Retail Change Theories Sample

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Retail Change Theories Sample


The recent global changes in the global finances have had a massive impact on the economies and businesses all around the world. Adversities of the fallout of the economies are felt by the wide sectors of business. Right from the sector of finances, the pestilence then poses implications on the retail industry and the latter affects several downstream businesses that owe the viability of a business to convenient access to cheap credit that features the pre-crisis environment of a macro economy of the developed world. Comet Group Limited was a retail chain that dealt with products of consumer electronics and white goods including products and services. It also initiated the concept of the outstation discount warehouse in the United Kingdom.

The company first began as a business that helped charge batteries for its wireless radio customers regularly. The company had a fleet of delivery vans that delivered recharged batteries to its customers and was operational in Dock Street, Hull. The Comet gradually developed and expanded to become a listed company.

The business of the company grew to provide the customers with Comet Radio Services. Comet was an initiator in the sector of out-of-town retail stores. The company also sold radios and televisions which brought it a huge success. The company also had huge competition from several competitors in the market who were growing companies who were providing electrical goods and services. Comet had also achieved the status of being a publicly traded company that had its shares for sale in the business.

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The Reason behind the Failure of Comet

According to the research, it is noted that the failure of Comet was basically due to the unsound structure that it had. The company also did not invest in online technology which was necessary in the era of advancement of technology when the whole world was undergoing globalization. It can be stated that the fiscal condition of Comet was less efficient. The involvement of venture capitalist, OpCapita was also extinguished utterly. The profit of Comet before tax decreased from 56 million pounds to 25 million pounds. In its consecutive years, it suffered losses of around 8 million pounds, 3 million pounds, and 39 million pounds in the year 2011.  The company also faced similar losses in the next year.

The turnover for the company was at its peak in the year 2008 at a fraction of over 2 billion pounds which reduced dramatically to 1.2 billion pounds in the year 2012.  The suppliers along with insurers were worried that Coface happened to be the first company to lower the level of coverage that it provided while others still did business with the retailing giant of various degrees.

Comet received credit and the debt regarding the trade suppliers which consisted of 109 million pounds. IT and electrical retailers faced challenging times but when the levels of service dropped and consumers stayed away or got street savvy and avoided tenacious selling of expensive and extended warranties which appeared like major blows that severely damaged the retailer, more by the added pressure to minimize the costs by laying off the staff and restructuring the stores.

The additional income of Comet came from its financial services, rents receivable, and extended warranty commissions which were calculated to direct sales separately. These incomes declined intensively from a standard of 54 million pounds in the year 2008 to 185,000 pounds in 2011 which was a struggling period for the company.

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Theory of the Retail Change

To understand the retail change that led to the shutting down of Comet as a retail company, a general theory of the retail change is required. To provide this comprehension regarding the theory of retail change, the concept of retail change has to be clear. As per Brynjolfsson, Hu & Rahman, retail change can be regarded as the retail revolution which includes the emergence of innovative retail format or a new process of business in retail. It can also be considered as retail evolution which would include the spreading of an innovative new format of retail or new process for retail in the market (Brynjolfsson, Hu & Rahman, 2013).

Therefore, retail change can be considered as an alternative experience about retail evolution and revolution. During the retail revolution period of Comet, a completely new format of retail had to emerge and had to be accepted by the market. On the other hand, Cameron & Green during the period of retail evolution, Comet should have incorporated a new retail format that had to be gradually promoted and diversified into various modes by the company.  Thus, the development of the tracks of retailing would have traced the retail revolution followed by retail evolution for the company which would have saved the company (Cameron & Green, 2015).

Comet as a retail institution is supposed to be referred to the basic format of retail and its distribution in the market. The wheel of retailing theory is the most dominant concept that can be applied to the case of a retailer like Comet. According to this theory, Comet had to enter the market at a meager price, operators of low margin and service who could have eventually traded up after maturing. This would have made the operators vulnerable to Comet, and the same pattern would have been repeated (Wrigley & Lowe, 2014).

The wheel of retailing is constantly rotating and revolving, in some cases slowly while in some cases very rapidly. However, the wheel of retiling is never still. According to the Three Wheels retaining which is the improvisation of the wheel of retailing describes that the issues between the Three Wheels which are innovators that are low order, conventional stores, and stores of high order had driven the change in the retail Comet. As per (Che & Song, 2015), the wheel of retailing has three phases.


