Understanding the Retail Industrys Ecology - Essay Example

Download file to see previous pages The totality of the relationship between consumer and retailer is underpinned by established trust in the brand or retail organization, having superior service quality, and providing perceptions of value as determined by important target consumers (Deng, Lua, Wei and Zhang 2010).
However, in order to be a relevant and sustainable retail model that maintains loyal consumers, the capability of the business to evolve is critical. Evolution, from a retail perspective, suggests such activities as repositioning the brand, altering pricing structures, providing new product offerings, or even changing promotional strategy. Because external market conditions change consistently and consumer behavior patterns fluctuate, it has been argued that retail evolution is a critical consideration vital to maintaining long-term profitability and competitiveness for a retail organization.
However, based on the tangible reality of conducting retail business, should it be considered valid that evolution is essential for understanding the dynamics of consumer ecology for a retail firm? Through an exploration of the Wheel of Retailing Model and theories of innovation, evidence indicates that evolution is absolutely critical to sustaining positive ecology between consumers and firms which were founded on vintage brand ideologies and consumer relationship development.
Michael Porter, a renowned business strategist and theorist, identified that one of the primary risks to a retail business is the threat of new market entrants (Gamble, Thompson and Strickland 2010). With the emergence of new competition, it lowers the switching costs to consumers as it pertains to the brand defection of a preferred retailer in favor of the new competitor in the market. What, however, drives consumers to have an incentive to begin developing a relationship with a new market entrant? In some markets, as iterated by the Wheel of Retailing Model, a new market entrant may establish a low pricing structure. ...Download file to see next pagesRead More