recent news

Last week some very interesting news from Kohl's was released. Kohl's 3Q earnings were released and they had a surprising 20% increase in profits. They also said that they expect sales to remain strong for the holiday season, which is key because thats where 4Q profits are made. In fact, they believe that their store sales are going to increase 2-4% for the holiday season, and profits to raise an additional 4-6%. This is great because their profits just rose 20%. "We expect our collection of powerful brands supported by significant marketing investments, especially in broadcast and digital media, to deliver a strong holiday season," Chief Executive Kevin Mansell said. 

Something very interesting that I found out in this article is that Kohl's is very "aggressive" when it comes to getting exclusive sales rights to a brand. Mansell said "an increased portion of private and exclusive brands and inventory controls helped boost gross margins, which edged up to 38.6% from 38.4% during the quarter."  Kohl's is also planning "significant marketing investments, especially in broadcast and digital media," to drive growth during the holiday season, Mansell said Thursday. 

Just like Target and Macy's, Kohl's is also going to be opening at 12am on Black Friday which is a key sales generator for these retailers. 


-Dow Jones news wire via E*Trade.com

Influential Leaders and how they have affected the Industry

Sales and services are important but influential leaders, such as company founders and CEO’s, are highly responsible for the success of major companies in the retail industry. Two very influential leaders in the industry over the past 20 years have been Jeffrey P. Bezos, Founder, President, CEO and Chairman of Amazon.com and Lee Scott, CEO of Wal-Mart Stores (“The Top 25: Retail Elites,” 2008). These leaders stand out because of their ability to influence the retail industry. For example, Bezos created the online retail giant Amazon.com that revolutionized the retail industry completely because it gave way to the e-commerce market. The e-commerce market changed completely the way buyers and sellers interact in the retail industry trough the web.

CEO of Wal-Mart from January 2000 to January 2009, Lee Scott, transformed Wal-Mart and therefore the retail industry completely. Under his leadership Wal-Mart became the largest retailer in the world based on revenue because of his understanding of consumers and focus on low prices (“The top 25: Retail Elites,” 2008). He transformed the retail industry because he focused on low prices and going global, which created a new trend and competitive landscape for the retail industry.

What makes these individuals influential leaders it’s their ability to see the bigger picture, instead of focusing only on the day-to-day details of the business, which take their businesses to the next level. Also, they stand out as influential leaders in this industry because of their ability to understand consumer needs and there ability to shape their business according to what consumers want before competitors find out. Their ability to find, understand and fill their consumer’s needs has been the key to their success.

The Top 25: Retail Elites - http://web.ebscohost.com/ehost/detail?sid=73aa0cbb-c7cd-4cf2-af83-710680b10a25%40sessionmgr11&vid=1&hid=8&bdata=JnNpdGU9ZWhvc3 QtbGl2ZQ%3d%3d#db=buh&AN=28380489

Current events with management

Leadership and Human resources play a key role in the retail industry and always are updating it's departments. Just about a month and a half ago, Wal-Mart Canada is the latest major retailer to install a new leader and gave the position to Shelley Broader who is a seasoned merchant. She replaced a man who was CEO of the regional team. She is planning new things for the company.

It is said that management in the retail industry is usually consisted of individuals who gain positions without attempting to, starting at the bottom and moving their way up.

Another news story is J.C. Penney is working and changing management. Penneys wants to bring in a new figure who is now in a chief position elsewhere and has worked prior to this for Apple Retail in 2000. He is now taken the job and will start working at the start of December.J.C. Penney is now stealing other high positioned managers and recently took the former Target Corp. marketer Michael Francis. The team is getting better for J.C. Penney at the cost of other companies.

The leaders at J.C. Penney explain that brands are important and these new leaders here are working with exclusive lines of designer goods. One of the Apple leaders now on the team with Penneys has built the Apple retail network. He did a great job so it expected that now with his position at J.C. Penney he will be doing wonders for them as well.

J.C. Penney has recently uncovered a line that is extremely popular, now moving into their store. Liz Claiborne and brands like Sephora are now building mini stores within J.C. Penney stores to sell goods. This was done by the former Chief executive. Clearly, as we see already, management and current events coincide and are booming at all times within various companies.

Mattioli, D. New Penney CEO is Tapping Former Apple Co-Workers. "The Wall Street Journal." November 10, 2011.

Strauss, M. Wal-Mart Names New Leader, Braces for Retail Battle. "The Global and Mail" Oct. 11 2011.