Phase One includes the combination of the overheads and low prices that had to be followed by Comet. Comet also worked on trading up, i.e., increasing both the qualities and prices which are the second phase of the wheel. Retail also should have taken care of the services and increased costs which left it vulnerable to failure (Cameron & Green, 2015).

The Accordion Theory is significant in the case of Comet as the retail change follows from offering many categories in the electrical products with limited assortments to making offers of limited categories along with having a wider range of assortments in the products of Comet. The contraction and expansion of the acts that are offered could have acted as the accordion (Dunne, Lusch & Carver, 2013). Multiple accordions were operational at the time of business implementation of Comet and it is retail management that could have caused the movement. The change in the retailing of Comet had to follow a “general-specific- general cycle”.  The consumers were supposed to be served by the general shops more than the specialty shops and again repeating back to the general type of retail of Comet.

The historical approach regarding the retailing of Comet provides attempts to develop an approach that is synthetic for the marketing models to explain the retail change. As per Fernie, Fernie & Moore, a historical approach to the comprehension of the traditional retail change is effective in the analysis of the changes in the model of retail marketing of Comet. The environmental factors played an important factor in the failure of Comet which would be better analyzed with comparative studies (Fernie, Fernie & Moore, 2015).

Other than the above theories, other relevant studies can help analyze the failure of Comet as a retail company. The theory of environmental diminishing also provides a model for the structural change in the retail systems of Comet and asserts that the level of specialization in retail is a function of the economics of the environment. The retail changes for Comet can be explained through two main kinds of competition, disruptive and normal.

According to Grewal & Guha, inspired by the considerable efforts that are made in the context of retail changes and the failure of Comet as a retail chain, none of the theories that are developed can be regarded as controversial and none of the theories have the potential to provide an adequate explanation about the retail change in the real world. There has been an insignificant development of the growth of a general theory associated with retail change. In the context of the failure of the retail chain, Comet, all the existing theories regarding the retail change can be described as the descriptions of the past instead of serving as the frameworks regarding the concepts for the future (Grewal & Guha, 2017).

It can also be stated that all the retail change theories are not applicable and have flaws in two aspects. One of the flaws is that they assume the retail change to be only influenced by the internal forces of retailing which also includes institutional theories that appear only from the perspective of the retailer which is Comet in this case and at the same time ignore the implications if the consumers, suppliers, and whole chain of supply or assuming that the retail change is only affected by an external factor.

It can also be stated that Comet could have integrated retail change by both external and internal forces. It was not the retail management alone that caused Comet to change. Other factors that also had a significant role in the retail change are the demands of the consumers (Gümüş, Kaminsky & Mathur, 2016). The importance of development and innovation of information technology and the demands of the convenience of the customers rather than the management of the retail played a very important role.

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Analysis of the Failure of Comet

The analysis of the failure of Comet as a retailer includes the whole process of retail in a combination of internal and external forces instead of separating. The second issue is regarding all the past studies that are based on the free market economy which implies that the theories derived from the free market economies would fail to describe the change in various other economic systems like the retail change in the UK market for Comet or any economy that is transitional (Marzband, et al., 2016).

This further resulted in a strong influence including the domination of the retail change of Comet. The government of the UK has a significant role in the regulation of the retail industry which results in making the UK market a strictly regulated market for retailers like Comet. It can be further stated that it is the forces of consumer demand, supplier, economic system, and technology that are incorporated together to cause retail to change. Moreover, the power of individual force varies in various markets. The demand of the customers can be considered as the most dynamic factor in a free market economy that always tends to drive in the retail change.

As per McCall & Gray, the motivation of Comet was to chase profit, especially higher than its competitors. The pressure from competition from the other retailers was considered to be driven by retail changes (McCall & Gray, 2014). Comet needed to be driven by the push and pull forces which would have given new ways to meet the demands of the customers in a much better way than its retailers. The retail change would have happened in the cases if Comet had successfully developed a competitive advantage over its competitors, and the new ways had been imitated by other players in the market. The repetition of the process would have made the retail changes move forward for Comet.

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The function of Comet as the retailer was to deliver, access, expertise, present, work on the post-sales activities, and undertake promotional activities for its future market. Comet also had to concentrate more on the enhancement of the shopping experience of the customers, engagement, and interaction with its customers, more hedonic in nature and high involvement in the market which would have provided much-needed retail change to keep the retail operational (Salgueiro & Erkip, 2014). Changes in the work patterns and behaviors of the customers are also one of important factors that have affected the business of Comet. Engaging in corporate social responsibilities could provide a competitive edge for Comet in the market by building an image in the consumer base.

