Living with disruptive innovation

Independent convenience retail

At the age of 47 one of my great great grandfathers moved from Cardiff back to Wellington in Somerset after more than 30 years. The year was 1899 and he set up a horse drawn transport business. It operated both passenger and commercial services which included the Post Office contract to carry mail from the town to the railway at Taunton. The business did well for 10 years or so until it was hit by disruptive innovation.  Henry Ford developed a system to build motor vehicles cheaply and the mass use of horses in transport rapidly declined. My gr. gr. grandfather’s solution to his change in economic circumstance was to open a sweet shop with his daughters.

It’s fair to say that retailers in our channel are going through an unprecedented period of change and disruption caused by innovation. On-line has dramatically changed the way consumers shop. The way the multiples operate has seen dramatic change with a significant transfer of day to day branch operating processes being managed centrally, WH Smith have proved masters at this. 

Innovative disruption in retail is not just the result of technology and the internet. The last 12 months has seen a shift in consumers choice of supermarkets. Tesco, Sainsburys, Asda and Morrison’s have been given a bruising lesson in market disruption by Aldi at the discount end and Waitrose at the opposite end of the market.

For Aldi its about price and their very memorable series of TV adverts. Waitrose are growing market share by price matching the big 4 and offering an instant reward loyalty card. Their free coffee and free newspaper offer is compelling and causing disruption to coffee shops and newspaper retailers near to them.

betterRetailing.com’s Australian contributor Mark Fletcher has been operating a successful discount voucher in his stores for some time. What are you learning from this disruption and how are you changing your business?

Steve Denham
Steve worked in retail for more than 40 years. For more than half of his career he ran a village newsagent with his wife. Steve blogs about all different aspects of retailing from community development to government legislation. He is always looking for an interesting debate so leave a comment on this blog or tweet him to share your views.

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