Workforce Trends

Q: What workforce trends is the industry experiencing?

In the retail industry, the key factor for supply and demand is competition and the availability of substitutes. Retailers are always looking to have some product differentiation in quality or price to put themselves ahead of their competitors. Lately, a workforce trend that has been occuring is a form of differentiation, but not necessarily in the products themselves. Retailers have begun to enter new markets to broaden the services they offer and their product mix.

Two companies that have recently attempted to enter new markets are Wal-Mart and Best Buy. Wal-Mart has been seeking to enter the pharmacy market and their mission is to "become the largest provider of primary health-care services in the nation" (Bustillo). They are seeking partners to open up new clinics and really become a force in the health-care business. This move could really increase Wal-Mart's profits by providing a whole new market to increase and grow in, however, they are far behind where they wanted to be by now in the pharmacy market. Competitors like CVS and Walgreens are still the go-to pharmacy for many consumers, and that poses a problem for Wal-Mart. Along the same lines, Best Buy has recently talked of entering a new market: on demand IT services. This cloud-IT field involves delivering software and computing power over the Internet and other networks. Best Buy recently agreed to pay $167 million for mindShift. Their main competitor at the moment is Dell, who has a partnership with Salesforce.com to deliver cloud services to small and medium sized businesses (Jarzemsky).

Initially, these moves by Wal-Mart and Best Buy seem to be good ideas- why not expand their businesses into new markets with opportunities for growth? However, it is not that simple to just enter a new market and become successful. Both companies entered markets with already extremely successful competitors and are now up against even more competition. If either one of them hopes to be successful in these new markets, they are going to have to come up with something that sets them apart. For example, Wal-Mart may try offering health care services for a lower price than those of CVS and Walgreens. Until they do something to push themselves ahead, they will continue to be beaten out by companies that have been in these markets for years already. People are not going to start going to Wal-Mart for health care services when they have been going to CVS for 10 years, unless there is something special and different about Wal-Mart's health care services.

http://online.wsj.com/article/SB10001424052970204358004577028081422859896.html
http://blogs.wsj.com/deals/2011/11/07/best-buy-jumping-into-crowded-cloud-it-field/

recent events

Retailers have been posting fairly good numbers for the month of october. However, several retailers have  fallen short of their goals and it has some analysts worried. Analysts predict consumer spending to raise by 2.8% for the month of november and december. Last year this number was projected to be 5.6%. In fact, analysts are saying that consumers are going to spend "4.6% less on gifts this year," and would average out to be 516$ 


"It's been a mixed bag so far," said John Long, retail strategist at Kurt Salmon. "That is due in part to location, given the October storm in the Northeast, and the fact we continue to suffer from high unemployment and a sluggish housing market."


Costco reported numbers this week and were basically in line with projections, in store sales were up 9%
This holiday season is going to be especially aggressive. Retailers such as amazon are setting up black friday deals. Wal-Mart has said that they are going to be offering especially competitive pricing this coming holiday season.


Another interesting fact is that maces, target, and kohl's are all going to be open at midnight for black Friday. This shows how competitive the retail business is going to be this holiday season. Furthermore, it means that every sale is important and that spending is probably going to be on the lighter side this holiday season. 

Dow Jones Newswire

Black Friday

A current event that is coming up very shortly that will have an effect on the retail industry is Black Friday. This event is the day after Thanksgiving- it is known as a day where companies hold record sales and release items in anticipation of the holiday season. Shoppers stay up all night and wait in lines for hours to get their hands on certain goods for holiday gifts, and to snag that sale to save money. While still in an uncertain economy, Black Friday sales may not be as high as usual, however, this day will continue it's trend as being a large and important day for retailers everywhere.

Although Black Friday is known for the large sales, it is still a day for an unusual profit to be brought in because of the large crowds of people purchasing these sale items. Basically, while stores will lower prices, they will still bring in lots of money because of the number of people. One of these companies looking to be open as much as possible on Black Friday is Kohl's. They will open at the earliest they ever have, opening doors at midnight on November 25, and stay open for 24 hours. Kohl's is following trends of Macy's and Target, who are also opening earlier this year than in the past. Companies traditionally opened very early in the morning, around 4 or 5 a.m. and stayed open through the night into the next day. However, stores are now opening even earlier than that to give themselves more time for sales. Some companies, such as Best Buy and Toys R Us, are not yet releasing the time they will open, although last year Toys R Us did not even wait until Black Friday and instead opened at 10 p.m. on Thanksgiving. All of these stores are huge hot spots for holiday shopping and are staying optimistic and expecting large sales increases this Black Friday, even in the midst of a bad economy.

http://online.wsj.com/article/SB10001424052970204528204577011401100429294.html

Area of the industry, which gives opportunity for easy entrepreneurial growth due to recent consumer trends: social e-commerce.

