Week 2: The Questionable Futures Facing Retailers

This week we read an article about Sears Holding, which was very interesting to me. The article talked about how Sears companies spent too much money fixing up their stores and spend too much time worrying about sales growth, but not enough about profitability. However, I disagree with Sears business approach. I haven't been to a Kmart or a Sears in a long time.  This is because the last time I went to either all I can recall is how dirty the stores were.  The decor and shelves were so outdated it made everything in the store look super unappealing. Even if there are good sales I can't bring myself to go into either store because of how unclean they are.  The company really needs to think about focusing on consumers needs and presentation of the stores.  Maybe if the stores had better up keep then more clientele would feel like returning.  The company needs to re-evaluate themselves as a company and focus on their target market and most loyal customers in hopes of gaining more profitability.  Otherwise, the company is going to just keep closing more stores. 

Another point that we touched on in class was comp store sales.  These are same store sales that are compared from one year to the next.  Sears Holding ended up closing over 120 stores for poor comp sales.  If stores continuously experience negative or same sales then the store will struggle to make a profit over time. This effects the stores profits, store stocks, and the companies ability to pay off expenses.  In class we discussed that one way to improve comp store sales was for the store to sell something that it doesn't normally sell.  This makes it convenient for shoppers because they do not have to make a second trip to another store to get different items because they are now offered at the current store.  This also provides a new product income that the store didn't have before.  This could hopefully provide more sales for the store and increase overall revenue.

 

Week 1: Retailers in Trouble

It has become apparent in the economies recent years that retailers have been forced to transition their business to fit the changing needs of the consumers.  After the recession most retailers began to decline in sales due to a number of reasons but primarily due to poor business strategies and prices being to high for consumers. 

Current retailers are finding it difficult to compete with retailers such as warehouse club retailers such as Walmart and Target.  These retailers seem to prosper more than others because they pride themselves on  "one-stop-shopping." Since most people are short on time they enjoy the idea of being able to get everything they need in one stop.  Retailers such as Walmart and Target have all departments such as produce/grocery, cosmetics, clothes (for everyone in the family), electronics, houseware, etc.  Having everything in one location for a cheaper price is what is attracting consumers more than anything in today's economy.  Harsher times call for tighter budgeting and that is what brings people to stores such as Walmart and Target.

As the new year begins certain retailers are being forced to adapt and change with the times.  One retailer in particular is Kelloggs Cereals.  Kelloggs announced that they will most likely be pulling cereals such as Corn Pops.  Competitors are promoting healthier cereals in hopes to decrease childhood obesity as well as obesity in adults.  Kelloggs realizes that majority of its cereal is not as healthy as emerging competitors and has been forced to recall some cereals and try to create newer and healthier ones.

Week 1: Types of Retailers

After beginning to explore retailing I was surprised by how many different types of retailers there are. I always just thought of retail as purely stores providing goods to customers.  In reality, different retailers are created to address different target markets.  Places of retail can be examined and compared by different fields such as size, variety, accessibility, price, etc.  All of these elements are crucial in comparing and contrasting different retailers.  By being able to compare and contrast the retailers one is able to figure out who a store's competitors are.  It also allows business prospects to open different types of retail depending on which market has the most demand and room for growth.