
Schwarz Germany
Tesco UK
The Kroger Co US
Metro Germany
Aldi Germany
Home Depot US
Target US

Source DTTL’s annual Global Powers of Retail report