Area of the industry, which gives opportunity for easy entrepreneurial growth due to recent consumer trends: social e-commerce.

It seems as if consumers are spending more time online and less time in malls and shops. A major area of the retail industry in which there are opportunities for entrepreneurs and entrepreneurship is in the e-commerce area, specifically looking at social e-commerce. It seems as if retailers are trying to get customers to spend more than just time on Facebook. An article published in May 19,2011 in the Wall Street Journal, points out that e-commerce was responsible for 28% of retail sales in the first quarter of that year. Company’s like J.C. Penney Co. went on to launch in December their Facebook store, which allowed their million’s of fans to shop directly from Facebook during the holiday season. For now, retail transactions coming from Facebook remains small, less than 1% overall e-commerce comes from social commerce. Companies like GNC, believe that this type of commerce could become an important sales driver in the future.

It seems as if companies are still not completely familiar with Facebook’s social e-commerce. This gives a great opportunity for small retail entrepreneurs to start their stores for free without much competition. As mentioned in the article, “Facebook doesn't charge retailers a fee to add the shopping function, nor does it take a cut of transactions that occur on its site.” This is extremely beneficial for entrepreneurial retailers. Small entrepreneurial retailers can start up their stores and promote their products directly from their house and without much cost through the Internet, which if sales are successful, they can have very good profit without having major costs. I found a website called Wishpond.com which gives anybody the opportunity to create a business or store in only 10 minutes in Facebook for free. I even made my own store to check it out, and it worked perfectly for free, I just needed to export the products from another site, set the prices and I was in business. Definitely, social e-commerce is a great and cheap way to start-up a retail store and to embrace an entrepreneurial idea through the Internet.

Read more: http://online.wsj.com/article/SB10001424052748703367004576289461779663904.html#ixzz1caQYhlfr

http://corp.wishpond.com/business/merchants/ecommerce/?utm_campaign=GoogleSite&utm_medium=FbKeywords&utm_source=google.com&utm_term=facebook%20shops

Opportunities for new ideas in RETAIL!

In what areas of the industry are there opportunities for innovation?

In the retail industry, there are many areas for opportunities for innovation. Lately, in the industry, the iPhone has been a way for shoppers to shop or get rewards and see the newest and most popular 2011 trends and styles in stores. Through the apps on the phone, retail chains have been giving shoppers news more quickly and easily (About.com). Technology has really boosted the retail industry and is an opportunity for retailers to give their consumers information or allow them to even purchase.

Amazon.com has an app and allows people to purchase right from the app and shop rather than go online and to their website. They are automatically logged in on the app and purchase goods ASAP.

Aside from technology, retail innovations in 2010 focused mainly on the response to mass market opportunities. There has been a focus on the needs and desires of consumers. With the requirements of an aging population, ethnic consumers, and the pursuit of a healthy lifestyle, give fertile ground for innovative solutions. Retailers have added services and should continue to give information and support to the product mix to provide a complete solution for task oriented shoppers (squidoo).

Back to technology, mobile retailing and target marketing when consumers are at home and not in stores has gained popularity as time pressed consumers seek greater convenience. Rental concepts are also serving as an important niche to consumers (squidoo).

Design solutions are a way to be innovative and have an opportunity to grab the consumer as well. They are simple and with time and effort, new attractions are easy to create.

Overall, there are so many ways like rewards as well for consumers and discounts too to give retailers a way to reach out to their consumer body.

Retailers have opportunities that are uncountable to help them succeed.

