Classification and retail positioning into strategic groups

Abstract

PurposeTo understand the potential for various types of retailers, it is essential to appreciate retailer' positioning in the marketplace. Positioning has a critical effect on retailers' competitiveness and performance. Despite the significance and popularity of retail positioning, a few gaps remain that prompt the need for this research. First, little has been written about positioning in the building materials distribution industry, as compared with other retail sectors. Second, the retail classification literature has rarely included positioning as a dimension of retailer characteristics, although, in essence, they are both ways to understand retailer strategy and behaviour. To fill these research gaps, the objective of this research is to contribute to retail positioning research, using the Swedish building material distribution industry as a study setting. Specifically, it has two key goals: to develop a classification framework focusing on the Swedish building material distribution market; and to analyse those distributors by strategic groups and identify their common business priorities.Design/methodology/approachThis research looked at a majority of building material distributors in the Swedish market. A total of 23 interviews were conducted with managing directors or similar from case companies. Interviews ranged from 40 to 90 minutes in duration. This research adapted materials developed for other purposes in order to enhance and strengthen primary data.FindingsThis study develops a classification framework of building material distributors and provides an overview of distributors operating in the Swedish markets. Drawing on theory from retail positioning and classification, the research result suggests that the studied distributors can be classified into three strategic groups: DIY‐service focused; DIY‐cost focused; and builders' merchant (BM)‐service focused. Research also showed that distinguishing building material distributor by customer type is not as effective as it once was; there is a trend of internationalisation in the Swedish building material distribution industry; and distributors exert growing central control over certain areas, such as purchasing and marketing.Originality/valueThe building material distribution industry attracts little research attention when compared to other sectors, for instance food and grocery retailing. Given this, the value of this article lies in identifying the leading companies in Sweden and offering strategic analysis of their business developments and focus. Insights into building material distributors' supply requirements are provided.