Comment: Product exclusivity breeds success in the world of retail

While M&S’s reluctance to launch a full online food shopping offer perplexes some, the success of its bricks-and-mortar food stores provides a masterclass in how shops can thrive even as ecommerce grows.

The reasons for its appeal comprise a menu of tasty retail staples including innovation and freshness in convenient locations, such as its growing network of Simply Food stores. But as well as product quality one thing stands out: exclusivity.

Whether in food or general merchandise, online retailers have made inroads wherever products are sold in common across chains. Product exclusivity provides not just a defensive position but the ammo to go on the offensive.

Successes show exclusivity is a feature frequently shared. Next and John Lewis, for instance, sell many goods not widely available elsewhere. In food, sales of Sainsbury’s own-brand are growing at twice the rate of branded lines.

In contrast, retailers of brands more widely available must find ways of making themselves the shopper’s choice as etailers attack. Dixons has done a good job, partly through exclusivity deals with suppliers keen to have their product explained and showcased in impressive stores.

Exclusivity can be an ecommerce differentiator online just as much as in store, and the hope must be that M&S eventually finds a model to sell food online. But its foodie success shows that physical space can still generate sales and profits when everything is done right.

B&M mulls float

B&M is the latest retailer thought to be considering an IPO, testament to the retail verve of the Arora family who built the business. However, it’s only a year since private equity house Clayton Dubilier & Rice took a controlling stake.

As with Bonmarché, which is listing on AIM, B&M will need to demonstrate that, impressive as its growth has been, it is not simply a private equity quick flip.