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A Business Motive - a Challenging Environment

Essay by   •  April 18, 2012  •  Essay  •  438 Words (2 Pages)  •  1,607 Views

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A Challenging Environment

Soft goods specialty retailers face a crowded marketplace that is steadily becoming even more competitive. Most shoe specialty stores are faring far worse than the apparel specialists in the competitive wars. Off-mall retailers, including discount department stores/super centers and Kohl's (www.kohls.com), are capturing apparel and shoe share of preference at expense of mall-based retailers, including specialty stores. Consumer preference for purchasing apparel is strongest at discount stores/super centers.

The upward trend for discounters contrasts with a decline in spending preference for clothing at apparel specialty stores, value department stores, and traditional / upscale department stores in the same time period. For shoe purchasing, shoe stores are actually gaining spending preference, although the price-driven discount store/super center channel is as well. Shoe, discount, and apparel specialty stores are capturing shoe spending preference from value and traditional department stores, particularly Sears (www.sears.com) and Dillard's (www.dillards.com), as well as Payless (www.payless.com). The upward trend for discounters contrasts with a decline in spending preference for clothing at apparel specialty stores, value department stores, and traditional / upscale department stores in the same time period. For shoe purchasing, shoe stores are actually gaining spending preference, although the price-driven discount store/super center channel is as well. Shoe, discount, and apparel specialty stores are capturing shoe spending preference from value and tradition al department stores, particularly Sears (www.sears.com) and Dillard's (www.dillards.com), as well as Payless (www.payless.com).Although department stores have suffered the most at the hands of off-mall retailer growth, many are reinventing themselves. Key elements of the department store reinvention include a stronger, more exclusive, and more differentiated brand and style assortment supported by upgraded, easier-to-shop stores. Thus, department stores now contribute to more competitive intensity in the apparel and footwear playing filed, particularly for upscale customers. The profile of monthly shoppers at traditional/upscale department stores is similar to that of monthly shoppers at apparel specialty stores in terms of higher income and education levels - although apparel store customers skew younger.

Competitive battles are also escalating due to the entry of a number of foreign specialty store retailers to the marketplace. Though most of the new foreign players operate only a handful of U.S. stores at this point in time, several intend to ramp up their store openings after establishing an initial base of stores.

Some suppliers are also branching out to target new customers with new specialty store chains to attain growth in the face of modest prospects at department stores.

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