Evolution Of Department Stores And Discount Stores In Australia

 How department stores and discount stores are evolving. This report should cover the historical development of department stores and discount stores in Australia.

 Obviously you would start by defining both of these types of retail institutions and then describe what merchandise they carry and how they market to distinct types or market segments of retail customers. You may like to discuss mergers, diversification and downsizing in your assignment, as well as cost containment and valuedriven retailing being driving forces behind the evolution of these institutions into the retail outlets of tomorrow.

Do you think retailing will be different in 5 years’ time, or in 10 years’ time? Why – what do you think will make these types of store different? Do you think there will be other types of stores that will open up in different markets? Use examples wherever possible to substantiate your opinions in the report. In your answer you also need to refer to the wheel of retailing concept, and the retail life cycle. You will also discuss ways in which shops assemble their merchandise for consumers, such as scrambled merchandising.

Definition of Department Stores and Discount Stores

The report helps in the analysis of the reasons for changing face of the retail stores in the current scenario. Proper analysis of the evolvement of the discount and department stores are required to be analysed along with the analysis of the historical development of department and discount stores is required to be analysed effectively. The analysis of the importance of the different criteria in development of the retail stores is essential for determining the other related components which are necessary in development of departmental and discount stores.

The discount store is defined as the store which helps in selling different kinds of products and services to the different customers which are lower than the typical market price (Alftan et al., 2015). The discount stores are different from the variety stores as in the discount stores, the prices can be dropped due to the efficient kinds of distribution method. There are different large kinds of discount stores which are the different chain stores inclusive of Woolworths and Coles and these companies try to provide and sell the different products at an affordable rate to the customers.

On the other hand, departmental retail stores are defined as the large kind of retail establishment with extensive kind of assortment which deals with variety of goods and services which are being organized in separate department. Furthermore, this can be seen and analysed that all the departments in the organizations are stored under the same roof in order to facilitate customer service, buying along with merchandising of the goods and services effectively and this is made available to the different customers in the market (Bell, Gallino & Moreno, 2015).  

As commented by Alftan et al., (2015), the first departmental store named Bon Marche was set up in the year 1852 in Paris. The respective departmental store was set up and this was revolutionized by highly relying at time by relying on the volume and not the high mark up. Furthermore, Fernie & Sparks (2014), has commented and analysed that the emergence of the self-service has started in the year 1916 and this helped in reducing the different costs as only few workers were required to service the different customers in an effective manner.

On the other hand, Baker & Saren, (2016), has commented that departmental stores were emerged in the year 1930 and the first hypermarket was emerged in France in the year 1963 and there were new formats which were introduced by the department stores and there was self-service system which was being followed by the companies in order to meet the demands of the customers in an effective manner.

Historical Development

The merchandise is different discount and department stores which are required to be analysed in order to understand the different kinds of framework of retailing in both the stores as well. The strategies of retailing along with concepts of relationships and value in retailing is required to be identified and analysed effectively (Fernie & Sparks, 2014).

In the discount stores, this has been seen that discount stores tries to offer merchandise for the discounted prices and this is seen that discount stores are known as type of department stores as both of them tries to offer various kinds of goods while others specialise in selected kind of merchandise stores in the market. Discounted and departmental stores are quite closely related to one another and the discount stores tries to offer the individuals with different kinds of products and services to the different customers at an affordable rate (Baker & Saren, 2016).

In Discount Stores, this can be seen and analysed that there are various types of the products which offers the customers with different kinds of products at a cheaper price in comparison to the other stores in the vicinity (Gandhi, Shaikh & Sheorey, 2017). The discount stores are the type of retail stores which tries to offer merchandise which is provided at discounted price in comparison to the other stores which are high fashioned in nature. Moreover, discounted stores offer many types of products from different brand names and there is no such one particular brand.

The strategy which is being applied by discounted stores apply high volume, low margin strategy which will allow them to offer merchandise as the lower rate in comparison to the other stores in the closer kind of vicinity (Hübner, Wollenburg & Holzapfel, 2016). They try to make the claims as to offer the lowest price in comparison to the other stores which are nearby.  The trend for discount stores has tried to become popular from the World War II when there were different kinds of retail stores realized which people could no longer afford the various spends of lot of money on certain merchandise (Hristov & Reynolds, 2015).

