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"Internet is not just a sales channel, but also a differentiation tool"

VICTOR VALENCIA, MANAGER AT NEUTRAL GROUP

  • Key4Communications
23/05/2012

Victor Valencia is a regular contributor to Ediciones Just magazines, where he exposes his management ideas oriented to points of sale, helping them to grow and to maintain their independence, as well as to innovate and differentiate themselves. Valencia also offers these solutions through his management company Neutral Group.

In Spain and in Europe, consumption and retail are going through a complicated situation. What kind of tools can retailers use to deal with this situation?
It is clear that trade models that do not have a clear vocation for innovation in their business concept have completed their cycle, and this certainly makes sense because the concept of society that was designed for traditional commerce has changed its rules.

Today society is under different guidelines and not all trade has managed to understand this. We are not living times of changes, but starting a whole new era.

My proposals for retailers are:

First, innovation as a key issue: we have to move from the concepts of product or service to "serviduct", which is a service and product mix to increase added value for customers.

The second tool to develop is client management, which is not just about selling, but it is addressed to manage the customer's environment so that we find a much wider market and receptive market.

The other tools are complementary and, combined with the previous two, can do much to enhance them. These are management tools such as pricing, the capitalization of business value (there is no need to go public to raise cash: there are many other systems), and dynamization of point of sales (and promotions are not the only form).

It is not necessary to make a radical change overnight, but retailers need to be more professional in areas that until now many have not even thought about. It is time to be more entrepreneurs and strategists as there are market opportunities to grow, although in different ways as it has been done so far.

It seems that the trend in retailing goes through concentration. How can a retailer keep its independence?
From my own experience, I know that there are many ways for retailers to associate, but so far I've only found one way that fully convinces me, and is one that I am applying to a retailer's group that I am creating. It is a group of "synergies". In one such group, the independence of each retailer is full ensured: there are shared goals, means, services, training, information, strategies, advisers, but there is not any requirement to buy from anyone, or to work under the same corporate image. The association offers all the advantages of large groups without losing one's own identity.

What is your opinion about the future of electronic commerce?
E-commerce in Spain will follow the same pattern as in the US: 90% of purchases are made in the stores' sites and the most online purchases are done by far by retired people. It is very difficult to buy to you don't know who, you don't know where and you don't know what, and this means that the Internet is an important tool for brick-and-mortar stores and that its greatest value is its proximity and people's knowledge of the brand. Internet is not just a sales channel, but also a differentiation tool.

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