Shopkeeper, don't give up!

Trader! Don't give up!

A small shopkeeper is a guardian of traditions and passions, who with dedication and love transforms his shop into a place of meeting and discovery. Every day, with skilful gestures and a sincere smile, he welcomes customers as friends, offering not only products, but also stories and valuable advice. His business is a refuge of authenticity, where time seems to slow down, allowing those who enter it to savor the essence of the community and human warmth. In an increasingly hectic world, the small shopkeeper represents an anchor to the past and a bridge to the future, keeping alive the genuine relationships and attention to detail that make every shopping experience special.

Do we want to be more technical? A small shopkeeper is an entrepreneur who runs a small business, based mainly on his own work and that of his family, with a limited capital investment.

Important premise ! In recent years, small retailers have faced increasingly complex challenges, with sporadic and difficult sales. There are three main reasons for this crisis:

1.       Contraction in purchasing power: The increase in operating costs, due to rising inflation and energy price increases, has eroded the spending power of households. In the last two years, the purchasing power of Italians has fallen by 14.7 billion euros, with an average loss of over 540 euros per household.

2.       Different purchasing process of Generation Z: Born in the digital age, Generation Z uses mobile devices and social media with dexterity, profoundly influencing their consumption habits. 92% of Gen Z members have already purchased products online, and 72% use their smartphones to shop.

3.       Greater importance given to immediate fun and travel: Generation Z shows a preference for experiences over material possessions. Nearly one-fifth of respondents say they prefer to spend money on special experiences rather than products.

In addition to these main reasons, there are other factors that contribute to the difficulties of small retailers:

4.       Rise of e-commerce: The convenience and choice offered by online platforms have shifted a significant portion of consumers to digital purchases, putting physical stores in a bind.

5.       Commercial desertification: Over the past decade, commercial desertification has hit Italian villages hard, reducing economic vitality and the availability of

6.       Generational transition in family businesses: In Italy, many family-run companies have to face the delicate moment of generational transition. Only 30% of these companies survive the first generational change, and just 13% make it to the third generation. This process can be complicated by divergences in the view of the business between generations, lack of communication and trust in heirs.

7.       Evolution of Generation Z's consumption habits: Young people in Generation Z, despite being digital natives, show a renewed interest in physical stores, seen not only as places to buy but also to socialize. However, their expectations are high: they are looking for integrated shopping experiences between online and offline, special promotions and strong engagement through social media. Retailers must therefore adapt by offering unique and interactive experiences to appeal to this generation.

8.       Difficulty in adopting digitalization: Many small retailers struggle to integrate digital tools into their daily operations, both for internal management and customer interaction. This lack of digitalization can limit their ability to compete with more technologically advanced competitors and meet the expectations of modern consumers.

9.       Changing market dynamics: Consumers' growing preference for omnichannel shopping experiences and the influence of social media are transforming the retail landscape. Small stores must adapt to these new dynamics to remain competitive.

Paroloni, but in the end the question is simple: The difficulty of small retailers in fully meeting the expectations of today's consumers derives mainly from the limited variety of products they can offer. Unlike large chains or e-commerce platforms, small stores have limited space and resources, making it impossible to have the full range of products a customer could want.

Modern consumers, accustomed to the vastness of the online offering, are specifically looking for particular products and expect to find them easily. When a small store is unable to provide exactly what the customer is looking for, the customer tends to turn to alternatives that guarantee greater availability, such as online platforms or department stores.

In addition, the convenience of online shopping, which allows you to compare prices, read reviews and receive the product directly at home, further contributes to diverting consumers from small physical stores. Although many Italians still prefer to buy in physical stores, e-commerce is gaining ground thanks to its ability to offer a wide range of additional products and services.

Now I'll give you a practical example of the old and new purchasing process:

Alice is 50 years old. His body changes and he feels the need to buy new trousers. What does he do?

·          He comes up with three or four stores to go to based on his past experience based on recommendations from other people close to him

·          He finds the time and goes

·          He looks, he tries, he doesn't find, he finds, he adapts, he is convinced, he chooses and buys.

·          She comes home with trousers, not the ones she had dreamed of and desired but others similar or different, comfortable and that still dress her.

Alice is 25 years old, dresses everything and feels the need to buy a new pair of trousers. What does he do?

·          He comes to mind or searches the web for three or four vintage shops where they sell used clothes (Humana etc. etc.) he goes there, if he finds he buys if he doesn't find he goes away.