1. http://retailindustry.about.com/od/technologyinnovations/Global_Retail_Innovations_Technology.htm

2. http://www.squidoo.com/innovation-in-retail

FALEN RAUCHWERGER

Commenting on revenue and profit of key industry players

Some key general retail industry players for this current fiscal year are Home Depot, Lowe’s, Wal-Mart, Target Corp., Sears Holdings Corp., and in the department stores, Macy’s. In order of revenues from largest to smallest for this fiscal year ending in January 2012, Wal-Mart is currently leading this quarter with $ 109,366 millions; Home Depot follows with $20,232 millions. In addition to this two, Target Corp. follows with $16,240 millions, and then comes Lowe’s with $14,543 million and finally Macy’s with current revenues of $ 5,939 million. Wal-Mart raised its revenue by this quarter of this year compared to the revenues of the same quarter last year, from $103, 016 millions to $ 109,366 millions. Target also raised its revenues this quarter of this year, from $ 15,532 millions to $ 16, 240 millions, as well as Home Depot from $ 19, 410 to $ 20,232 millions. This rises in revenue, in this company’s, are due to the fact that people are looking for low prices in these big box discount stores that offer a great variety of products, such as Wal-Mart and Target, at lower prices. In terms of Home Depot, we can see how the improvement in the housing market is changing and gradually augmenting the revenues of this huge home-improvement company.

In 2010, Wal-Mart reported a 3.7 % profit ratio return from revenues, which gave them a net income of $15,535 millions. Target Corp., also in 2010, reported a 4.3% return on revenues, which gave them a net income of $2,920 millions that year. The reason why I mention these 2 major companies is because they had the most significant change in revenues from 2010 to 2011 and to the present fiscal year that ends in January. This means that if the profit returns percentage happens to stay the same, as revenue increases, the higher their net income will be. For example, if Wal-Mart were to report a 3.7% profit ratio in 2011, the net income would raise 73 million than that of 2010. In addition to that, if the revenues of these companies continue to grow as they are doing, their net income would also grow significantly, making these companies much more solid in this upcoming fiscal year. Finally, if the profit percentage ratio does increase, net income increases, meaning that the companies are doing very well.

Links:

http://www.netadvantage.standardandpoors.com.proxyau.wrlc.org/NASApp/NetAdvantage/cp/companyFinancials.do

http://www.netadvantage.standardandpoors.com.proxyau.wrlc.org/docs/indsur///reg_0511/regb0511.htm#netincome

http://www.netadvantage.standardandpoors.com.proxyau.wrlc.org/docs/indsur///reg_0511/regc0511.htm#profitratios

recent events

Macys has recently developed a new “online destination for fashion”. What they have called it is “mBLOG” which provides viewers with the latest trends and designs in fashion. They are hoping that this inside look into the fashion and home décor will excite shoppers to come in and visit the store. What this also does is allow Macys to see what is popular and likeable before they actually produce the products, saving Macys money. This site is great for the customer.  It gives them an inside look into the latest fashion trends and designs. It also provides viewers with Macy’s major sales and discounts.  On the other hand, the website gives fashion advice to people who seek it, while keeping them informed with major fashion line launches.  

"Macys.com is already a leading resource for fresh fashion, home and beauty products from the world's top brands," said Martine Reardon, executive vice president of marketing for Macy's. "We are excited to enrich our customers' online experience, offering a destination for high-quality content that gives readers direct access to a unique and influential set of voices."

Busineswire.com / Etrade.com

Approaching Holiday Season

While there are many current events happening every day in the retail industry, a common theme throughout seems to be the approaching holiday seasons and expected sales. Companies have been worried about their fourth quarter sales, which usually generates the bulk of their annual sales. Consumer spending has not increased since the recession, and consumers are looking to spend as little as possible even through the holidays. Small companies especially are worried that this could "push their businesses over the edge." Nikoleta Panteva, a retail analyst for IBISWorld Inc., states that small merchants usually garner 25-30% of their total annual sales in the last six weeks of the year, as compared to 20% from the big box retailers. There is only so much a small company can do to stay in business- many have been lowering prices, however, there is only so low they can go to still make a profit. A main problem for them seems to be that larger stores offer a wide variety of products, where as smaller stores usually specify on one specific product which causes them to not attract as many customers.

Contradictory to that last statment, another article explored how Coach is expecting excellent growth in the holiday season, despite having a more narrow line of products similar to a small merchant. They saw profits rise 14% in their fiscal first quarter earnings on strong handbag and accessory sales, as well as growth in the men's business. Coach also reported strong growth outside its brick and mortar presence, with the company website posting double digit sales growth and mobile commerce accounting for over 15% of Coach.com's total site traffic.

