Recapitulation of the analysis of the problem so far
In the previous two publications: (see “Logistyka” 1/2002 and 2/2002)
• the logical conditions for the foundations of the analysis of logistics applications in the retail system were discussed, including: the decalogue of the logic of the problem, basic definitions and explanations, and the classification of retail activities, product flow in the source-destination system (retail), as well as monitoring and reorientation of the structure, location, and conditions of purchases
• 10 theses on the importance of retail and retail logistics were presented, along with basic metrics weighing on the logistics service system of this trade network in a given area, a synthetic diagnosis of the structural-functional state of Polish retail, and the main tasks of logistics in the system of external flows of cargo, people, and information in the source-destination relationship.
• 10 theses on the importance of retail and retail logistics were presented, along with basic metrics weighing on the logistics service system of this trade network in a given area, a synthetic diagnosis of the structural-functional state of Polish retail, and the main tasks of logistics in the system of external flows of cargo, people, and information in the source-destination relationship.
Projection of the scope of comparative analysis
In the European Union, there are four freedoms of movement: of people, goods, services, and capital. Poland’s accession to the EU, as well as the intensive and extensive development of foreign retail chains in our retail space, lead to the conclusion that it is worth recognizing the significant dimensions of retail in some European countries. The conclusions drawn from the analysis of these dimensions should be used in shaping the development of the Polish retail system, which will soon – as a member of the common European market – find itself in a real confrontation with these countries. Knowledge of the conditions in this market should facilitate the rational resolution of problems related to retail logistics services in Poland.
In the panorama of the retail market, management theory occupies a prominent place, showing the significant definers of the development of these retail systems, their offer transformation, organizational life cycle, and customer acquisition and purchasing behaviors.
Three hypotheses of retail development
The analysis of the development of retail systems and their transformation corresponding to changes in the country’s economy, new sales technologies, consumer requirements, and competitive challenges confirms the need to take into account the circumstances formulated in the following hypotheses of retail development, and more specifically the emergence of new forms of sales.
Market hypothesis – new types of ventures appear, such as offering low prices, a limited range of services, and operators with low margins and low wealth status, who use almost Spartan equipment:
• the customers of the new types of ventures are people from lower-income groups whose financial status encourages them to purchase low-priced products
• over time, merchants improve their entrepreneurial status by offering goods at higher prices, more pleasant sales area arrangements, and a larger range of services, which requires higher margins and results in turnover and momentum that attracts customers with higher incomes
• this flywheel effect of development was visible in the evolution of department stores
• the growth of trade will likely make merchants sensitive to understanding the laws of their market and the ability to adapt to it
• results of trade growth: replacing price competition with non-price competition and creating a vacuum at the edge of the low-price market, which may eventually be filled by new competitors with low prices and low margins.
Market hypothesis – new types of ventures appear, such as offering low prices, a limited range of services, and operators with low margins and low wealth status, who use almost Spartan equipment:
• the customers of the new types of ventures are people from lower-income groups whose financial status encourages them to purchase low-priced products
• over time, merchants improve their entrepreneurial status by offering goods at higher prices, more pleasant sales area arrangements, and a larger range of services, which requires higher margins and results in turnover and momentum that attracts customers with higher incomes
• this flywheel effect of development was visible in the evolution of department stores
• the growth of trade will likely make merchants sensitive to understanding the laws of their market and the ability to adapt to it
• results of trade growth: replacing price competition with non-price competition and creating a vacuum at the edge of the low-price market, which may eventually be filled by new competitors with low prices and low margins.
Dialectical hypothesis – it adapts Hegel’s conviction that existing institutions are constantly challenged by new and opposite ones:
• Hegel argued that an old thesis (existing proposition) is always confronted with an antithesis (opposing proposition), hence the interaction produces a synthesis (a combination of applied and opposing propositions), which has the characteristics of both the established thesis and the opposing antithesis, and then, once the synthesis is established, it is challenged by a new antithesis
• changes in trade are often a response to competitive challenges, and a dialectical approach to the problem means considering the effects of these challenges on trade.
• Hegel argued that an old thesis (existing proposition) is always confronted with an antithesis (opposing proposition), hence the interaction produces a synthesis (a combination of applied and opposing propositions), which has the characteristics of both the established thesis and the opposing antithesis, and then, once the synthesis is established, it is challenged by a new antithesis
• changes in trade are often a response to competitive challenges, and a dialectical approach to the problem means considering the effects of these challenges on trade.
Assortment hypothesis – considered as a everything-selected offer-everything relationship, it postulates that development in retail should proceed from general-line through specialized or limited-assortment back to general-line sales:
• history proves that general stores were displaced by limited-assortment stores, and these were replaced by department stores
• the theory states that the size of a settlement is a key factor in the location of a specific type of trade/store within it, whereby as the settlement grows, specialized stores offering a deep assortment replace general-line stores, and when the settlement reaches the status of a large metropolitan area, department stores carrying both a deep and wide assortment of sales are supported.
• history proves that general stores were displaced by limited-assortment stores, and these were replaced by department stores
• the theory states that the size of a settlement is a key factor in the location of a specific type of trade/store within it, whereby as the settlement grows, specialized stores offering a deep assortment replace general-line stores, and when the settlement reaches the status of a large metropolitan area, department stores carrying both a deep and wide assortment of sales are supported.
The article comes from the magazine “Logistyka” 3/2003.