Is it as simple as being innovative?
by Robert Myers
Retailers globally are being challenged by web based retailers such as Amazon (B2B) and Ebay (C2C) whom have tremendous economies of scale and buying power. Even the most successful brick and mortar retailers are concerned and desperately trying to compete in the web based B2C market. Their problems are compounded by fact that many manufactures are now also selling their goods direct to customers online, often eliminating retailers all together. Due to these web based companies sheer size and volumes they are also able to offer customers free shipping and returns thus leveling the playing field with traditional brick and mortar retailers.
As has been stated publicly on several occasions, Bahamian retailers are not solely responsible for the decline of the retail industry, the problem also lies with systemic governments that are neither knowledgeable or responsive to global trends, market conditions and the ease and cost of doing business. As global retail became web based and the transportation of goods became highly competitive, the private sector and a concerned business friendly government should have significantly reduced or eliminated customs duties on many retail items in order to keep the retail industry alive. Specifically, clothing and apparel retail have some of the greatest challenges, as they are not only disadvantaged by the fact that they has a seasonal and fashionable shelf lives, but goods are all too often bought back in consumers suitcases with no duty being paid. There is simply no way that Bahamian retailers can ever compete with these factors and nor is there any way for Bahamas Customs to determine new from used clothing and apparel.
Last but not least, is the growth of the informal retail economy, largely due to the fact that the legitimate retail industry has been made noncompetitive by the aforementioned conditions, and that illegal businesses are cheating Customs, not paying business license, not paying NIB and the government fails to enforce the rule of law and shut them down. These local conditions have decimated local retail. Many sectors of the retail industry will continue to die a slow death until the people with a vested interest in the economy start acting proactively.
One can easily argue that it is not the Bahamian retailers alone that must become more innovative and competitive, but also the Bahamas Government. Ultimately, the focus must remain on growing the Bahamian economy as this is the only salvation. Careful analysis of the retail industry is desperately needed, and long overdue, so as to determine how best to grow the sector and support local retail employment and business as opposed to foreign.
