Wednesday, April 06, 2005

Cellular Phone Services & Bill Payments. Attention, All Merchant Retailers.

From... Grocers: The New Easy System For The Read Ahead. Cellular Services & Bill Payments.

"Managing and reducing costs is the only way for retailers to survive against all of the competitive threats to the industry. There is only so much labor to be reduced; only so much to be gained from benefits and insurance; operating expenses can be tightened only so far. However, the average food retail company could increase their gross profit by 1.3% by eliminating the waste in the supply chain. As an industry, this is a $20 billion opportunity. Companies who have adopted these principles have had tremendous success in lowering the cost of product, while increasing their net profit, which ultimately benefits the consumer. They have better in stock, lower inventory costs and higher productivity. CPFR.Org has case study after case study, pilot after pilot, which have proven the model. Therefore, I ask the question. Is Wal-Mart really the problem?" "Along with adopting the core strategy of meeting consumer need for basics at a lower price, Wal-Mart early-on committed to investing in the business at a higher rate than competitors. The example often cited is 'the supply chain,' but the core underlying investment that made the difference is their investment in technology. RetailLink is only possible because the investment to do large scale data processing internally (rather than relying on the reports and revenue stream of syndicated data suppliers) was made. Of course this IT investment was supply chain oriented -- but the point is that others couldn't get better because they wouldn't spend the money to get smarter. "There is an underlying parallel here with the comments about independents and their willingness to invest personal and human capital in being in their stores, developing relationships with their employees and customers. That parallel is the willingness to INVEST in something other than quarterly earnings statements. Gaining a competitive edge requires differentiation to be sure, and differentiation requires ideas. But ideas are worthless without investment. Simply stated, we don't get better because we won't pay the upfront price."

For More Information: