The Changing Phase Of Department Stores And Discount Stores In The United States

Defining Department Stores and Discount Stores

This piece of work will discuss the changing phase of department stores and discount stores in the United States of America. It will start by defining these two terms: department stores and discount stores.

A department store is an establishment of a large retail which has a wide range and variety of goods set under one roof and is organized into several separate departments (Ikeler, 2016). These departments can be divided into groups of products such as foods, household textiles, electrical appliances, ready-made clothes, and furniture, just to name a few, and the departments are supervised by managers. On the other hand, according to Reimers (2014), a discount store is a large retail business that sells its goods at a price which is lower than that of other retail stores. Discount stores tend to lower their prices due to their distribution methods which are efficient. The efficient methods make use of strategies and tactics such as cutting margins of profits, maintaining high volumes of sales, negotiating wholesale prices which are lower, ensuring expenses are very minimal and availing off-season goods.

Discount stores which specialize on a certain type of retail goods are commonly known as category killers while those which are only open to a specific group of people such as cooperative members or employees in the government are called closed-door discount stores (Coibion, Gorodnichenko and Hong, 2015). The difference between a department store and a discount store is that a discount store sells its goods at a lower price than other retail stores in the vicinity while a department store sells its goods without any discount. In addition, a department store offers its merchandise under one roof with a wide assortment of goods while a discount store may not avail a wide range of goods under one roof. However, a discount store may have several departments and is hence mostly known as the discounted department store (Des Rosiers, Theriault and Dube, 2016).

The department stores of the United States of America have over a century been pillars of retail. Department stores such as Saks and Bloomingdales were established in the 1800s. They have been serving consumers in the country efficiently for many years. The United States’ department stores have developed in such a way that consumers can shop right from their homes without moving to the stores. However, due to the high rate at which discount stores are developing at has made many shoppers to lose the willingness to venture into department stores. In fact, a department store known as Macy’s had recently reported and announced that it would close about forty of its stores because of the poor sales that they were experiencing. For this reason, the traditional department stores are putting all efforts and measures possible in order to enter into the current digital age. They are trying to use new strategies in order to excite and entice customers to shop at their premises (Sternquist and Goldsmith, 2018).

The Differences Between Department Stores and Discount Stores

Macy’s, Hudson’s and Marshall Field were the biggest three department stores long ago in the 1960s. They led in terms of volume of sales as well as in terms of their physical size. As time moved, Hudson’s increased its employees to about 12,000 and the shoppers as well increased to about 100,000 per day. Most of the United States’ department stores deal with goods such as clothing, beauty, furniture, electronics, bed and bath, books, baby gear and art and crafts. Macy’s, Kohl’s, JC Penney and Nordstrom are some of the large establishments of retail in the United States which offer products that are of a wide variety in various several departments such as home goods, apparel, cosmetics, accessories, electronics and sporting goods (Rose et al., 2014).

Retailers have been greatly relying on giving discounts in order to propagate sales and to make shoppers buy products from their in-stores as well as online. Discounting is a very effective way of stock shifting but if a retailer over-uses it carelessly, it can change the way the customers view him or her hence violating the reputation and bringing the business down. Before offering documents, a retailer should consider other means which can also bring value to the shoppers. A retailer should have employees who have experience and expertise in the handling of customers. (Bolton and Shankar, 2018). Good and reliable suppliers should be connected to the retail for a proper, continuous and reliable supply of products. Retailers would have a bright future if they understand the needs of the shoppers. Some retailers in the United States have started planning on how to acquire information about customer history of shopping, their history of website surfing and other customer behaviors in order to offer what customer best requires. They consider customer’s history of browsing sessions for the purpose of determining the exact commodities that customers require and also differentiate whether the shopping is done for oneself, for a friend, a sibling or a parent.

Due to the highly competitive market today, it is not enough anymore for retailers to remain in a dominance of a single channel. For the retailers to survive and succeed, a lot of strength has to be imparted in online as well as in stores. Due to this reason, many retailers tend to change to mergers in order to survive in the market. Diversification of retail stores requires the building of new products, new markets exploration and risk-taking. This is one of the sure potential ways of remaining competitive in the market. (Brea, Casadesus and Grifell, 2015). Today’s landscape of retail has been filled with newness and an inventory which is ever-changing and diversifying to break traditional boundaries. Merchandisers have been involved in hard work than before to build interesting partnerships with successful celebrities and also the competing brands.

