Case Study Hot Topic Incorporated, located in City of Industry, California, is a retailer that licenses various products, such as T-shirts, clothes, and accessories geared toward alternative and pop culture with an emphasis on modern music trends. The average age of the employees at Hot Topic is 25 years old.
Hot Topic Incorporated reaches its customers through its two retail store lines—Hot Topic and its sister store, Torrid. Hot Topic offers a myriad of cultural items as well as accessories and clothing aimed at a younger market segment. Torrid is a fashion store offering modern, trendy clothing catering to plus-size women. The organization has been cited on the “Best Small Companies” and “Best Companies to Work For” lists many times over its 20-plus year history.
Former CEO Betsy McLaughlin believes that the culture at Hot Topic is based on a passion for a concept. For Hot Topic, that passion is music, and for Torrid, it is fashion. McLaughlin says that the passion for the products and the inspiration behind them is what makes Hot Topic different from many others, and the passion that drives the culture is shared across all levels and positions of the organization. In fact, McLaughlin claims that music inspires not only the products they sell, but also store design and even the people they hire.
Hot Topic has a unique corporate culture, but structurally does not differ tremendously from other organizations. Employees are fiercely loyal to the firm as a result of the great working environment where they feel they can “fit in” and be appreciated for what they contribute to the organization. One example of how Hot Topic encourages fitting in is its “concert reimbursement” program. Employees can attend a concert and bring someone with them, fill out an expense report, and be reimbursed for the cost of their tickets. The only requirement for this benefit is to submit a “fashion report.” The culture also values collaboration, open communication, and empowerment, and is perpetuated by a lack of walls and doors in the corporate headquarters. Everyone works in one big room and shares space, taking emphasis off hierarchy and promoting collaboration and open communication. The employees are supported in risk-taking decisions when taking care of the needs of customers. This gives employees a feeling of inclusion and empowerment to make decisions.
Hot Topic has grown from 15 stores just 15 years ago to nearly 800 stores today. This provides a ready applicant pool to allow the company to hire for corporate jobs from within—a practice that has the worker bring her or his sense of the corporate culture to the new job. Employees are kept satisfied through such perks as cell phone discounts, on-site massages, health fairs, scholarship reimbursement, and “employee of the month” programs. Another interesting and no-cost perk offered to employees is the “9/80” program. This program allows employees to work 80 hours over 9 days—giving them a three-day weekend every other weekend.
Senior executives talk to employees and customers to learn in what direction they want Hot Topic to go. This along with all of the innovative ideas and programs provides Hot Topic with a unique culture that helps keep their employees and customers satisfied and loyal.
Questions for Discussion
1. What makes Hot Topic so successful as a retailer? What makes them so popular with their employees? How can they keep their success going?
2. How does the idea of no walls and no doors in the corporate headquarters encourage the culture Hot Topic is trying to perpetuate? Do you think you would like to work in such an atmosphere?
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