Both article go on to make very different but important points about the current trends in retail. On one hand, many retailers are worried about the upcoming holiday season not reaching their sales expectations. This is a time when the retail industry flourishes, and it could seriously hurt many businesses if sales are not up to par. Small businesses especially have reason to worry, seeing as how their sales have not met expectations all year, and a bad holiday season could mean the end for them. As bad as these trends seem, they were not unexpected. In an uncertain economy, people are trying to spend less on discrentionary items and have cut back on gift giving because money has become so unavailable. Many people are looking to get all their holiday gifts from discount retail stores such as Wal-Mart or Target, and may not even glance at small merchants anymore. On the other hand, some companies such as Coach are looking at the holiday season with optimism. Their profits generated from the online and mobile markets have given them hope to continue a successful year into the holidays. Since it was so successful for Coach, maybe some other retail companies should follow their lead and focus more attention on these markets to increase growth and sales.

http://online.wsj.com/article/SB10001424052970204644504576652771127742178.html
http://online.wsj.com/article/SB10001424052970204422404576597442264003476.html?mod=WSJ_hps_sections_smallbusiness

Recession Issues and Balance Sheet Financing

How has the recession (2008-2009) affected companies’ balance sheets?

In 2007, the real estate crisis hit and the economy has been in a balance sheet recession where the private sector began to minimize debt rather than maximize profits. This was late 2007. Beginning 2008, Lehman Brothers became the example of the financial crisis. "Balance-sheet recession is a problem of borrowers, while financial crisis is a problem of lenders" (Koo). People with damaged balance sheets lack interest in raising their borrowing at any interest rate. In reference to liquidity, capital from government spendings are necessary for banks to be able to lend money again. The recovery that started from 2009 led people to think that the economy is on its way to full recovery. The balance sheet issue was still in full force so politicians refused to renew fiscal stimulus in February 2009.

The financial crisis of 2008 which continued into 2009 was a worldwide crisis and considered one of the worst since 1933 with the Great Depression. By early December, the whole economy was heading downward with no light at the end. The recession that started in 2007 (late December) only worsened when the retail sales decreased. Come November 2008, U.S. citizens grew discouraged and went about trying to save money and decrease credit card purchases. Auto sales were down by about 37% in November to the lowest they had been in about 26 years. GM fell 41% and Ford 31%. Retailing plunged dramatically. They rang up the lowest November sales in more than 30 years as holiday seasonal shoppers did not purchase and not only failed to lift the economy but showed that the crisis is further distressing everyday consumers. Balance sheets showed decreasing numbers from this horrid situation. Thirty huge key player companies like Macy's, Sears, Abercrombie and Target all posted sales declines and lowering balance sheets. The Fed Reserve reported in Dec. 2008 that each region in the country documented much in their sales declines and decreases in manufacturing. The balance sheets faced financial decreases and assets went down. Retailers found themselves in a tough situation during the financial crisis period of 2008 and 2009.

Koo, Richard. "Is American Headed for a Double-dip Recession?" The Economist. Web 26 Oct. 2011.

Global Company- Nike

I found an article that focused on the global market for Nike, Inc. and how they plan on expanding their global plan in the upcoming years. According to the Los Angeles Times, "the world's largest goods maker Nike has launched a plan to expand the global retail market, opening 250-300 stores around the world in the next five years." Citadel Outlets are also looking to expand, which would give Nike an even more competitive advantage with 2 major companies expanding around the world.

Nike is known around the world as being a global competitor for their merchandise and apparel, most specifically shoes. With the new expansion plans in place, Nike is taking steps to become even bigger and more well known throughout the world. The more they expand, the more income and sales they are opening up opportunities for. Some problems recently arose concerning Nike and ethics. They became known for poor working conditions in Asia, treating their workers unfairly and paying them unfair wages. While Nike took a hit from that, they are responding by changing practices and expanding. These two should help Nike recover, although they didn't take too big of a hit. As Nike becomes more globally competitive, they will have a larger advantage over their competitors such as Under Armour and Adidas.
Source:
http://www.cantonscore.org/the-global-retail-market-plan-of-nike.htm

Outsourcing

Many of the players in the retail industry manufacture overseas and utilize outsourcing. This is especially true with companies such as, Nike, Macys, and Wal-Mart. Wal-Mart uses companies like Infosys and Wipro for their outsourcing in Asia and other international country’s. In fact, contracts like these are worth upwards of $500million Dollars so the overseas contracting business is a very competitive business. Keep in mind that these are not manufacturing contracts, but IT contracts.  Furthermore, India has over 26% of the worlds IT exporting services. Other major retailers like Tesco, the British version of Wal-Mart, also outsources their IT to countries in Asia, specifically, India. In fact, Tesco claims it saved over $60million by outsourcing its IT to India. Wal-Mart saves a similar amount by doing this too. The reason Wal-Mart does this is to help in the globalization process of their corporation.  Wal-Mart also has a joint venture with a company called Bharti, to increase its presence in India.

