Marketing Strategy, TRENDS IN RETAILING

Article: TRENDS IN RETAILING

Consider the following trends in food and nonfood retailing.

Nonfood Retailing

  1. Moving away from the middle. Retailers are offering a more upscale experience. Macy’s locations are getting a face-lift and image advertising. Bath & Body Works is transforming into an affordable beauty boutique. High-end retailers such as Saks, Neiman’s, Cole Hand, and Coach are clearly positioned to offer self-expressive benefits. At the same time, other retailers are moving down to compete with the discount stores. Discount stores such as TJ Maxx, Target, and outlet malls are becoming more important especially as consumers react to the recession.

2. Toward a better shopping lifestyle. Enclosed malls are in decline; they are being replaced by the “lifestyle center,” which is a combination of stores such as Pottery Barn, Barnes & Noble, Gap, Victoria’s Secret, and Williams-Sonoma, with open walkways and no department store. These are often in a revitalized urban setting.

3. Customers are looking and then buying where the price is lower. Retailers like Best Buy are simply showrooms for Amazon and others. Customers can scan the product code and instantly find and even buy the item over the Internet.

4. Faster fashion. The ability of retailers such as Zara, H&M, Forever 21, Target’s Go International, and Uniclo to capture in-season trends by a fast-turnaround design and manufacturing cycle means that their stores are dynamic and interesting with new items flowing through.

Food Retailing

5. Private-label strength. Private-label goods continue to grow at a steady rate. The private-label brands such as Safeway’s “S” and Wal-Mart’s Super Value offer exceptional price savings and tend to thrive in categories that don’t see a lot of innovation. The high-end private label brands such as Safeway Select often become competitive in terms of quality and even innovation while still offering lower prices

6. In-store media. Retailers are finding that conventional media are less effective and are going to in-store media including displays on shopping carts, couponing at the product site, and individualized couponing.

7. Organic offerings. Organic food, one of the success factors of Whole Foods, is going mainstream. Safeway’s O Organics are sold outside Safeway, and Target’s Archer Farms is adding energy to Target. But natural is being used more because organic sounds expensive.

8. Convenience redefined. Canned soup, frozen dinners, cereal, cake mixes, and instant potatoes are no longer convenient enough. People want items with little or no preparation, items like open-and-eat snacks and yogurt.

Discussion Questions:

  1. What is driving each of these trends? Which are supported by underlying consumer trends? Identify them.
  2. Which three trends will be around in five years? How would you forecast the probability that the trend will persist for that long?
  3. What are the top two threats and opportunities represented by these trends for Macy’s, Levi Straus, Safeway, and General Mills?
  4. When might a retailer consider going against the trend?
  5. Another potential trend is the return to a store’s roots. Several retailers, such as Gap and Saks, lost core customers by attempting to appeal to younger buyers. As a result, they are now attempting to return to their roots and deliver the classic fashions that made them attractive to their now not-so-young customers. What possessed them to go trendy in the first place? Can they recapture the customers that they have alienated?

TASK:

Read “Trends in Retailing” on pages 103-104 in the course text.

Search for recent articles describing the trends discussed:

1. For each of five of the eight trends listed, find a recent article that discusses a business and describes how it has adopted this strategy.

2. Discuss each of the five articles describing how the trend impacts the strategic marketing initiative of the firms. Consider the For Discussion questions on page 104 in preparing your response.

3. Cite the source and the edition that you have referred to for this assignment.

Deliverables and format:

Submit your answer in a Microsoft Word document.

Length: 5 pages

Font: Courier or New Times Roman: 12

Line Spacing: Double

Reference: Aaker, David A. Strategic Market Management, 10th Edition. Wiley, 2013-10-11. VitalBook file.