Volitility in the most stable of markets

International retailers need to be conscious of how a market could change affecting the viability of their operation.  Tescos' operation in Thailand is an often used example of this given the significant threat to their Thai chain in the wake of the unexpected military coup in 2006.  To the outsider Thailand appeared a very stable nation...  And so we turn to what you might think to be one of the most stable countries in the world; America.  Now I'm not suggesting a coup d'état in America; I'm pretty sure that is unthinkable, but talked about legal changes that would really threaten the viability of Tescos American operations.  California is home to around 125 of 175 'Fresh and Easy' stores, and there is talk of an outright ban in the purchase of alcohol through self-service tills.  Tesco installs self service tills exclusively as an essential part of it's low cost strategy.  As the only grocer in the state to operate self-service tills it is clear that this law is specifically targeting the 'new kid on the block', and if it comes into effect will have a huge effect, forcing Tesco to rethink their strategy and presumably refitting their stores with at least some conventional cashier tills - all on top of a chain that is said to be underperforming and being challenged from a range of commentators.  So in even the most stable of nations it is best to have a plan B.

Calling time on Argos??

Internet retailing has provided great opportunities and challenges to more traditional forms of retail commerce.  Today's striking news that Argos' LFL sales are down some 9.6% surely will bring the company to fully examine their strategic options.  Make no mistake, a 9.6% fall in sales is massive & even more difficult for a retailer such as Argos who cannot quickly flex their marketing to stimulate greater sales - after all their catalogue is printed with fixed prices etc...

For a long time I have thought that Argos has been too conservative in the face of a changing retail environment.  E-commerce and the growth of supermarkets into non-food areas have introduced great challenges, but I believe also great opportunities for the company.  What is it that Argos are great at??  They don't have a great product offer - that can be replicated by Tesco deliver or Amazon...  Their real unique selling point lies in their ultra efficient store operations and selection of convenient locations around the UK.  So how best to utilise this resource.  Well in the face of growing e-commerce threat why not use these stores as collection hubs for the consumer - they could give their local store as their address and collect on a weekly basis all of their non-perishable on-line shopping.  As a consumer there is nothing more annoying than to get home from work and find that three different couriers have tried to deliver packages & I now need to embark on a road trip to 3 different depots to collect my orders...  far rather collated at a store of my choice with a simple customer focused collection method.  This service could be free to the consumer with the on-line retailers giving Argos a cut and saving considerably on the otherwise increased courier costs.  It does seem that there is a current gap in the market to better serve the on-line retailers and while the current Argos model is surely doomed in a few years they would be best placed to serve this new need.  & while their at it what about an Argos drive through....

1,155,347,700 customers are waiting

That's quite a big number & surely quite a big opportunity for the worlds largest retailers to chase.  It is of course the population of India a retail market that has thus far been largely closed to international retailers due to protectionist laws preventing multi-brand retailers from holding a majority stake in retail ventures in the country.  As we have seen gradually across the world such restrictive laws have been relaxed, and it seems that within months India will follow suit finally opening the market up to the likes of Tesco and Wal-Mart.  Large scale investment into the Indian market by the likes of Tesco will not only provide a great opportunity for them, but the necessary investment in distribution infrastructure and change of retail culture will no doubt expose opportunities for a whole raft of international retailers.