Another (less than iconic this time) retailer has gone bust. Game group sold console games to chavs and had two brands, GAME and Gamestation which cannibalised each other’s sales. The problem is that even the most enormous, PC-challenging game can easily be delivered over the Internet, and there is no tactile element which demands you have to feel the merchandise before you take delivery. So there is no reason to own a shop to sell games. A website can be run with a small call-centre, and half a dozen software engineers. There is simply no need for a vast estate of shops with staff, managers, cleaning contractors, rent, rates and theft, the cost of which must be built into the price of the product, meaning you can NEVER compete with online.
Just as Manufacturing jobs are vanishing while productivity is going up, the same is true of retail. This is how an economy grows: all those people employed doing one thing – in this case, shop assistants and managers, are freed to do something else, sell coffee for example. You can argue retail is a leisure activity, but it’s an expensive one, and so people mooch around shops, then go home and buy it, whatever it is, cheaper online. If you’re selling a product of interest mainly to spotty boys who wear hooded tops, they will take the opportunity to nick the merchandise. Retailers will simply not regard providing a shop window and somewhere for youths to hang out as a viable business model, and will close.
High-streets must therefore shrink. We simply don’t need as many shops as we used to, just as we don’t need as many factory workers or farm-labourers.
If you’re going to invest in the business, invest in those with the scale to dominate their product area, and the logistic nous to get objects to people’s homes in less than 24 hours. Tesco, for example was the first business to make money out of online Grocery in the world. E-bay, Amazon and Wiggle are all big players in their niche. And there is a real opportunity in a privatised Royal Mail, which is going to be responsible for all those “fulfillments” in the “last mile”.
The future of e-fulfillment
Online takes 10% of the UK retail spend and it’s growing fast. Everyone will laugh, but your humble postie is the key to making online retail work, and the packages will render the domestic mail network as profitable as the business one (perhaps more so, as most “business” mail is advertising junk). If there is an IPO of the Royal Mail, depending on the price, I will be investing.
http://bracken.uk.com/wp-content/uploads/2012/03/250px-Postman-Pat-1.jpg250250Malcolm Brackenhttp://bracken.uk.com/wp-content/uploads/2017/07/logo-2.pngMalcolm Bracken2012-03-27 10:11:002017-07-21 01:43:31Game Group & What it means for Retail