Nike is another Corporation that outsources to Asia. Nike produces a lot of their shoes in Asia because labor is so much cheaper. As a result, less is taken from their bottom line and they profit more. Home Depot and Sears also do a lot of outsourcing to China. A lot of their products are produced in China because of the cheep labor. There was a famous case in 2006 concerning the Young Sun Lighting Co, which produces lamps and fixtures for Home Depot and Sears, because of poor working conditions in the factory. An overall theme for outsourcing in Asia is that the working conditions in the factories are very poor. Some controversial companies such as Nike have a tarnished reputation because of this.

-David Connolly

http://www.businessweek.com/magazine/content/06_48/b4011001.htm

http://www.businessweek.com/globalbiz/content/jun2009/gb2009068_435509.htm

Which company in your industry are most global? What has been the key to their success in other countries?

I found a list of the “Global Powers of Retailing”. This list includes the major global companies that are leading the retail industry in each of their 32 countries. The list ranks companies globally according to their overall revenue. Wal-Mart is ranked #1 top global retail company in the world and in the US. Wal-Mart’s 2010 retail sales were $ 303,935 billion. It had sales per store of 72,400,000 in 2010 with about 4, 198 stores. Today, Wal-Mart has about 6,000 outlets, which proves that they are still expanding.

They are also expanding in the grocery department as well as Target and other large-format value stores. For example, Wal-Mart has created a “Wal-Mart Express” which provides fresh “foods, dry grocery, consumables, health and beauty aids, over-the-counter medicines and in some stores pharmacy counters”. They are attracting all of the different consumers because these stores will be located in small rural communities, as well as in urban neighborhoods. All successful retailers are identified by their selling proposition. The key to Wal-Mart success in the US and in other countries is their price uniqueness. In bad economic times, people are looking for low prices and good quality products. That’s why during the bad economic times Wal-Mart still increases its sales: “Customers stocked up on low-priced merchandise and Wal-Mart quadrupled its same-store-sales gains over May 2007.”

Wal-Mart’s worldwide success is due to its discount store set up. In 2010, Wal-Mart’s worldwide sales generated $ 421, 886 billion. They also had an increase in sales of 1.3 %. These are due to their low price stores during bad economic times, which attract many consumers.

Links:

http://www.stores.org/2011/Top-100-Retailers

http://retailindustry.about.com/od/retailbestpractices/a/retailindustry_article1.htm

http://retailindustry.about.com/od/famousretailers/a/retailercountry.htm

Companies over the world that are major in Retail !

What non-US companies are key players in the industry?

In the retail industry, we experience seeing many non-U.S. global retailers that play key roles. All over the world from Australia to Belgium, we find companies that have such a significant impact on the retail industry. In Australia, we see that Woolworths Ltd. is a major retailers. They are a convenience store. In Canada we see the retailer that is a top retailer called Loblaw Companies ltd. where it is more of a discount store and warehouse club. China, which is now a booming country is many industries and becoming one of the top producers in the world in manufacturing goods and having plants in their country, has a top retailer called Bailian Brilliance group. France is quite a wealthier country and has retailers that are more luxurious than other countries. That is more popular as a trend throughout European nations. In France, we see the second top retailer called Carrefour. They are a discount store as well and convenience. Germany has the top third of their country called Metro AG which is a company that sells apparel and footwear. Sweden actually is the creator of the company called Ikea, as we see the Ikea group popular even here in the U.S. They sell household goods and furnishings. United Kingdom has a huge retailer and worldwide known called Tesco. They are a discount department store that does very well in the retail industry. As we can see, it has been a popular trend over the world to have many top retailers and companies that supply goods in the retail industry. Many countries have discount stores or department stores or convenience stores that all fall under the retail category that become worldwide. For example, Ikea is a huge company and has been brought into the U.S. for Americans to enjoy their goods. Overall, many companies over the world have something to offer in retail.

http://retailindustry.about.com/od/famousretailers/a/what-are-worlds-largest-retail-companies-retailers-chains-complete-list-2011-.htm

From,

Falen Serena

Section 3 : Consumer Trends

I found some information about retail sales and therefore consumer spending and trends.

