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Retailing: Facts & Trends

Internet Retailing is Huge
The market capitalization of leading internet retailers like Amazon now exceeds that of many leading "bricks and mortar" players such as JC Penney or Toys R Us. An important element of Internet retailing is the ability to aggregate consumers with a narrow interest such as those looking to purchase light bulbs or shoes.

Recession is Hurting the High End.
The 2008-2009 recession has adversely affected the performance of moderate to high end retailers such as Abercrombie and Fitch, Tiffany and Nieman Marcus. In contrast, discounters and retailers aimed at selling necessities have performed substantially better. Revenues of Wal-Mart and Safeway, for example, have been stable to up.

Globalization of Retailing Brands Continuing.
Many retailers now can be found in countries across the planet. This is true, of course, for many luxury goods retailers. Hermes and Louis Vuitton stores are to be found on every continent except Antarctica and branding campaigns for these retailers are truly global. The trend is broader, however. For example, Carrefour of France and Aldi of Germany are present on multiple continents.

RFID is Making its Move.
Radio frequency ID tags allow for "wireless barcoding" of retail goods and facilitate the process of checkout and loss prevention. It is expected that wireless technology will transform the shopping process in many ways over the next several decades.

Greater Entrepreneurialism from Established Players.
Apparel retailers like Limited Stores, Liz Claiborne and Ralph Lauren are innovating with new brands aimed at emerging tastes. Examples of such brands include Juicy Couture. Hotels are showing similar branding efforts with innovative new chains being introduced like "W" hotels.

Category Killer Reigns Supreme
The 1990s saw rapid growth of retail category killers, and that trend has solidified into a fact of life in the current decade. Stores like Wal-Mart, Toys R Us, Home Depot, and Baby Superstore have come to both dominate and redefine their markets by offering shoppers a great variety of merchandise in a product category under one roof, often at extremely competitive prices. Category killers usually dominate either on price, selection, store appearance or, better yet, all three.

Discount Retail Continues to Gain Share
Traditionally U.S. retailers have been segmented into discount general merchandisers, department stores and specialty retailers. One of the most remarkable trends in the past couple of decades has been the increased market share of the discount retailers such as Target, Wal-Mart and Kmart. Due to the introduction of higher end goods in the discounters (e.g. Martha Stewart housewares at Kmart and Phillipe Starck housewares at Target), it's become chic to shop there. Between 1988 and 1998 discounters' market share rose from 43% to 63% while department store sales dropped from 25% to 15%. This continues today--a trend solidified by the effect of the current recession on shopping patterns.

Watch Your Employer Carefully
Pay attention to the track record of the company you go work for, consider how they're positioned in the current market, and network outside your current employer. When we first wrote this section in 1995, we pointed to several large and (at the time) stable retailers, including big department store chains like Federated, Marshall Field and May and then-massive discounters like Sears, Wal-Mart and K-Mart. Since then, all but a couple of these have been bought, filed for bankruptcy protection, or suffered significant financial difficulties. Pick, choose, be smart, and be prepared to move if necessary in the course of your career.

Be Prepared to Move
It bears repeating: in retailing you have to be prepared to move. This is true even if stay with one employer. Candidates who are unwilling to relocate will have a harder time moving up the organization because you will have to wait until the person above you moves on so you can move up. Usually, a retail chain will defray your relocation expenses.

Learn the Ropes
The operative words in retail are things like sales per square foot, shelf space, cross-promotions etc. There is a lingo and a set of skills you will have to pick up mainly through experience. Don't be afraid to start off with an entry-level job that will let you really learn the ropes.

Discounters Branching Out
Discount retailers have become increasingly broad in their product offerings. Wal-Mart, Target and others now include grocery sections in many of their stores to offer a full range of products to shoppers. One-stop is a dominant idea of our time.

Micro-Marketing Picking Up
An important trend which is picking up steam in retailing is micromarketing. Stores like Target actually stock each of their stores differently according to seasonal and demographic differences. Using computerized reports on sales per store, it is possible to go in and expand one set of offerings and shrink another on a week to week basis. This has proven to be a major source of competitive advantage which is sure to be duplicated.

Opportunities Plentiful
According to the U.S. Department of Labor, 15.3 million Americans were employed in the retailing industry as of 2006. While there has been some retrenchment in the current recession, this is still a big business with plentiful opportunities. It can be easier to get entry-level jobs in retailing than in other industries, and while the lowest level retail jobs can be hard work for not much pay, they can also be a chance to get in the door, demonstrate your value, and move up the ladder.

Change is Constant
As good as career opportunities in retail can be, you have to be ready for change. The industry has gone through a wave of consolidation as category-killers and big discounters like Wal-Mart have become dominant. Some retailing sectors experience heavily cyclical booms and busts along with the economy. Things have changed, are changing and will continue to change. Be ready for it.

Ever Think of Starting Your Own Store?
One important retailing career opportunity is as store owner. It can be high risk, but high reward. Many people go into retailing to obtain experience that will be beneficial later in starting their own business. Some of the most interesting stories in retail involve entrepreneurs who took big ideas national. The Gap was started by a hippie-ish lawyer in the 1960s who was unhappy with the availability of blue jeans at the time. At about the same time, the Limited began to take off under the guidance of brilliant retailing entrepreneur, Leslie Wexner. There is opportunity in retailing. Big time.

Many Channels of Retail Available
There are also many forms of direct retailing (non-store) which can offer career possibilities such as mail order, home shopping network, vending machines, online retailing, and catalogs. A shake-out could be coming in these venues.

Think Technology
Think about mastering technology in retail. Stores such as JC Penney have made dramatically increased their efficiency by using EDI (Electronic Data Interchange) and QR (Quick Response). These technologies allow retailers and suppliers to observe sales instantly and react by placing orders, diverting shipments and making payments on merchandise. There's also great interest in improving point of sale (POS) equipment.

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