·          If she goes away, she walks and in front of her walks a person with cool pants. She approaches, takes pictures of them if she doesn't want to ask, then asks google what trousers they are, detects the brand and model, inquires, searches for them on the web throughout Europe, finds them, of the brand, color and size of hers. In Bilbao they cost less, he buys them on the web and receives them in a couple of days.

Do you understand the difference between the two purchasing processes? This is the important question that few evaluate.

Now let's say a few words about the large chain stores that are certainly not doing better than the small shopkeepers. In recent years, numerous large chain stores have faced significant crises, both in Italy and in the rest of Europe. In Italy, historic brands such as Benetton, Coin, Conbipel, Geox and Furla are experiencing economic difficulties, due to a drop in purchases and a lack of ability to adapt to market changes.

At the European level, other chains are also experiencing critical moments. For example, Marks & Spencer in the UK has announced the closure of 100 stores by 2022, due to a decrease in sales and the need to restructure its operations.

These crises are often attributed to several factors, including the growth of e-commerce, changing consumer habits, and the inability of some chains to adapt quickly to new market dynamics. The COVID-19 pandemic has further exacerbated the situation, accelerating the transition to online shopping and putting a strain on traditional business models.

To address these challenges, many chains are reviewing their strategies, focusing on the integration between physical stores and digital platforms, reducing the number of underperforming stores and trying to offer shopping experiences more in line with the expectations of modern consumers.

And now let's fly over the e-tailers and see what happens. In recent years, several luxury e-tailers have faced significant crises, highlighting the challenges of the high-end fashion e-commerce industry. In addition to Yoox Net-a-Porter (YNAP) and Farfetch, other platforms have experienced difficult times:

1. MatchesFashion: In March 2024, Frasers Group decided to withdraw support for MatchesFashion, questioning the sustainability of the business model of online luxury fashion platforms.

2. Mytheresa: Despite a recent acquisition, Mytheresa has faced declining demand, reflecting the difficulties common among luxury online retailers.

3. Nykaa: The Indian retailer reported lower-than-expected profits in the first quarter of 2024, with a significant decrease in sales in the apparel sector.

These crises are attributable to various factors, including:

• Changing consumer habits: Customers are returning to in-store purchases and prefer direct interactions with brands, reducing their reliance on online multi-brand platforms.

• Logistical challenges: The complexity of international shipping and high returns costs have negatively impacted the profitability of e-tailers.

• Direct competition from brands: Many luxury brands are boosting their e-commerce platforms, reducing reliance on third-party retailers and increasing competition for e-tailers.

These dynamics indicate a need for luxury e-tailers to revise their strategies, focusing on innovation, operational efficiency and building closer relationships with consumers to remain competitive in a changing market.

The current overview of retail highlights significant challenges for both small retailers and large chains. Small businesses are facing a structural crisis, with declining sales and increasing competition from e-commerce and large chains.

On the other hand, even large chains are not immune to difficulties. Some historic brands are going through deep crises, due to a lack of ability to adapt to new market dynamics and the growing preference of consumers for more personalized and local shopping experiences.

Looking ahead, the retail industry is likely to continue to evolve towards more integrated and digitized models. Physical stores could be transformed into experiential spaces, focusing on personalizzati services and the creation of local communities. The adoption of omnichannel strategies, which integrate the online and offline experience, will become increasingly crucial to meeting the expectations of modern consumers.

In addition, sustainability and attention to the environment will play an increasingly central role in consumer decisions, prompting both small retailers and large chains to review their operating practices and product offerings.

The future of the retail sector will be determined by the ability of companies to adapt quickly to changing consumer needs, integrating technological innovation, sustainability and a strong connection with the local community.

Technological Innovation

The adoption of advanced technologies is crucial to improve the customer experience and optimize internal operations. Artificial intelligence (AI) enables personalization of the offer, analyzing consumer data to predict their preferences and offer tailored recommendations. For example, AI can analyze shopping behaviors to suggest relevant products, improving customer satisfaction and increasing sales.

Omnichannel is another key component of technological innovation in retail. Integrating online and offline channels allows consumers to have a seamless and consistent shopping experience. For example, a customer can order a product online and pick it up in-store, or check the availability of an item via a mobile app before physically going to the store. This synergy between channels increases convenience for the customer and expands sales opportunities for the retailer. citeturn0search2

Sustainability. Growing environmental awareness is influencing consumers' purchasing decisions, who prefer brands committed to sustainable practices. Retailers can respond to this trend by taking steps such as reducing the use of plastic, focusing on eco-friendly packaging, and offering repair services to extend the life of products. For example, some stores are eliminating unnecessary packaging and promoting the use of recyclable materials, as well as offering repair services to encourage more responsible consumption. citeturn0search3

The commitment to sustainability not only meets consumer expectations, but also helps differentiate the brand in a competitive market, strengthening the company's reputation and building a loyal customer base.