Retail sales growth slowed because of tough economic conditions and because of a weaker housing market during 2009 and 2010. However, in July 2011, the US consumer spending demonstrated that retail sales augmented 2.8% for nondurable goods compared to the percentage of sales in July 2010. Another indicator of consumer trends is the increase of 8.3 % of total US retail sales in the first 8 months of this year (“Retail Sector,” 2011). For example Home Depot, ranked #1 major home improvement company, rose 3% on sales even though a weaker housing market has affected it, and Macy’s, ranked #1 major department store, raised its sale’s income by 5.7% (Schulz, 2011).

Another important consumer trend that affects US retail sales is tourism spending, which rose 4.7% during the first quarter of 2011 compared to 2010 (“Retail Sector,” 2011). The Internet retail sector is being affected by consumer trends as well. A popular Internet consumer trend is the use of a tablet as a more effective tool to buy online. Retailers like Macy’s report that tablet users place bigger and more expensive orders, adding 10 to 20% more to the cost, compared to shoppers that use a PC or a smartphone. Tablets and mobile device consumer spending represent 3% or 4.5 billion dollars of consumer online spending and it is expected to rise. (Mattioli, 2011).

It seems as if consumers are regaining confidence and stability in their income as the economy improves. Companies respond to these consumer trends. Therefore, these companies that are gaining money through online retailing are going to improve their online retailing by making the sites "tablet friendly".

Links:

http://online.wsj.com/article/SB10001424052970204010604576597151983657300.html?KEYWORDS=Tablet%3A+ultimate+buying+machines - Tablets: Ultimate Buying Machines

http://subscriber.hoovers.com/H/industry360/overview.html?industryId=151

http://www.stores.org/STORES%20Magazine%20July%202011/home-improvement

http://www.stores.org/STORES%20Magazine%20July%202011/department-stores

How do Retail Stores differentiate from each other?

Companies in the retail industry differentiate themselves from one another in several categories. One of the most obvious ones is price. Every consumer has their spending limits; and depending on how much they are able or willing to spend, will decides which kind of store they will shop in. This means some people are only able to shop in inexpensive stores, such as target, while others can shop in high end stores like Neiman Marus.

“While the free spending of the affluent may not be of much comfort to people who are out of jobs or out of cash, the rich may contribute disproportionately to the overall economic recovery.”

“This group is key because the top 5 percent of income earners accounts for about one-third of spending, and the top 20 percent accounts for close to 60 percent of spending,” said Mark Zandi, chief economist of Moody’s Analytics. “That was key to why we suffered such a bad recession — their spending fell very sharply.”-NY TIMES ARTICLE

Another way that retail stores can be categorized is by looking at the apparel they sell. – Some stores carry specific items such as summer wear, sports clothes, jewelry etc. While others carry clothes specific for women, men, or children.  This is true with retailers like Victoria’s Secret, Men’s Warehouse and Gap Kids.  

http://www.nytimes.com/2011/08/04/business/sales-of-luxury-goods-are-recovering-strongly.html

Current Events in Retail

What are some current events in your industry?

http://online.wsj.com/article/SB10001424052970203388804576614653132866200.html

This article from the Wall Street Journal is all about sales increases during the month of September, mainly due to discount prices and back-top-school shopping sales. Companies like Target, Costco, Macy's, Nordstrom, Saks, and Kohls all saw sales percentage increases that were higher than what analysts expected. While this was a positive note, the vacancy rate in malls is increasing. Retailers have recently been scared out of opening new stores in such an uncertain economy. Also, retailers are not looking forward as much to the holiday season this year. They are concerned about stress on consumers and weaker traffic blunting sales growth. FedEx Corp., who usually sees a lot of holiday traffic, expects slower growth this year. They expect holiday shipments to climb anywhere from 2.5%-3% as opposed to the 4.3% growth in 2010. The holiday season is not expected to benefit retailers as well as it did in previous years, and this is an prevalent concern in the retail industry.

The increase in growth for retailers in September was no surprise. The back to school savings lure consumers in, as everyone is looking for a good deal. Retailers know that products like clothing and school supplies will be necessary to start a new school year and they take advantage of September as a month to offer discounts but still boost sales and growth. On the other hand, the concern looking ahead to the holiday season was no surprise either. The current economy has consumers purchasing more and more inferior goods and less normal goods. Because of this, gift giving won't be as much of a priority and the holiday season will suffer more so than in previous years. While growth is still expected, it will not be nearly as high. These events are currently affecting the retail industry, and will continue to affect the industry throughout the coming months.

