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