One of the most significant advantages enjoyed by the large discounters and big box merchandisers are their economies of scale. By buying an enormous volume of commodity products from their vendors, they can drive prices downward on those items. As a result, the megastores can charge less for basic items than specialty retailers can profitably charge.
Having said that, independent shop owners can find their opportunity in niches. If online retailing has made one thing clear, it is that consumers will easily gravitate toward products they want to if they are only given the option. Below, we’ll explore the long tail of retailing in the context of how small shop owners can profitably cater to niches.
Using News As A Retailing Model
To lay the groundwork for this discussion, consider the evolution of news distribution. Years ago, there were only a few channels through which you could receive the news: newspapers, network television, and radio. To be sure, consumer choice was severely limited. Today, in addition to those choices, people retrieve current events from cable television, blogs, and thousands of other online sources. In effect, the number of choices from which consumers can select has grown exponentially.
Many of these news sources cater to specific demands. Some are conservative and others are progressive. Some offer a broad swath of topics while others provide updates on certain industries or sectors. This is a perfect model for the future of small, independent retailing. Local merchants need not compete with mass merchandisers for a share of the market on basic commodity items. Instead, they should carve a niche for themselves.
Why Independent Merchants Should Carve A Niche
With the debut of online properties such as Amazon, eBay, iTunes, and Netflix, consumers have grown accustomed to having access to niche products. Were they to a package of paper towels, any brand might do. On the other hand, their tastes in books, movies, electronics, and hundreds of other retail categories has expanded into specialized areas. Therein, lies a small retailer’s opportunity.
Independent merchants can more easily attract a loyal customer base by catering to niches that are underserved by the megastores. For example, an astronomy enthusiast may be able to purchase a telescope from a mass merchandiser. However, the selection of mounts, eyepieces, and different optical designs will be severely lacking. By contrast, a small retailer who specializes in that niche can better accommodate that market.
Limitations Of Inventory Management
In any physical retail setting, merchants must cope with limited cash flow and struggle with efficient inventory management. After all, there is only so much cash and floor space and both must be used productively. Meanwhile, having cash flow tied up in merchandise is a balancing act; there must be enough merchandise held in stock to satisfy customers without unnecessarily tying up limited resources.
Catering to a tightly defined niche makes cash flow and inventory management simpler. The wide variety of assortments are targeted to a similar audience. Average ticket prices increase, customers return more often to purchase additional items, and if demand is forecast properly, inventory turns over more quickly.
The Value Of Long-Tail Retailing
What I’ve described above is not to suggest niche retailing eliminates the need for tight controls. You should still keep your inventory as lean as possible, negotiate favorable terms with your vendors, and watch your cash flow. Furthermore, you should avoid sporadic expansion into unrelated assortments (unless you have identified a clearly defined demand) and focus on providing the best experience possible for your customers.
That said, long-tail retailing is a strategy to leverage the growing trend toward specialized niche products. Small retailers can use that strategy to avoid competing with the big box merchandisers on commodity items.
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London based Hedge Fund Cheyne Capital, one of the largest alternative asset managers in Europe today announces the appointment of Max Nardulli as Head of International and Distribution. In this newly created position, Nardulli will be responsible for the marketing of Cheyne’s diverse and expanding range of products globally including Cheyne’s new real estate debt, European event driven and equity macro offerings, excluding the United Kingdom.
Nardulli joins Cheyne Capital from Goldman Sachs Asset Management where he was a Managing Director, Head of the Alternative Capital Markets team responsible for EMEA and Asia ex-Japan. Prior to this, he was responsible for GSAM business development in the south of Europe, Israel and Latin American. He joined Goldman Sachs in 2001.
Jonathan Lourie, co-Founder of Cheyne, commented, “We are delighted to welcome Max to Cheyne to support us in the marketing of our diverse range of products, including our new real estate debt, European event driven and equity macro offerings. Our investor base continues to broaden, particularly internationally and among institutions, so we are pleased to be able to add someone of Max’s calibre to our team of high-quality people to develop and maintain our excellent client relationships.”
London based Cheyne Capital, founded by Lourie and Stuart Fiertz, launched its first fund in 2000 and now manages net assets of approximately $6 billion dollars across a diversified range of products. The group currently employs approximately 170 people with its primary offices being located in London, in New York, and in Bermuda. Cheyne Capital is a privately owned hedge fund sponsor. The firm invests in the public equity, debt, and alternative investment markets of the world. The firm specializes in convertible bonds, credit and asset-backed securities, equities, and event-driven investing. Additionally, it utilizes long/short and multi strategies to create its hedging portfolios
is one of Europe’s leading alternative asset managers. Cheyne launched its first fund in 2000 and today manages net assets of approximately $6 billion across a diversified range of products. The Cheyne group currently employs approximately 170 people with its primary offices in London, New York, and Bermuda.
Cuba reports cigar up 2 percent last year Cuba reports cigar up 2 percent last year By ANDREA RODRIGUEZ The Associated Press Updated Feb 21, 2011 01:24PM MDT Havana • The exclusive seller and exporter of Cuban cigars said Monday that of the island’s coveted smoked rose 2 percent in 2010, rebounding slightly after falling for two straight years amid the global economical crisis. Total were $ 368 million last year, Habanos … Read more on
Honduras law lets police be called on home smokers The last refuge is vanishing for besieged smokers — at least in Honduras. Read more on
Cuba to host international cigar festival Havana, Feb 20 (IANS) Cigar lovers will now get a chance to see how the celebrated Cuban cigars are being made as the organisers of the international cigar festival, which begins here Monday, plan tours for the visitors to the factories and tobacco growing areas in the country. Read more on
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Somerset park commission may table cigar proposal BRIDGEWATER — The governing board of the Somerset County Park Commission could table a proposal to sell cigars at five golf courses managed by the agency, its president said Thursday.
The cut throat competition insists each and every business to take advantage of Internet technology. Following the same, food industry is also stepping forward with Online Food Ordering System. The system is just like a secret recipe for restaurants to boost up their revenues. A website is provided to the restaurants, managed and maintained by the service providers, where menus can be uploaded online so that customers can have an online access to the necessary details about the cuisines offered by restaurants. With a few mouse clicks, customers can food online, reserve a seat or plan a party in their favorite restaurant.
Since life has become fast and people have become more internet savvy, online food ordering has proven to be a convenient and effective way to get food at home/office without any need to go outside. Food can be ordered at any time from any location, all that is required is a PC with internet connection. The system is quite easy to set up and requires no hosting or installation. In comparison with phone ordering, which is the main alternative, online ordering is quicker and easier so customers favor it once they know and trust it. They are not only provided a direct access to online menus, in fact a freedom from annoying phone/brochure based ordering.
When it comes to restaurant , online food ordering system proves to be an efficient medium to increase and sky rocket the revenues. The system generates live reports and online statistics to keep a track on graph. It helps restaurateurs in decision making about marketing and promotion programs for their restaurant business. The system also provides a platform for online promotion through gift certificates, electronic coupons and so on. Customers are allowed to pay through various payment gateways such as pay pal, pay upon delivery/pick up etc. making it a cakewalk for restaurateurs to handle larger volume of transactions.
Restaurateurs who want to raise their graph with lowering costs and a wider customer attention can adopt online food ordering system as a fruitful strategy. Moreover researches have shown that once people start ordering food online they like to more food, more frequently. This can increase restaurant turnover and needs to be exploited.
MeroSys, the trusted name in , was designed specifically for the restaurant industry to allow restaurants and cafes to display their menus online. MeroSys is completely customizable, unlike other online food ordering systems. Visit our website: to see a complete online demo.