Furthermore, this has been seen and analyzed that the discounted stores are the ones which opted for low profit margin along with high volume products and made the same available to the customers in the market as well. It has been noticed that the discounted stores are being present in different industrialized countries and this is becoming popular in the different developing countries as well (Kim, et al., 2016).

Merchandise and Marketing Strategies

For example- In Australia, there are different kinds of discount retail stores such as Big W, Kmart Australia and Cheap as Chips are the discount stores which sells the different kinds of products and services in the market at lower price than sold in the traditional retail stores in the market. The orientation of the customers is essential in nature which will help in providing the customers with different types of services and make proper relationship with the different customers.

The merchandise which are being followed in department stores is relating to the direct selling of goods and services to the customers. The department stores offer the specialized kinds of items such as clothing along with jewellery or they can offer combination of the different products such as Walmart or Costco (Yawar & Seuring, 2017). The different departmental retail stores in the organization are part of the retail companies which are being situated in various countries, however this has been seen that the departmental stores do not offer any kinds of additional activities inclusive of play areas or food courts as well.

There are different kinds of strategies which are being adopted by department stores which will offer the various goods and services and the department store is sort of one stop shop for the different people who needs their daily products and they get the same under one roof. However, there are different customers who do not purchase products and services as the retail stores are not being placed in an efficient manner and this do not meet the demands of the customers as well (So et al., 2016).

The department store is sort of one stop shop for the different customers in the market and they offer variety of goods and services to the individuals under one roof. Furthermore, there is a similarity in both the shops which includes that when the department stores offer the products at a discounted price, then this will become discounted products and these are being sold by the stores at a huge discount.

For example- Target and Kmart Broadway are the two department stores which are situated in Australia and they keep variety of products in the same roof and this helps the customers in Australia in receiving the products and services under one roof. In Target Company, this has been noticed that customers are being offered with variety of products and services to the customers at an affordable rate and the services which are provided by the company and makes them customer centric is the home delivery system as this increases the presence of the customers in the market as well.

Changes in Retailing

The location has huge importance for the retailer in choosing a particular location in the particular market or area. There are mainly key steps included in the selection of the retail store which are as follows:

• Knowing the position in the market which can be done by decision making process through which the analysis of the existing similar kinds of business can be analysed and this can help in understanding the position in the market along with knowing the different competitors in the market as well (Piotrowicz & Cuthbertson, 2014).
• Evaluation of the potential of the market is required before setting up the business in the particular location as the impacts of the legislation along with demographic features of the business is required to be considered (Varley, 2014).
• Identification of the alternative sites is required to be analysed and this will help in finalizing the process of decision making. During selecting the location, this is essential to understand whether to purchase or lease the land in the area (Hübner, Kuhn & Wollenburg, 2016).

There are different kinds of technologies which are being used in retailing such as ATMS, electronic banking and self-scanning which are being used in Kmart in which this helps the customers in paying for the different kinds of products to the customers in the market (Wang, Sanchez Rodrigues & Evans, 2015).

For example- Woolworths tries to offer self-check out system which helps the customers in making the system much easier and this will be effective for the purchase of the different products and services. Furthermore, in case of merger of Kmart and Target was not successful and this led to the loss of the target customers towards Big W and Wesfarmers in the Australian market.

The cost containment and value driven strategy is being used in the Australian market as this helps in maximising the productivity of the organizations. The retailers in Australian market helps in examining all aspects of business as to streamline processes and costs effectively. For instance- Woolworths tried to include both the concepts in the organization as this has helped the company in becoming successful in encouraging the buyers in purchasing the different products in an effective manner.

This is essential for the different retail stores to identify the different preferences of the customers in the entire market. Furthermore, the appealing to the customers is essential for the retailers in the market as this will help in understanding the behaviour of the customers in the particular geographic area. There are different customers whose budget to purchase the products is less and this can have huge impact on the behaviour of the customers. On the other hand, there are different kinds of special market segments which are required to be identified by the retailers in the Australian market.

