Question

Chapter 4 1. Many bricks and mortar retailers have struggled against competition from internet retailers - book retailers and travel agents are two examples. Advise a traditional book retailer how it might redeploy its existing resources and capabilities to compete effectively with online booksellers. Which resources and capabilities would be key?

Answer 1

Online retailing has gathered momentum quite quick, and nowadays, people prefer to buy from online retailers rather than traditional offline retailers because of the convenience of online browsing and shopping. But, there are a few strategies that could be used by traditional retailers that could give online retailers a run for their money. Considering the question here, where I would have to advise a traditional book retailer on how to put up and maintain competition with online retailers, keeping in mind that existing resources are to redeployed, I would advise them to:

1. Focus on Niche Products and Services by checking out the existing inventory of books and only keeping those books that are niche. Online retailers generally offer a wide selection of books. By finding a niche and offering special edition books that the customers would not find online, it could give you a competitive advantage over the online book retailer.
2. Customer service must be of top priority. The level of customer service decides if the customer comes back to you again. It could make or break your store. If you treat them poorly, they won't come back. Retaining customers is crucial. A happy customer could go and tell their friends about the store, hence converting them into potential customers. Training the already existing staff on how to handle customers and make a sale would be a good idea to redeploy the already existing human resources.
3. Streamline the product catalogue. This goes hand in hand with providing niche products. By offering a limited catalogue of books, the customers get a feeling of exclusivity.
4. Offer discounts and better deals on books. By offering products at a lower price than online retailers, there is a fair chance that customers would prefer your store than any online site.
5. Reduce the size of the retail store to bring down costs without compromising on quality. A huge disadvantage of a traditional retail store is the investment in real estate. By reducing the size of the store, it is like cutting your losses.
6. Give a guarantee and warranty of purchase to the customer. In case of any complaint, the customer knows exactly where to come to address and solve the issue. By providing them with guaranty and warranty, you are increasing the trust the customer has on you as a traditional retailer.

By following these strategies to redeploy its existing resources and capabilities, the traditional book retailer can compete effectively with online booksellers.
The key resources and capabilities required to do so are:

• Store Personnel
• Product Catalogue
• Improving customer satisfaction
• Fixed asset - in this case, the bookstore