Distribution organizes the meeting between a good, product, service offer and demand. For most transactions, this meeting takes place in department stores, a privileged physical location.
It is structured around four main topics:
- It is necessary to increase its size, which is a necessary condition to better exploit economies of scale. This necessity finds its limits today. Short-term factors such as laws, regulatory restrictions enable regulation.
On the one hand, it is made possible by central purchasing bodies. It allows small stores to take advantage of some of the economies of scale achieved as a group.
It forces sales into losses, rather than longer-term trends like pooling effects. On the other hand, big brands need to diversify for service sales.
— Offer as many products as possible for a single purpose and ensure the most regular supply possible.
It is necessary to maximize the presence indicators on the shelves. This structures the relationship between central purchasing and suppliers above the store through SEO procedures.
— It is necessary to attract as many consumers as possible with low prices and the assurance of finding everything they need.
Suppose that more than 85% of households now visit supermarkets. This approach now takes the form of increasing competition to seize new market shares.
- Provides minimal service on behalf of the founding idea of “goods sells itself”. This does not exclude the development of certain services in the background, which differs significantly from country to country.
The meeting between simultaneously evolving supply and demand is appropriate. But ultimately it steers around the catalog with pretty similar topics.
It is necessary to distribute these catalogs as much as possible, to increase the variety of offers for clearly identifiable branded products. And therefore, it is likely to be purchased remotely.
The development of this distribution in volume can only be made by creating demand adjusted to this strategy of maximizing throughput and minimizing prices.
The co-production of demand corresponding to mass consumption therefore relied on innovations such as branded products and display of prices, shop side and staging of supply.
Mass selling products means promoting them to as many people as possible, while also establishing a consumer preference for that product.
In this type of setting, the visibility of the offer with products that are well characterized by their brand and overall price is important.
It enables a consumer figure with a fixed set of preferences. The opposite is also true. This dichotomy is central to the simultaneous development of two-face marketing.
On the information side, statistical analyzes are applied that lead to segmentation of consumer behavior and individual preferences.
Manipulatively, based on the mass media, it tries to build the desire for the product by focusing on those relevant characteristics that make up the brand and the prices. (Therefore, to balance the consumer's individual preference)
This model of mass distribution and regulation of consumption must have an anthropological or sociological side. Central tension is the adaptation of preference to the product and vice versa.
However, this tension should be regarded as ideally objectifiable characteristics of both products and consumers. For this, the co-production of a sufficiently stable pair of product quality and consumer preference occurs dynamically.
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In this model, the relationship with the consumer has three basic features. It is an intermittent, distant and indirect relationship, and ultimately largely impersonal.
There are various loyalty efforts made by distributors (loyalty cards, promotional campaigns in the press, etc.).
The fact that department managers are in only occasional contact with the customer has a negative impact.
Thus, consumer behavior is only reflected collectively through various indicators based on turnover, all generated by department, product, square meters or hours of staff worked.
The department manager evaluates the behavior and preferences of consumers. He speaks to professionals higher up the supply chain on their behalf.
That's why customization is also very limited. Because mass distribution caters to the general or specific needs of the average consumer. Here, too, several nuances should be included. For example, the development of loyalty cards, etc.
As long as per-household tracks and histories are created, mail order distance is less and personalization is more.
But the range remains one that mailers try to fill with more targeted mailings, due to the seasonality of catalogs.
This is the shortest way we can define the classic retail model.
Dr.Yaşam Ayavefe