• In-Home Shoppers is the first segment in which shopping is discretionary and not necessity. The convenience is the most essential aspect and the main individuals include self-confident young generation (Wrigley & Lowe, 2014).
• Secondly, the online shoppers are the second segment who uses the web for buying and decision-making process. The main target customers include above average income and well educated and convenience is essential as well.
• Lastly, the out shoppers are wherein the customers prefer out of home town shopping and the income and education vary in this respective case as well.

There can be different kinds of changes that can be included in the retailing in the next 5-10 years as there can be inclusion of different kinds of stores in the market. The demands of the customers will be changing and their preferences to buy the products will be changing as well. This can be noticed that after conducting few surveys, this has been found that the company needs to provide better basics such as proper quality, cleanliness and online security to the customers along with hyper-convenience. With the help of digitization, this will help the customers in changing the experience to better as well. The main aspect of the retailers in the year 2020 or in the future is to analyse and provide the demands of the customers on their finger tip and this can be a bug challenge for the retailers as well.

The Wheel of Retailing Concept

Conclusion 

Therefore, this can be concluded that the retail management is one of the essential concepts which is required to be ascertained in an effective manner. Furthermore, there are various types of aspects which are required to be ascertained in an effective manner to manage the different demands of the customers in the competitive market. Furthermore, this has been noticed that the retailers need to identify the various demands of the customers effectively as this will ease them to be more competitive in their approaches in the future.

References

Alftan, A., Kaipia, R., Loikkanen, L., & Spens, K. (2015). Centralised grocery supply chain planning: improved exception management. International Journal of Physical Distribution & Logistics Management, 45(3), 237-259.

Baker, M. J., & Saren, M. (Eds.). (2016). Marketing theory: a student text. Sage.

Bell, D., Gallino, S., & Moreno, A. (2015). Showrooms and Information Provision in Omni?channel Retail. Production and Operations Management, 24(3), 360-362.

Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.

Gandhi, A. V., Shaikh, A., & Sheorey, P. A. (2017). Impact of supply chain management practices on firm performance: Empirical evidence from a developing country. International Journal of Retail & Distribution Management, 45(4), 366-384.

Hristov, L., & Reynolds, J. (2015). Perceptions and practices of innovation in retailing: Challenges of definition and measurement. International Journal of Retail & Distribution Management, 43(2), 126-147.

Hübner, A., Kuhn, H., & Wollenburg, J. (2016). Last mile fulfilment and distribution in omni-channel grocery retailing: A strategic planning framework. International Journal of Retail & Distribution Management, 44(3), 228-247.

Hübner, A., Wollenburg, J., & Holzapfel, A. (2016). Retail logistics in the transition from multi-channel to omni-channel. International Journal of Physical Distribution & Logistics Management, 46(6/7), 562-583.

Kim, S., Park, G., Lee, Y., & Choi, S. (2016). Customer emotions and their triggers in luxury retail: understanding the effects of customer emotions before and after entering a luxury shop. Journal of Business Research, 69(12), 5809-5818.

Piotrowicz, W., & Cuthbertson, R. (2014). Introduction to the special issue information technology in retail: Toward omnichannel retailing. International Journal of Electronic Commerce, 18(4), 5-16.

So, K. K. F., King, C., Sparks, B. A., & Wang, Y. (2016). Enhancing customer relationships with retail service brands: the role of customer engagement. Journal of Service Management, 27(2), 170-193.

Varley, R. (2014). Retail product management: buying and merchandising. Routledge.

Wang, Y., Sanchez Rodrigues, V., & Evans, L. (2015). The use of ICT in road freight transport for CO2 reduction–an exploratory study of UK’s grocery retail industry. The International Journal of Logistics Management, 26(1), 2-29.

Wrigley, N., & Lowe, M. (2014). Reading retail: A geographical perspective on retailing and consumption spaces. Routledge.

Yawar, S. A., & Seuring, S. (2017). Management of social issues in supply chains: a literature review exploring social issues, actions and performance outcomes. Journal of Business Ethics, 141(3), 621-643.

Yu, W., Ramanathan, R., & Nath, P. (2014). The impacts of marketing and operations capabilities on financial performance in the UK retail sector: A resource-based perspective. Industrial Marketing Management, 43(1), 25-31.