The document discusses successful retail business models that have emerged during the economic downturn, focusing on three examples. It notes that retail decline is not inevitable if businesses think innovatively. The examples highlight models that reduce costs by partnering with existing outlets, providing online ordering access through nominal in-store stock, and teaming with local stores to stock goods and allow delivery. The document argues similar models could help larger retailers and restore village stores as community hubs.

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Published on 1 August 2011by Tony Groom
Successful Retail Business Models Can Happen in a Depressed
Market
Despite the ongoing doom and gloom on the High Street there have been some
bright spots.
All the following success stories illustrate a crucial point – that retail decline is not
terminal, as long as businesses think innovatively.
The first success story is Coffee Nation, which has recently been bought by Costa
Coffee. Coffee Nation achieved its success by cleverly positioning machines in
existing outlets delivering fresh ground coffee from bean to cup. Their machines
were taken up by Tesco Express, Texaco, Shell and Welcome Break.
This was a business model that kept costs to a minimum, with no retail outlets of their
own and no staff needed to operate the equipment. Instead they developed a
machine and a back-up maintenance service and piggybacked into already well-
known outlets, al of which were serving people in a hurry. This kept staff overheads to
a minimum.
The second success story is Kiddicare. This Peterborough-based company is
essentially an online store but with one larger than normal warehouse/store.
Customers can browse but they place their orders and organise delivery online at
booths in the store. The company has recently been acquired by the Morrissons
supermarket chain.
The third example is an electrical goods supplier, in Eastern Europe not in the UK, but
its model could easily work in this country. Wanting to roll its business out nationwide
in a country with very limited rural retail buildings or internet access, it positioned
some of its electrical goods in village stores and also supplied these stores with
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2. internet access and terminals for customers to make orders and organise delivery to
the village shops for pick-up.
In the wake of the recession and the fall out in the UK’s High Streets many villages
and towns around the country are unable to support a large number of shops,
forcing people to drive further to a retail park
The above business models show that a new way of doing business is emerging
where the retailer no longer needs dedicated premises but can provide online
access, possibly with a nominal level of in-store stock or samples for consumers to
then purchase online and either have their goods delivered to the shop or direct to
their homes.
It is a shame that the Post Office has not yet embraced such a model as this would
justify the Post Office remaining at the heart of the community.
Some years ago one of the UK’s big four supermarket groups started to experiment
with teaming up with local village stores to stock a range of their goods and allow
customers to order items to be delivered to the shop. This particular supermarket
chain operates a loyalty card points scheme but did not make it available through
the village store initiative, although it was available to customers who used the
company’s online ordering and delivery service. The village store scheme is being
discontinued because the relationship between staff time and return on sales was
not considered good enough.
However, turnaround advisers argue that with a bit of thought and planning and a
proper business model there is no reason why larger retail chains could not operate
similar schemes to survive and prosper as well as bringing some life back into village
stores to help restore them as the viable, environmentally friendly community hubs
they once were.
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