Connection with the Local Community. Physical stores can strengthen their role within the local community by offering spaces that go beyond simply selling products. Organizing cultural events, workshops or collaborations with local artisans transforms the store into a social hub, promoting a sense of belonging among customers. For example, some retail parks are evolving into social hubs, integrating green spaces, event areas, and community services to create a more inclusive and engaging environment.

This approach not only attracts customers, but also strengthens the retailer's position as an integral part of the community, creating long-lasting, trust-based relationships.

It seems that future success in the retail sector will depend on the ability of companies to embrace technological innovation to improve the customer experience, adopt sustainable practices that respond to growing environmental concerns, and cultivate a strong connection with the local community. These integrated strategies will allow retailers to remain relevant and competitive in an ever-changing market.

For a small retailer nearing retirement, navigating the momentous transformations in the retail industry can be a significant challenge. The motivation and competence needed to adapt to these changes can be influenced by several factors:

Motivation.

Proximity to retirement: A few years after retirement, some retailers may not perceive a sufficient return on investment to justify adopting new technologies or innovative strategies.

• Resistance to change: After decades of doing business in a certain way, the idea of changing established processes can generate natural resistance.

Competence

• Digital literacy: Implementing digital tools requires specific skills that may not be present in long-established shopkeepers.

• Updating on trends: Keeping up-to-date on the latest market trends and consumer expectations requires dedicated time and resources.

Support Strategies

To facilitate this transition, the following strategies could be considered:

• Targeted training: Offer specific training courses for the adoption of digital technologies and to understand the new dynamics of the market.

• Intergenerational collaboration: Involving young professionals or family members in the business can bring new skills and perspectives, facilitating the adoption of innovations.

• Technological simplification: Opt for user-friendly technological solutions that require a minimum investment in terms of time and resources for learning.

• Institutional support: Trade associations and local institutions can provide support through consultancy, incentives or programs dedicated to the digitization of small businesses.

In conclusion, although the challenges are considerable, with the right support and approach, even small retailers close to retirement can adapt to the transformations taking place in the retail sector, ensuring the sustainability of their business until the moment of retirement. It certainly takes a very strong motivation and the ability to face a total change.  Who really owns this abability?

In today's digital landscape, a number of online "gurus" are emerging who promise foolproof strategies for success in the retail industry. However, it is essential to approach these figures with caution and a critical spirit.

Identifying the "Fuffa Gurus"

The term "fluff guru" refers to individuals who, without solid experience or expertise, offer advice or courses promising extraordinary results in a short time. Often, these people use persuasive marketing techniques, showcasing luxurious lifestyles or unverifiable testimonials to attract customers. An example of critical analysis of this phenomenon is available in an article by Fabio Pellencin, who provides seven simple steps to unmask the fake gurus and cheaters of the web.

Critical Approach and Source Selection

For a small shopkeeper close to retirement, it is essential to carefully evaluate the sources from which to draw advice. We recommend that you:

• Verify Credentials: Examine the professional background of the consultant or trainer, looking for concrete experience in the retail sector.

• Avoid unrealistic promises: Be wary of those who guarantee quick success or high earnings without a proportionate commitment.

• Look for Authentic Testimonials: Rely on verifiable feedback from other professionals in the field.

Continuous Training and Reliable Support

Instead of following advice from dubious sources, it is preferable:

• Participate in Accredited Courses: Contact recognized institutions or trade associations that offer specific training for the retail sector.

• Join Professional Networks: Connect with other retailers to share experiences and proven strategies.

• Consult Experts with Tangible Evidence: Work with consultants who can demonstrate concrete results obtained in similar situations.

In conclusion, while there are good professionals who offer advice in the retail sector, it is essential to distinguish between authentic experts and "fluff gurus". A critical approach and careful selection of information sources can help small shopkeepers adopt effective and sustainable strategies to face the challenges of today's market.

There is a lot of advice you can give but one that I would really like to give is to travel to other countries and meet colleagues and talk, talk and talk. After a while some news comes out and novelty means idea, innovation, a good start. Then on how to do it, help is asked but the important thing is to decide how to do and how to do it.

Good future shopkeeper, hold on, innovate and don't give up!