Pricing Trends and Patterns!

What are pricing trends in the industry?

In the retail industry, pricing trends change over time. During different seasons and holidays, the trends vary and may shift upward or downward. We try to predict future movement of a stock or company based on past trends and data that have been collected and obtained. "Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future" (investopedia).

For example, pricing trends have been pretty stable lately and stores are realizing from the pricing trend being stable, they have not been bringing in enough business and must push prices upward. Trends in a time where the economy is not doing well have shown in the past that prices increase. "Retailers are raising prices on merchandise an average of 10 percent across the board this fall in an effort to offset their rising costs for materials and labor" (wsj). This has not always proven successful in the past considering that consumers do not have the money to spend on these goods and especially at such high prices. Retailers now are trying to raise prices just enough to get more money and keep customers. Pricing trends during good times remain consistent to what the company is reputable for. For example, Walmart, a discount store, will not push up an retail prices and keep their usual low cost items for customers to buy. They have done well and their pricing trends stay the same.

Trends sometimes change due to other things than just recessions and hard economic times. Trends may change because of holiday seasons. We have seen that consumer spending is way higher in December and therefore, companies push prices up. Yearly, we see that companies do sell their goods and these higher prices and trends are created. We review the records and the consistency of sales proves that each year it is okay to keep prices high during holiday seasons.

Overall, pricing trends in retail take a turn for the better and for the worse at times but thats what a trend is all about. We review past history and it's patterns so we can navigate our future and what to predict for sales and our economy.

http://online.wsj.com/article/AP677949c8db7440048048ff7df9b20e58.html?KEYWORDS=pricing+patterns+in+retail

http://www.investopedia.com/terms/t/trendanalysis.asp#axzz1a9KEN62o

Business and Ethics by Carlos Andreu

Business and Ethics by Carlos Andreu 

· What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal about them?

I was looking at some major retail companies mission statements. I was reading about Target’s, Home Depot and Costco Wholesale mission statements. Home Depot’s statement caught my attention because unlike many other companies, Home Depot breaks down its mission statement into “8 corporate values to guide employees at all levels”. The 8 corporate values are: (1)"Taking care of our people: The key to our success is treating people well. We do this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so they may grow. (2)"Giving back to our communities: An important part of the fabric of The Home Depot is giving our time, talents, energy and resources to worthwhile causes in our communities and society. (3)"Doing the right thing: We exercise good judgment by "doing the right thing" instead of just "doing things right." We strive to understand the impact of our decisions, and we accept responsibility for our actions. (4)"Excellent customer service: Along with our quality products, service, price and selection, we must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to their maximum benefit. (5)"Creating shareholder value: The investors who provide the capital necessary to allow our company to grow need and expect a return on their investment. We are committed to providing it. (6)"Building strong relationships: Strong relationships are built on trust, honesty and integrity. We listen and respond to the needs of customers, associates, communities and vendors, treating them as partners. (7)"Entrepreneurial spirit: The Home Depot associates are encouraged to initiate creative and innovative ways of serving our customers and improving the business and to spread best practices throughout the company. (8)"Respect for all people: In order to remain successful, our associates must work in an environment of mutual respect, free of discrimination and harassment where each associate is regarded as a part of The Home Depot team."

This statement reveals that Home Depot is devoted to give back to all of their stakeholders. They focus on costumer satisfaction, by providing good services and on creating loyal costumers for their brand by building strong relationships based on “trust, honesty and integrity”. Their statement also reveals that they base their decision thinking on what is best for their stakeholders, not just taking a decision that can affect the community or environment, for example, to gain a larger profit: “We strive to understand the impact of our decisions, and we accept responsibility for our actions.” Also, I was reading that these values are central to the company’s success. They point out in there website that these values are their “competitive advantage in the market”. As I pointed out in the first posting, companies make profit not only because of selling products. Retailers need to make sure costumers are satisfied with their products and services because this creates loyal costumers and stakeholders for companies, which creates long-term profit. I think Home Depot seems to have values that fulfill this.

Here are some other mission statements:

Target: "Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less. ® Brand promise." "To support our mission, we are guided by our commitments to great value, the community, diversity and the environment."

Costco: "Costco's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, take care of our members, take care of our employees, respect our vendors If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders. "

Links:

https://corporate.homedepot.com/wps/portal/? - Look for values under our company

http://retailindustry.about.com/ - look for TargetCorp. and Costco Wholesale mission statement

Sincerely,

Carlos Andreu