As a retail company, Comet had to focus on the reselling of the premium items to the final customer at a competitive price and service which would have prevented it from shutting down. Implementing Omni-channels would have played a significant role in the strategy for the retail marketing for Comet in the UK market. The strategy of following the customers would have helped Comet in increasing sales and generate better revenue. The effectiveness of the business of Comet should not be analyzed based on the conventional financial bottom line, but also by the legal, social, or environmental performance according to the 3BL paradigm. Comets should have adopted a strategy of a sustainable retail supply chain that would have benefitted the retailer (Smelser, 2013).

According to research on the subject, it can be stated that there was a need for Comet to go for internationalization as there was a need to scale the business up. There was also saturation in the domestic market and there was the emergence of new geographic markets of liberalization for Comet. The need for economic integration was also very high at that time. The demands of the customers were also diversified. The resources that supported Comet were varied to meet the various demands in the market. The retail format structure of Comet had to be changed with changing market demand. However, many situations had the instance of one of the demands of the consumers to dominate the market for Comet. The economic system in the UK market which is a planned economy made the competition very limited.

The push and pull forces were very weak and could be considered to not exist at all. The essential demands of people in the UK market were difficult for Comet to meet. Chasing after maximizing competition and profit Comet was supposed to be the prime internal force that could push the retailer to trigger the retail change (Sorensen, 2016). On the other hand, changing the demand of the consumer was the major external force to pull Comet and initiate the retail change.

The retail change would have followed the change in the demands of the consumer. Meeting the demands of the customers effectively in the UK market would have increased the revenue of Comet irrespective of any retail change as the main causal factors that are associated with the retail change are the demands of the consumer, the impetus of the retailer for profit, resources, and competition that are developing the business of the retailer in fulfilling the demands of the consumer (Varley & Rafiq, 2014).

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The paper deals with the retail change theories that fail high-street retailers. The case of the shutting down of Comet in the market of the United Kingdom is discussed. The analysis of the failure of Comet has provided insights into the various s factors that affect the management and business of a retail company. A brief description of the theories of retail change is also highlighted in the context of Comet. The significance of different aspects and factors that affected the retail organization is illustrated for better comprehension of the subject.


Brynjolfsson, E., Hu, Y.J. and Rahman, M.S., 2013. Competing in the age of omnichannel retailing. MIT Sloan Management Review, 54(4), p.23.

Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools, and techniques of organizational change. Kogan Page Publishers.

Che, H. and Song, X., 2015. Study on Chinese Retail Format Development Based on Consumer Demand Theory. In Proceedings of 2014 1st International Conference on Industrial Economics and Industrial Security (pp. 83-90). Springer Berlin Heidelberg.

Dunne, P.M., Lusch, R.F. and Carver, J.R., 2013. Retailing. Cengage Learning.

Fernie, J., Fernie, S. and Moore, C., 2015. Principles of retailing. Routledge.

Grewal, D. and Guha, A., 2017. Special Session: Retailing and Pricing Cues. In Creating Marketing Magic and Innovative Future Marketing Trends (pp. 247-250). Springer, Cham.

Gümüş, M., Kaminsky, P. and Mathur, S., 2016. The impact of product substitution and retail capacity on the timing and depth of price promotions: theory and evidence. International Journal of Production Research54(7), pp.2108-2135.

Marzband, M., Javadi, M., Domínguez-García, J.L. and Moghaddam, M.M., 2016. Non-cooperative game theory-based energy management systems for energy districts in the retail market considering DER uncertainties. IET Generation, Transmission & Distribution10(12), pp.2999-3009.

McCall, V. and Gray, C., 2014. Museums and the ‘new museology’: theory, practice, and organizational change. Museum Management and Curatorship29(1), pp.19-35.

Salgueiro, T.B. and Erkip, F., 2014. Retail planning and urban resilience introduction to the special issue. Cities, 36(SI), pp.107-111.

Smelser, N.J., 2013. Social change in the Industrial Revolution: An application of theory to the British cotton industry. Routledge.

Sorensen, H., 2016. Inside the mind of the shopper: The science of retailing. FT Press.

Varley, R. and Rafiq, M., 2014. Principles of retailing. Palgrave Macmillan.

Wrigley, N. and Lowe, M., 2014. Reading retail: A geographical perspective on retailing and consumption spaces. Routledge.

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