The Growth and Development of Department Stores in the United States

The increase in the cost of fuel in the United States has resulted in the increase in prices of most commodities. It has also led to an increase in the cost of maintaining labor. It is anticipated that interest rates will continue rising based on the experience of the past few years. However, retailers should not compromise the quality of products in order to evade the cost of the products since customer satisfaction is very significant. There is a universal fact that there is an absence of silver bullets in the efficiency of energy. Reducing the consumption of energy relies greatly on several changes in policy, the equipment and also operating parameters. These changes call for high technical discipline, strength as well as expertise. The low price has remained a big challenge for retailers in the United States despite the advances in technology. Mass merchandisers and department stores have also been put in the struggle due to low prices. However, the market growth is expected to reach about 3.8% despite the high competition in the market.

In the next five or ten years, retailing will be quite different because shopping habits in the United States are drastically having changes where retailers and developers of technology are working very hard to make every part of the industry to be more effective and digitalized. This can be seen through the new mobile payment means as well as the new delivery methods which are all reinforcing online shopping and simplifying the finding and purchase of products in their stores. Technology has made it possible for prices to change with just a click of a button (Bjelland and Wood, 2015). This change in prices can be done to mark down weekly specials or to give special offers to customers. Through technology, adjustment of prices can be done within a very short time. Digital mirrors have also enabled shoppers to try out and therefore get a feedback for such wares as make-ups and glasses hence allowing the customer to make a firm decision on what to purchase. This is in return promoting customer’s satisfaction and motivation to continue shopping (Basker, 2016). In addition, robotic shopping carts have been designed where they guide the shopper to the specific shelves that have the products that he or she has after importing the shopping list. These robots are also able to carry the products for the aged people as well as the disabled.

Changing Strategies to Attract Shoppers

Another technology which is still on the developing process in the United States will make use of cart-less shopping where shoppers will use their phones in selecting and adding the items they require into a virtual cart. The items can then be delivered to their homes. Moreover, through technology, a retailer does not need to keep and display so many products in their stores. This is because technology has been developed where a shopper finds fitting shoes, dresses, trousers and other wares online. Restocking of shelves has also been overtaken by robots where employees for this task are not required anymore. Therefore, retail will be very strong and shoppers will find it easier to buy commodities due to the vast change in technology (Sciandra and Inman, 2015).

There may not be a different type of store in the future. It is very significant to note that, as far as the technology is changing and developing at a very high rate, there are some kinds of attention, care, and assistance which a piece of a technological program may not give but a customer service team will satisfactorily give. Therefore, there is a need to strike a balance between offline and online experiences in order for stores to offer best services to a shopper. What may change is the physical outlook and operations of the stores. In the years to come, technologies which have not yet been invented will be developed and make purchasing of products very convenient to shoppers. Both the digital world and the physical world will have to merge and offer services which are new and unimaginable today (Feenstra and Hanson, 2015).

Retailers may use different ways to assemble merchandise to their customers. To establish the right strategy of merchandising may depend with the qualities of the product, the sector, the space available and the mode of displaying the products whether digital or physical (Millhouse, Burleson and Meredith, 2017). Scrambled merchandising occurs when a retailer sells scattered products which are unrelated and which may not relate to the original focus of the store. For example, a customer may go to a drug store but can still buy other products such as groceries from it (Breslow and Swafford, 2015). Digital merchandising is where promotional activities aiming at selling products are done online. On contrary, retail merchandising involves advertising and making sales of products physically at the vicinities of the store (Paolini, 2017).

Challenges and Opportunities in the Retail Industry

Conclusion

In conclusion, the way retail stores used to operate in the traditional times is not the same way they are operating presently, and move advancements and developments will continue being laid down, making retailing to be better than today. There is a phenomenon known as mobile commerce which has spread worldwide, where customers shop at their own homes or anywhere regardless of where they are in the world. Since nature hates vacuum, there will always emerge new concepts and new ideas will transform this sector of retail (Yadav, Sharma and Tarhini, 2016).

References

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