1-Macy’s department stores structure several of their floors with a brand- oriented shop-in-shop design. Discuss in detail, the advantages and disadvantages. Include in your analysis other stores who have done this successfully (i.e., Bloomingdales).
Like other departmental stores, the structure followed by Macy’s specifically for the Herald Square is quite clear across its floors. The first floor of the Macy’s carries jewelry, fragrances, cosmetics, and luxury products. This floor uses a brand oriented design where specific brand products are sold together in mono-brand store areas. It is referred to as the shop-in-shop design structure. The in-store designer brands such as Gucci, Louis Vuitton, and Burberry are grouped on one floor. The in-store marketing and visual merchandising aids stores like Macy’s appeal to the upper scale by also targeting a broader market group. The branding by the Macy’s is very crucial to its marketing as it positions it in the upper market group (Zentes, Morschett, & Schramm-Klein, 2012, p. 343). Like Macy’s, Bloomingdale also targets middle to the upper scale market group. For targeting this group, Bloomingdale showcases high-end luxury brands. The store layout for these types of brands as compared to the ones like Sears is very different. Retailers do not keep their stock items in one place from different manufacturers, but gets the advantage of the brand name and gives different store locations to different manufacturers. It is because of the reason that the high-end luxury items do not compete on prices, the users of such items have specific preferences (Ciciora, 2013).
2-Over the past two decades, many retailers have shifted their focus to CRM and introduced loyalty card programs as a tool. Some researchers, today, are critical of such programs, claiming that “loyalty programs do not cause loyalty”! Discuss the loyalty and reward programs instituted by the company you are working on for your final project. Have these programs been successful? Do they need to be changed or discontinued?
Over the past few decades, many of the retailers have used CRM to introduce loyalty card programs as a useful tool. The usage of these programs needs substantial costs, as it needs to offer many reward programs. Moreover, to get meaningful data from these programs, IT systems and IT administrators are needed which are quite inexpensive. Many critics claim that these loyalty programs do not create loyalty. They criticize the use of loyalty cards to establish loyalty. They claim that loyalty is to be made an integral part of the retail marketing strategy. Critics also claim that the success of these loyalty programs cannot be measured, but this is true for all marketing strategies. Therefore, a successful loyalty program is easier to measure than the traditional one. However, it is true that only loyalty programs would not offer the gain to a retailer if it is not focusing on the compatibility of it with its broader strategy. However, it is indeed true that alignment with corporate strategy is crucial, the benefits of detailed customer data and their preferences can be enormous if used wisely.
The loyalty program of Starbucks is considered as one of the best. Its loyalty program offers an interactive experience for its customers. The loyalty program not only offers loyalty points and rewards, but also offers online ordering, Starbucks locations information. The program offers a reward program specifically for each group of points shown to them. It also provides points for any purchases outside their retail. The gold card gives its customers a feeling of exclusiveness and importance. However, the loyalty program 2016 misses its aim by not providing enough information about the customer’s earnings (Snyder, 2016).
3-Discuss in as much detail as possible the buying processes of the company you are working on.
The buying Process for Starbuck’s Consumer
a-Recognition of the need for Coffee:
The first stage of any other buying process for Starbucks would be the recognition of the need for Coffee. The brand name of the company is very well known, and the name pops up in mind.
b-Information Search:
As the star buck products are categorized as a low-involvement purchase, its information search happens while the person is in the store by catching the eye from the in-store advertisements to give information about their products.
c-Alternative Evaluation:
The evaluation of the alternatives starts from the moment the customer takes its step into the coffee shop. The ambiance and customer experience of the Starbucks with its human interaction through employees make it an attractive alternative.
d-Purchasing
The next step is the actual purchase decision. The decisions about the purchase in case of Starbucks often happen long before setting foot in the store.
e-Purchase Evaluation:
The evaluation of the purchase is done while enjoying the coffee purchased in the coffee shop or after taking it out. In both cases, if the customer is satisfied, the buying process shortens to two steps, need recognition and purchase decision (Zentes, Morschett, & Schramm-Klein, 2012).
4-Imagine that you are a business consultant. Would you advise Walmart’s officials to rethink their logistics sustainability campaign? (When answering this question, compare Walmart’s sustainability efforts in logistics with those of other retailers).
The factors of sustainability have got more important in recent years and have become an integral part of the retailing and logistics strategies of companies. The incorporation of the sustainability efforts within the logistics strategy has caused an improvement in the efficiency of the truck fleet. The logistics of Wal-Mart comprises of two primary components, the storage facilities, and the transportation. The company Wal-Mart has the largest distribution networks in the US. The distribution centers are different concerning the goods stored in it. Wal-Mart is one of the most massive bricks and mortar retailers who for competing with retail giants like Amazon launched its strategy “Next generation fulfillment network” through which it ordered customized distribution centers (Zentes, Morschett, & Schramm-Klein, 2012).
The warehouses at Wal-Mart have been trying to test and implementing hydrogen fuel cells for more sustainability incorporation efforts. The pressure on Wal-Mart on its suppliers to provide sustainable supplies is gradually getting more useful results (Banker, 2015). If compared with other retailers, others like Macy’s, Costco, IKEA, Target and Staples, Wal-Mart has been efficient in deploying more on-site installed solar capacity. Though it does not seem to be doing the same as Costco, Target, and Safeway, still Wal-Mart is in the right direction (Makower, 2015).
5- Based on basic strategic trends in retail sourcing, new responsibilities are increasingly emerging for retail buying. In general, retailers whose strategies involve consistent customer orientation are finding marketing and sales (category management) increasingly important at the expense of buying. Identify three of these strategies. Discuss in detail.
Based on the trends of the primary strategies in retail sourcing, there are various new strategies emerging in the retail buying sector. More generally, the retailers who are more focusing on customer orientation are increasingly finding the category management more and more crucial. However, the growing process orientation is evident in the changing nature of the relationship of the retailer and suppliers. Where price was a critical negotiating factor, logistics, customer-oriented supply chain and market conditions have specifically become necessary for the retailers. The retailers now need to align their processes in the context of the electronic sourcing to better cope with the competitive market efficiently.
The emergence of the international purchasing organization offering to source across a group of companies has caused immense competition among suppliers. The aspects of corporate culture have been changed now with the introduction of e-procurement. In current times, the companies are crucial to their supply security and social responsibilities (Zentes, Morschett, & Schramm-Klein, 2012, p. 389).
References
Banker, S. (2015, April 27). Walmart Has One of The World’s Most Sustainable Supply Chains? Really? Retrieved from https://logisticsviewpoints.com/2015/04/27/walmart-has-one-of-the-worlds-most-sustainable-supply-chains-really/
Ciciora, P. (2013, Jan 24). Study: Store layout an important variable for retailers. Retrieved from https://news.illinois.edu/blog/view/6367/204901
Makower, J. (2015, Nov 17). Walmart sustainability at 10: An assessment. Retrieved from https://www.greenbiz.com/article/walmart-sustainability-10-assessment
Snyder, B. (2016, Feb 23). Customers Are Furious With Starbucks’ New Rewards Program. Retrieved from http://fortune.com/2016/02/23/starbucks-rewards-program-changes/
Zentes, J., Morschett, D., & Schramm-Klein, H. (2012). Strategic Retail Management: Text and International Cases. Springer.
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