Retail Disruptors: A book review by Bob Morris

Retail Disruptors: The Spectacular Rise and Impact of the Hard Discounters
Jan-Benedict Steenkamp with Laurens Sloot
KoganPage (October 2018)

With Laurens Sloot, Jan-Benedict Steenkamp lifts “the veil of secrecy covering hard discounters”

During an interview of Clayton Christensen, I asked him, “What exactly is disruptive innovation? There seems to be at least some confusion about it.”

“Quite true. It has a very specific meaning. It is not a breakthrough innovation that makes good products better. It has a very specific definition, and that is that it transforms a product that historically was so expensive and complicated that only a few people with a lot of money and a lot of skill had access to it. A disruptive innovation makes the product so much more affordable and acceptable that a much larger population has access to it.” I was reminded of that clarification as I began to read Retail Disruptors. The focus is on the hard discounter business model and the strategies followed by the key players and countries. “This sets the stage for the development of counterstrategies.” As one result, “incumbent retailers and brand manufacturers are anything but helpless. Indeed, some will actually profit from working with hard discounters.”

These are among the passages that caught my eye, also listed to suggest the scope of Steenkamp’s coverage:

o Ascendancy of hard discounters Pages 1-15)
o When is a preference for a limited assortment most likely? (24-25)
o The hard discounters model: managerial takeaways (34-35)
o Aldi — The inventor of the hard discount concept (39-44)

o Pillars of Aldi (42-44)
o The only firm that Aldi fears (44-48)
o Trader Joe’s — the upscale hard discounter (49-51)
o  Four major discounters: managerial takeaways (54-55)

o Key success factors of hard discount concept: managerial takeaways (72-73)
o Dollar/Dollar Tree (80-82)
o Hard discounter disruption in the grocery business (89-93)
o Characteristics of U.S. grocery market: managerial takeaways (94-95)

o How hard discounters create their own “blue ocean”: managerial takeaways (116)
o Four strategic reactions to hard discounter encroachment (120-127)
o Four competitive responses that conventional retailers can use: managerial takeaways (142-143)
o Four checklists for procurement savings: managerial takeaways (162-164)

o Building stronger national brands (167-198)
o Five imperatives for building stronger brands: managerial takeaways (193-196)
o Requirements for success for three types of companies: managerial takeaways (215-216)
o Key issues to consider during negotiations: managerial takeaways (230-231)

The business world today is more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can recall. Be that as it may, Jan-Benedict Steenkamp with Laurens Sloot take “a look into the future of disruptive retailing” in the final chapter. What they see is best revealed within the narrative, in context. However, no spoiler alert here, they remain convinced that hard discounters such as Aldi, Asda, Lidl, Morrisons, Sainsbury, and Tesco “are — and will remain — a permanent fixture in the grocery landscape. The ultimate winner is the consumer. And that is the right outcome in a competitive society.”

I agree and perhaps you do as well.


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