The retail landscape was once predicated on four fundamental principles, often referred to as the 4P’s: Product, Promotion, Price, and Place.
The human element, or ‘People’, was not deemed as significant during those times.
However, with the management revolution of the early 1980s, triggered by seminal works such as “In Search of Excellence” and “Re-inventing the Corporation”, the significance of ‘People’ in the business equation was recognized.
This led to the addition of ‘People’ as the 5th pillar of Retail.
At RetailDOJO, we advocate for the crucial role all these pillars play in a retailer’s journey towards success.
We’ve observed the downfall of numerous businesses due to their negligence or disproportionate focus on one pillar over the others.
This article does not aim to delve into detailed strategies for managing all pillars— our comprehensive training, courses, guides and tools for success already tackle that, which you can explore on our website.
Instead, we’re introducing another potent pillar of Retail: “Pixel”, representing technology, in keeping with the “P” tradition.
Hence, we now discuss the 6P’s of Retail.
Technology’s influence in retail success is escalating.
From customer databases, inventory control, loss prevention, supply chain, workforce management to business and Artificial intelligence, technology is transforming the efficacy and efficiency of retail operations.
Retailers unwilling to adopt this technology wave are at risk of becoming obsolete.
Therefore, RetailDOJO encourages you to recognize and integrate technology as a vital pillar of retail, a move that can significantly boost your business’s profitability and overall success.
However, it’s noteworthy that many retailers fail due to:
- Inadequate treatment of their people, resulting in high attrition.
- Suboptimal utilization of compensation plans, rewards, and incentives, both monetary and non-monetary, leading to escalating wage costs.
- Insufficient use of technology, barring supply chain tech, which is only one aspect of the whole equation.
Even those retailers who claim to comprehend the 6 Pillars of Success in Retail: People, Price, Product, Promotion, Place, and Pixel, often fall short in achieving their goals due to an excessive focus on Product/Merchandising.
A prevalent misconception is that ‘Product is paramount and everything orbits around the product.’
While a quality product is undoubtedly crucial, it is not more vital than the people selling it, its pricing and promotion, the place where it’s available, or the technology required to streamline operations.
Overemphasis on one pillar causes an imbalance. Consider a three-legged stool— remove one leg, and the stool topples over.
Retail businesses need a balanced attention to all aspects of their operation. Neglecting this balance can lead to business failure or unachieved potential.
Many retailers excel as ‘merchants’, proficient in procuring products, displaying them in stores, and monitoring sales.
However, an excessive focus on product and merchandising often leaves other areas deprived of necessary attention.
Reflect on these points:
- How effectively do you think your undertrained, minimum-wage employees represent your products to customers?
- Are you unintentionally eroding your profit margins by training your customers to wait for markdowns before purchasing?
- How would you assess your store’s image and the overall shopping experience it delivers compared to competitors in the market?
- Are you operating with outdated, inefficient technology, hindering progress due to system-imposed constraints?
Without addressing these areas, achieving maximum profits remains elusive.
At RetailProwess, we understand how to strike a balance between all pillars.
The solutions for enhancing profits via a balanced approach to all pillars are within your reach.
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