Stinginess is unseemly

The market is changing day by day and faster and faster. What used to be the advice of a specialist is now the Internet. Consumers now get their information online, and many buy that way, too. Traditional specialty stores seem to have trouble keeping up with the rapid changes of recent years. But it is necessary, otherwise there is a threat of extinction.

by Rolf Fleckenstein

The market has changed, especially people's consumer behavior, and the sports trade is also feeling the effects. In particular, traditional sports stores that have grown for decades are suddenly facing extinction. A sad example is Kost Sport in downtown Basel, which had to give up its business at the beginning of 2015 after almost 150 years of existence. Many factors contribute to the decay of the retailers, be it lower margins, the cheap competition from abroad, which is available on the Internet during 24 hours, or be it the large discount chains, which pick up the customers with low prices and long store opening hours.

Today's customer has other priorities
But first and foremost is the consumer. It seems that the priorities of the Swiss consumer have shifted. In the past, the specialist retailer was regarded as a trustworthy address where people received good advice and high-quality goods. But there was also no alternative at all, either in terms of expertise or in terms of purchasing. But today, the advisory competence, the information and the quality are no longer in the foreground. In particular, information about a product is available a thousand times over on the Internet, and it's free, so why ask a retailer, who only sells the goods he buys anyway? The past years of the euro problem and the financial crisis have obviously left their mark. The priority today is price. The consumer is more price-sensitive than ever. The price, the price and then the price again, that's obviously the motto of today's consumer and long-established specialist retailers with high prices, old-fashioned opening hours and poorer purchasing conditions are less and less able to keep up. It is precisely here that the discounters are striking at home, squeezing out more and more specialist retailers thanks to lower prices, and also the stores in neighboring countries, which are attracting thousands of Swiss with low prices. The complicated "I have to order here, they have to come back there" behavior also makes shopping tedious for consumers, especially when they can order more easily and conveniently on the Internet. And store opening hours until 6 p.m. during the week and until 4 p.m. on Saturdays are absolutely out, no customer wants to go along with that anymore. Roman Oberholzer, managing director of Och Sport on Zurich's Bahnhofstrasse, confirms this in conversation with me: "We, too, are observing that people are increasingly shifting their shopping into the evening, and you can consider opening the store later. We, too, have recently adjusted our opening hours."

Of course, the changing buying behavior of consumers does not only affect the sports industry. The same picture can be observed in many towns and villages: traditional specialist retailers are disappearing and what is left is an empty shop window and the town is becoming emptier and emptier. No matter if it's Ascona or Zurich: What you didn't know until a few years ago are the numerous empty shop windows and stores that you discover unpleasantly while strolling around. An unpleasant feeling creeps over you, is the city dying, is the village dying? In the end, banks and 1001 snack stores remain, that can't be it. The price-oriented consumer behavior has a direct influence on the cityscape of today. The former advertising slogan "Geiz ist geil" (stinginess is cool) of the German discounter Saturns is now often enough the consumer's guiding motto. But for the retailer, stinginess is anything but horny, stinginess is unhip, because that meant its slow death. The traditional company Vaucher in Bern also had to react due to steadily declining sales: Three branches were closed: Bern, Biel, and Schönbühl, with the headquarters in Niederwangen remaining. Roman Oberholzer of Och Sport in Zurich counters that despite a similar positioning as a traditional sports retailer, he sees no parallels with their business, although they too are confronted with the problems of the euro and the decline in sports sales. But individual mistakes are always made, too. "We have deliberately always remained a sports store and have not advanced to a fashion house like Kost Sport, for example. Vaucher had probably competed too much with the big discounters and sports retail chains with its various stores." The market environment has become more difficult, but you can persist and be successful.

Warning for existing retailers to rethink their own concept
For all existing specialty retailers, the closures of Kost Sport and Vaucher are clear warning shots to rethink their own strategy. Today's customer wants a nice ambience, shopping at any time of the day or night, and of course always the best price. No store will be able to meet all these requirements at the same time best of all, but the customer judges the store according to such key criteria. If discounters focus more on price, high-quality specialty stores focus more on the pleasant shopping experience. High-quality sports stores, such as Och Sport in Zurich, employ trained professionals who provide the best service. This high-quality service is highly appreciated by customers. "We don't have students standing at the checkout," says Roman Oberholzer of Och Sport. Performing poorly on all points will result in negative consequences. Existing specialty retailers will have to assess themselves properly accordingly, position themselves and consider new strategies if they don't want to lose their customers or even gain new ones. A unique store concept is one thing, a contemporary presence on the Internet is another. It must be clear to everyone today, Internet is a must and an Internet store parallel to the store is also an important option that MUST be examined. And yet you can actually find stores that do not offer this today, where Internet is a foreign word. The customer doesn't want to follow the store, but the store has to follow the customer. If the store doesn't cater to the customer, the customer will go to the competition. Retailers have to come up with something if they want to stop the threatening negative spiral. Those who show initiative will be rewarded, those who struggle to make changes will probably soon be among the losers.