Case Study 1

Case Study 1

Background and Historical Context

A popular UK based retail store has gone through multiple ownership changes and still ended in closure

The Path to Administration

Last year, this business faced a crisis, which led to its administration with:

  • Stores put up for sale
  • Multiple stores saved through acquisition
  • Some stores wasn’t saved
  • Thousands of jobs were affected

Analysis of Contributing Factors

1. Economic Pressures

The cost of living crisis has had a huge impact on customer’s behaviour:

  • Decrease in spending on home improvements
  • Essential purchases only
  • Customer’s confidence in home improvement projects reduced
  • Millions of pounds lost during this crisis

2. Operational Challenges

Here are a few issues which aggravated the financial struggles:

  • Insufficient stock for seasonal demands
  • Product shortages:
    • Heating products
    • Storage products
    • Home improvement ranges
    • Cleaning supplies
  • The supply chain having a negative effect on product availability
  • Inflation

3. Market Competition Analysis

Success of competitors to reveal the main differences within the approach:

  • Company A’s Success Factors:
    • Effective stock management
    • Strong unique selling point
    • Multiple product ranges
  • Company B’s Strategy:
    • Competitive pricing model
    • Successful supply chain management
    • Strategic store positioning/ location

Digital Transformation Strategy

1. Online Transition Challenges

The change to become an online store presents various challenges:

  • No in person customer service
  • Limited opportunity to show physical products
  • Not having immediate access to expert advice 
  • Competition with established online stores

2. Employment Impact

  • Job losses across various locations
  • Loss of knowledge and expertise from employees
  • Impact on local communities- not being able to access something ‘same day’
  • Limited customer service

Alternative Strategies That Could Have Prevented Closure

1. Hybrid Retail Model

A balanced approach combining:

  • Reduced but still has a strategic physical presence
  • Increased online ability
  • Providing a click and collect service
  • Offering a virtual design consultation

2. Customer Experience

Focus on different factors:

  • Employee training
  • In person workshops and demos
  • Personalised design services
  • Customer loyalty schemes

3. Supply Chain Optimisation

Implementing a well built system for:

  • Real-time stock tracking
  • Predictive demand forecasting
  • Supplier relationships
  • Structured distribution network

Future Implications for Retail

This case study provides valuable insights into lessons learnt:

  • Adapting to the changes in customer behaviour
  • Having a balanced way of operating your business- in person and online
  • Keeping a physical presence in certain sectors
  • The importance of having a secure supply chain management

Recommendations

Key strategies include:

  1. Invest in a multichannel retail solution
  2. Maintain a good supplier relationship
  3. Concentrate on customer experience
  4. Create a flexible business model
  5. Build a digital infrastructure which still maintains a physical presence

Conclusion

This case study shows that while going digital is essential, the reduction of in person presence in certain sectors may not be what’s best for business. It’s about finding the right balance between being digital and adding the hands on experience that customers need.

Holly Davies 

H Davies Business Consultancy

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