How Has the Economy Affected the Retail Industry

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A detailed research study on the retail industry and how it was effected by the U.S. recession in 2008-2009.

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How Has the Economy Affected the Retail Industry

  1. 1. How Has the Economy Affectedthe Retail Industry?
  2. 2. Retail Industry Review• 2007 was the start – 40% of consumers were affected in the first year• 2008 Brand Loyalty – Thrown out the window – March 2008 – 67% of consumers bought the brand they wanted – March 2010 - %57 of consumers did the same• “2010 Great American Pantry Study” – 93% Will still spend cautiously – 81% Find it fun to see how much they can save
  3. 3. Introduction• How the economy has affected the retail industry• Created a 15 question survey – Analyzed via SurveyMonkey.com• Sample 4 local malls – Within a 20 mile radius of Lasell College – 88 Retail stores• Distributed surveys to each manager – Personal interview
  4. 4. Objectives What is the affect of the economy on…….• hiring practices/ expansion and downsizing• promotional methods/ pricing strategies• clothing lines• consumer traffic• competition ….in men and women’s retail stores?
  5. 5. Sampling• Clothing stores in the retail industry• Survey• High and low end retailers• 4 malls in the Boston area• Phone surveys V.S. Walk in surveys
  6. 6. Methodology• Our Objectives• Split into Groups• Assigned 12-14 Stores Each• Designated Malls• Create Surveys• Distribute Surveys• Analyze Results
  7. 7. Methodology • Face to face • Managers • Explaining our research • Confidential & Anonymous • Timing = Key
  8. 8. Data Analysis•hiring practices/ expansion and downsizing•promotional methods/ pricing strategies•clothing lines•consumer traffic•competition
  9. 9. Hiring Practices Expansion/Downsizing Which has occurred more recently within the last three years for any of your greater Boston Locations?  A new store has opened.  An existing store has closed.  Neither− All 47 participants responded− 46.8% (22) = Neither− 31.9% (15) = New store has opened− 21.3% (10) = Existing store has closed
  10. 10. Are you currently:  Hiring new employees?  Letting employee’s go?  Neither? – 30 participants responded – All said they were hiring – Managers = 14 checks – Sales associates = 27 checks – Cashiers = 12 checksApproximately how many?  1-3  4-7 − Follow up question − 30% (9) = 1-3  8-10 − 26.7% (7) = 4-7  >10 − 10.0% (3) = 8-10 − 33.3% (10) = >10
  11. 11. Promotional Methods 33 % %-Discounts 22% Both 22% None 11% BOGO 11% Other
  12. 12. Promotions/Media Outlets 1-5 Sales/ Year May be controlled by CorporateIn-Store = OnlineTechnology = Less $ cost
  13. 13. Pricing Strategy Waiting period remained the same1-4 Months Wait to Mark DownSeasonal ChangesQuarterly Sales
  14. 14. Inventory The poor conditions of the economy have had a negative effect on our inventory levels.•37% Slightly Agree•26.1% Strongly Disagree•61.9% in total Agree•39.1% in total Disagree
  15. 15. Clothing Lines Since the economic downturn, has there been increase, decrease or no change in in new clothing lines entering your store?•43.2% Have seen an increase•11.4% Have seen a decrease•38.6% Have seen no change•6.8% Responded other
  16. 16. Consumer TrafficFor every 10 customers that come into your store, how many of them actually make a purchase?  0-2  3-5  6-8  All 10− 42 participants responded− 35.7% (15) = 0-2− 40.5% (17) = 3-5− 23.8% (10) = 6-8− 0% (0) = All 10
  17. 17. What is the average purchase total of the customers from question 11?  $25 and lower  $25-$50  $50-$100  $100 and higher  Other − Follow up question − 0.0% (0) = $25 and lower − 14.3% (6) = $25-$50 − 31.0% (13) = $50-$100 − 52.4% (22) = $100 and higher − 2.4% (1) = Other
  18. 18. CompetitionQuality 55.6% $ to go a long wayPrice 22.2% Bad economy don’t want to spend too much Want quality at the same timeOther 11.1% Brand name Loyalty to store Quality?Bottom two results: Location 1 response Shopping mall no competitive advantage Variety offer the same clothes with similar clothing lines isn’t much differentiation
  19. 19. Competition • Disagree 39.1% (18) • Slightly Disagree 23.9% (11) • Slightly Agree 17.4% (8) * The top three answers only had a 7 response difference each
  20. 20. Competition • Slightly agreed (11) responses making up 23.9% • Slightly disagree (10) at 21.7%. • Very close results • Possible confusion to the question?
  21. 21. ConclusionRetail Stores Are:• Hiring, Not Firing – More than 10 people – Stores not Closing or Opening• Using Pricing Promotions – 1-5 Sales/Year – In Store & Online Promotions – Wait 1-4 Months to Mark Items Down• Agreeing Economy = Negative on Inventory – No change/ Increase in inventory levels. ???
  22. 22. Conclusion Retail Stores Are:• Making Less Sales – 0-5 of 10 customers make a purchase – Purchase Total = $100+• Focusing on Quality – Quality is most competitive advantage• Enjoy location in the Mall – Disagree they’d be more competitive elsewhere• Disagree & Agree on Recession – Recession= Bigger threat to stores than competition
  23. 23. Limitations• Facing rejection• Incomplete surveys• Group time management• Store time management• Phone Calls
  24. 24. • How the retail industry • Learned from trial and is affected by the error. economy • Teamwork• How to conduct • Communication research. • Prepared us for the• Challenging and workplace. Beneficial.
  25. 25. References• "Economy Permanently Changes Shopping Habits - Retailer Daily." Retailer Daily: News & Data for Retailers, Ecommerce Managers, Their Suppliers and Partners. Web. 24 Feb. 2011. <http://www.retailerdaily.com/entry/52535/econom y-changes-shopping-habits/>.
  26. 26. Questions?

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