RETAIL + LUXURY – Utilizing our expertise in the field of consumer, industrial and commercial retailing.
With recent economic fluctuations, the rising cost of credit and waning consumer confidence, retailers often find themselves on the front line of an increasingly competitive market. Whether it’s in the field of consumer, industrial or commercial retailing, we have the expertise to help you manage the crowded marketplace to drive sales growth.
Retail:
Retail is the business of selling goods made by others to individual consumers. It is a huge industry, dominated by Wal-Mart, which touches every corner of the globe. Due to the decline in the global economy, the future of many retailers is uncertain as consumers begin to spend less.
Industry Composition
The retail industry is the last step in the process of getting products to customers efficiently, and should not be confused with the wholesale activities which precede it. The difference between the two is that wholesalers are companies that sell their products to businesses, whereas in retail, the goods are sold directly to the consumer. Wholesale establishments play an important role for retail establishments, as they generally provide retailers with the resources they need to run their business in addition to the goods and products they sell.
Any business that sells goods to individual consumers is a retail establishment. There are many kinds of retail establishments:
Department stores: a large retail store organized into departments offering a variety of merchandise and often for ms the cornerstone of a mall, such as J.C. Penney’s
Discount stores: mass-merchandisers or membership warehouses, such as Costco
Category killers: large stores that specialize in one type of merchandise, such as Depot
E-tailers: sell goods online, such as Amazon
Specialty stores: concentrate on one product type and sell it in a way that makes it unique, such as The Body Shop
Grocery stores: provide food and beverage, such as Kroger and Jumbo
Convenience stores: include gas stations and corner stores
Retail establishments are a huge industry with $4 trillion of revenue in the U.S. alone. There are many different retail sectors: motor vehicles and parts, which involves the sale of new and used cars and comprises 25% of sales in this industry; specialty stores that make up 19% of sales; general merchandise as well as food and beverage, each of which composes 15% of sales; convenience stores that account for 10%; and building material and non-store retailers; each comprises 8% of the sales for the industry.
Trends
The industry has recently seen a rise in the use of consumer resource management (CRM) and radio frequency identification (RFID). With CRM, companies can use the data collected about their customers to suggest other products that might interest them. RFID allows a company to precisely track their inventory, knowing when more of something is needed as well as how much, thus making supply chain management more efficient. This is done by placing a small chip on the packaging of the item itself.
Another recent trend is lifestyle retailing, in which stores will sell both apparel and household items of the same style, i.e. Urban Outfitters. Ecologically friendly products are also an emerging trend as sustainable practices are applied, and are environmentally friendly, energy efficient, or “green” in other ways. Lastly, self-checkout in large stores is also on the rise, reducing the need for labor. Due to the recent economic downturn, consumers have become more price conscious. This has created an environment in which discount retailers have become the stores to prosper. Additionally, in many department stores, private labels (i.e. store brands) have started exploding with sales growth. So much so, name brand companies such as Heinz have signed contracts with department stores to bottle the private labels. The explosion in sales is mainly due to the similar quality at a much better price. Another major trend has been the comeback of coupons. The price conscious consumer wants to know they are getting the best deal around, and this is the simplest route to appease their desire.
The last major trend in this area has been the move towards direct retailing. Direct retailing is the process of advertising and selling a product directly to a customer. The most identifiable version of this is with infomercials. However, the largest segment by far of this industry is E-commerce, or online shopping. Online shopping has boomed in the last few years with online juggernauts like Amazon taking a large portion of the pie. Between the specific advertising generated by companies such as Google and the lower prices online retailers are able to offer, brick and mortar retailers are having a hard time competing. Additionally, with cell phone applications allowing consumers to walk into a store, scan a barcode and then buy the product online at a lower price, this trend is developing at an ever increasing rate.
Industry Leaders
Wal-Mart Stores (United States), CVS Caremark (United States), Costco Wholesale (United States), Tesco (United Kingdom), Carrefour (France)
