A Study On Evolutionary Mechanism And Innovation Strategies Of Retail Enterprises Profit Model

In recent years, retailers charge fees from suppliers has intensified, that leads the contradictions between retailers and suppliers more and more frequently. How to understand the nature of the fees, as well as how to solve the increasingly tense of the relationship has become a key issue at home and abroad. There are many points about these at home and abroad, many scholars at home and abroad based on channel theory argues that the reason of large retailers can get profit from suppliers is its influence on the market. Through the study we find that charging fees from supplier is a part of the retailer’s profit sources, it is very hard to explain the nature and essence if we study the fees separately. So, we explore the fees by studying the profit structure of the retailers.The barriers to entry of the retail industry is lower than others, on the contrary, the barriers to abort is higher than others. Because of this, the retail enterprises are facing disorderly competition environment. If retailers increase the price they will face the embarrassment situation of the loss of a large number of consumers. So, the retailers have to get profit from other ways. So the fees generates based on this kind of market environment. In this paper, we use case study method to explore the theory. Through the interviews of DaShang Group, we find that if the retailers get lower profit by selling the products they will charge higher slotting allowances from the suppliers. This support the point of view we have argued, that the shelves as core resources of the retailers, every unit shelves pursuit same profits. Through the interviews of DaShang we also find that "the approach of fair trade between the retailers and suppliers " to retailers has its limitation, because retailers can use other ways to make up for the loss. Ultimately we get the profit model of retail enterprises’evolutionary mechanism.At the same time, we also find that retailers can’t achieve the Pareto optimality if they only considered themselves. The relationship between retailers and suppliers is inefficient and unstable, which lead the conflict breakout frequently. This makes the innovation of the profit model become an inevitable trend. Retailers should establish the benefit-risk sharing mechanism to replace confrontation and conflict. In the last, we propose several innovation strategies, and make policy and recommendations for government departments.