Open all hours

Like the amiable Albert Arkwright in the 1970s comedy Open All Hours many local shop owners believe that the secret of success in retail business is “to keep profits high and overheads low”. But running a retail business in today’s technology driven world is not quite like running a small corner convenience store in Doncaster in the 1960s. Today’s savvy customers have an almost infinite choice of where to secure some of the things they need to buy.

Not unlike Britain we can very justifiably label ourselves as a ‘nation of shopkeepers’. Many of those with entrepreneurial skills and some capital have ventured into the retail industry and earned a decent living in times when selling goods was influenced by a combination of now obsolete political decisions based on import restrictions, oppressive exchange control, tight customs vigilance and import substitution.

This has now changed and the EU is planning further liberalisation of the retail market in goods and services to encourage more cross-border business by small businesses. Soon consumers will enjoy equal protection when buying goods from anywhere in the EU and retailers will have to guarantee equal consumer rights to all their customers wherever they may be located in the Union.

So, it is going to take more than practically ‘opening all hours’ for business to revitalise our retail sector. Electronic commerce is here to stay. The implications of this are daunting on the way small shops operate. Customers can in theory order anything they like at any time of the day or night and have it delivered at their home in a day or two. Initial concerns about paying online are beginning to be cleared by the introduction or more secure ways of payment like PayPal.

In our case, customs officials are becoming more pragmatic and less oppressive when they see packs of merchandise coming from an EU country so customers are increasingly less concerned about the hassle that they were traditionally subjected to when ordering goods from abroad. Many are already looking exclusively at buying their electronic goods online. Others buy books, clothes, and now even gourmet food from virtual stores somewhere in the world. The situation for local retailers is unnecessarily complicated by bad planning in major road and civil engineering works that are carried out at times of the year when disruption in the flow of customers will affect their business in the most negative way. The case of the current construction projects taking place in Valletta shows why some long suffering retailers are on the brink of giving up.

This disruption is in addition to the already difficult situation that has been created by the authorities’ inability to come up with a workable parking strategy for those wanting to enter Valletta to do their shopping. The situation is not much better in other towns like Sliema, Mosta and Hamrun.

But the long-term solution for retailers has to be found in the adoption of an electronic commerce strategy for their businesses. Retail outlets in most European towns are finding it increasingly difficult to compete with the online retailers like Amazon and Ebay. Mothercare and Dixons in the UK are closing a number of shops in city centres because with the high rents and overheads that their stores attract they do not have a chance of competing with the online retailers who usually have little overheads, and even less money tied in stocks.

The kind of products that used to attract an attractive profit margin, like electronic goods and clothes, are today being sold at prices that are heavily discounted on those found in the shop windows of stores in city centres. Our retail businesses need to consider the whole world as their potential market and create the electronic platform that will enable them to do so. They may need to join forces to achieve this, but hoping for a revival in retail business without an electronic commerce strategy in place is no more than ‘dreaming the impossible dream’.

For most retailers ‘click and brick’ is the way to go: maintaining a physical presence through their high street shops but also providing online shopping options for today’s technologically savvy and busy customers. The technology to achieve this already exists and has today become that much more affordable than it used to be. What is lacking is the cultural change that many retailers, especially those involved in family businesses, need to adopt to make themselves relevant in today’s market.

jcassarwhite@yahoo.com