Why Some Retailers Thrive While Others Survive
A recent survey from financial services firm BDO found that 54 percent of retailers say they are stable and breaking even rather than being profitable and experiencing strong growth. The 2019 BDO Retail Rationalized Survey was given to 300 retailers from specialty, discount, department stores, big box and e-commerce categories with revenues ranging from $50 million to $3 billion.
Within the specialty category, 55 percent of retailers assessed themselves as “surviving” while 40 percent were “thriving.” Only five percent in the specialty category were “struggling.” Specialty retail had the second-best self-assessment scores after the pure play e-commerce category, which saw 84 percent as “thriving” and only 13 percent as “surviving.”
The survey results also included profiles of “thrivers” and “survivors.” Retailers classified as “thrivers” were usually early adopters of new technology, e-commerce-centric and carriers of exclusive products. They were also identified as good planners who anticipated negative outcomes. In contrast, “survivors” were considered risk-averse, lagging behind in technology and reliant on outside capital for stability (66 percent of specialty retailers said they needed outside capital). “Survivors” were also more likely to cite higher prices as their greatest weakness and customer service as a major advantage.
So what do these results mean for pet retailers? While these survey results were obtained from interviewing the leaders of major retailers from various product categories, they can still provide insight on how smaller retailers can run their business. The survey report discussed the best methods that enable a business to thrive, including making hard choices before they’re made for you, and anticipating tough outcomes. These choices could include closing a struggling store before it fails completely or choosing to invest in expensive technology. While pet retailers of all sizes have had success in offering an e-commerce option to accompany their brick-and-mortar business, this does not mean that has to be the case for every pet retailer. Investing in technology could mean simply finding a POS software system that streamlines business transactions and increases overall organization.
The survey also mentions that “thrivers” should take advantage of the gaps left open by their competitors. For pet specialty retailers competing against e-commerce giants that could mean offering more brands that are exclusive to brick-and-mortar and upping their customer service (the survey cited exclusive products and outstanding customer service that retailers identified as their biggest competitive advantages). In these ways, smaller pet businesses can adapt the strategies of larger specialty retailers to craft their own formula for success.