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Market Saturation Is For Losers

Quoting "market saturation" as a main incentive, Dallas-based tech retailer CompUSA Inc. recently announced plans to close 126 stores over the next few months. Correct me if I'm wrong, but seems you only hear the words "market saturation" from companies that are losing the competitive race (with the possible exception of that self-saturating entity known as Wal-Mart). In related news, CompUSA competitor Circuit City made a similar announcement late last year, closing 70 stores nationwide in an attempt to staunch the flow of red ink on the balance sheets.

Both of these tech-oriented store chains are suffering from a number of market pressures, not least among them the industry trend towards online sales of customized product spearheaded by Michael Dell and adopted by HP, IBM and others. The Dell online-only business model has proven remarkably successful, and although that runaway success is pushing the PC market toward its own saturation point, that's a matter for another time.

Point is, are these big box retailers your customers? Does a company like CompUSA, still struggling to operate a brick/mortar business in an increasingly online-friendly market, remind you of customers you have (or have lost)? Is a significant portion of your sales transacted online, and is that percentage on the increase? If you answered yes, and you're not taking a hard look at your current customer base and considering all your sales options, you may have an unwanted brush with some "market saturation" of your own to contend with.

TAGS: Innovation
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