The author of this article looks into demand and delivery services in an auto-part retail store, and how they relate to the amount of revenue gained by the store. Furthermore, the author looks into factors relating to supply and demand and how they can be worked out to increase the revenue of the store without affecting customer loyalty. Therefore, the author brings out major changes that a store can do to overcome the challenges of increasing revenue, and, at the same time, giving its customers better and quality services. The author gives concrete and elaborate findings that if an auto-part retail shop adopted an area-based delivery strategy, the store would be able to improve on its efficiency, and, at the same time, bring a match between the revenue generated from a sale to a specific customer and the trips made to the said customer.
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The article gives concrete arguments. However, there are some concepts in the arguments that are not refutable. A retail store, as argued, comprises of customers, distribution centres, and a bridge between the two, which in this case, transport. Irrefutable. Therefore, it is important that all of these three aspects of a retail store be considered when analyzing and coming up with conclusive support for the arguments, and the author has effectively considered all the above in the arguments given. The use of a Geographic Information System, commonly referred to as GIS, is very important in determining the viability of a certain customer in relation to locality and sales with respect to the nearest distribution centre. For example, Supercheap Auto, in their website, have established or created an area where you can input your data, and the GIS will locate the nearest store from where you can place your order. This will not only reduce the cost of transportation but also the time required to deliver the product, thus boosting on revenue generated without compromising on customer loyalty.
On the demand analysis, the authors pose the question, “are all customers equal, or are some more equal than others”? According to business ethics, all customers should be treated equally regardless of the number of sales a store makes towards them. However, in as much as all customers should be given equal treatment, there are repercussions involved. These repercussions should be considered where prioritizing your customer based on the revenue they bring to the store. Therefore, it will be prudent to go against the general business rule and consider some customers more important than others as long the revenue generated through this set of customers is agreeable. Therefore, in this contest, it does not matter where the customer is located from the point of sale as long as the revenue generated can cater for the delivery cost and still retain maximum profitability. As a matter of fact, the demand analysis discussed counters the general aspect of the spatial model as stipulated by the author. However, he gives a conclusion that there are customers who should be considered more important gauging on the revenue they generate into the store.
On service delivery analysis, it was evident that stores incur reduced revenue as a result of delivering products to customers who are based in widely spread and large areas and have low sales. However, the conclusion of ignoring this client is not the answer to the underlying problem and goes against the protocols of any business. Businesses need to expand, therefore, the solution will be to link these customers together and deliver the goods at a specific date prior to each making their individual orders. On the other hand, service given to the customer should be of high quality and does not exclude delivery time. Therefore, if a store finds out that it is experiencing an influx of demand from a certain region, the best way to counter it without affecting its revenue is to open a new store at a location that will best serve the whole region with minimum distance travelled. The author has clearly explained how this is done and how effective it is, through his service usage analysis passage. Additionally, the implementation of a website such as that implemented by major auto-parts stores like Supercheap Auto, Repco and Autobarn which have incorporated a store locator will play a great role in using the closet store to deliver goods to the customer.
It is important for a store to do a thorough survey on its market before opening new stores, to eliminate the issue of distributing centres of the same store from competing for the same customers. Therefore, based on the market area analysis, it is important to set up a distribution centre that can serve more than 80% of its clientele at a distance of not more than 15 minutes drive. However, in this part, it will be unwise for the store to close a distributing centre just because it is within another centres range, as most customers usually pop-in to the nearest store. As a matter of fact, this will result in loss of revenue for the store.
The passage in the article brings out a clear picture of what should be done, and based on the argument of the author; it will be prudent for an auto-part store to follow the direction of each passage if it were to increase the revenue it generates.