Upload
stephen-exeter
View
17
Download
0
Embed Size (px)
Citation preview
A COMPLETE ANALYSIS OF THE BIG BOX RETAIL INDUSTRY FROM
1962 TO 2016
BY: STEPHEN EXETER
From Big Box to Inbox
Outline
Inception of big box retail – 1962Growth & customer impactLeadership decisions / Failed ideasSizing up the industry from 1990 – 2005Internet sales
AmazonTransitioning to small boxConclusion / Recommendations
Early 1960’s
1962 – Creation of Wal-Mart, Target, & KmartParadigm shift
Regulations on discounts Limited manufacturer input
Perfect economic timing“Corner store blues”
Growth & Impact on Customers
Stores by 1970 Wal-Mart - 38 Kmart - 180 Target - 40
Sales by 1970 Wal-Mart $44.2M Kmart $2.2B Target $53M
New business entry in 1977 was at 17%Beat the recession of the 1980’s
Leadership Decisions
Customers wanted year round optionsAdvertising
Newspaper (lucrative)Planogram
TargetStrategic geographic locationsCopycat market
Failed Ideas & Issues
Best Products – ShowroomWoolco – Took on too much debtCircuit CityKmart cutting customer service / Loyalty
programPolitical change by the end of 1990’s
Sizing up the industry 1990-2005
Continued growth for Wal-Mart and TargetWal-Mart becomes largest retailer in the
worldBeginning of financial issues for KmartCreation of internet
Amazon eBay
Market Share 1990-2000
Amazon
Went public in 1997 – reported $147M in sales
First year to turn profit – 2003Mimic big box stores without physical
locationEliminated overhead in nearly every facetBy 2004 they reported sales of $6.92B and
had expanded into almost every sales category as the other big box stores
Amazon – Diversification Strategy
2015 Net Income of $596MDrone deliveryIntegrating their own delivery branchWeb services / Cloud computing Amazon PrimeWarehouse / logistics innovation
From Big Box to Small Box
This is becoming the trend in the big box industry
TargetBest Buy kiosksWal-Mart Express
Already established Dollar Stores
By The Numbers
Shipping Costs
Busiest Shopping Day of the Year
Conclusions
Logistics expertsMissed the opening for online dominationMarket saturationInconvenient experienceIncrease in labor / Generational changeCan no longer win on price
Recommendations
Innovative ways to recycle old buildingsSolar energyPersonalization
Sharable experiencesDistribution optionsBeat Amazon and others at their own game
Online focus Recruit millennials
References
Johnsen, M. (2016, February 25). Kmart realizes full-year sales decline of 15.6%, but compsmoving in right direction. Retrieved August 12, 2016, fromhttp://www.drugstorenews.com/article/kmart-realizes-full-year-sales-decline-1-comps-moving-right-direction
Kielar, A. (2015, August 4). No More “TargetExpress” Or “CityTarget,” Just Small Target
Stores. Retrieved August 15, 2016, from https://consumerist.com/2015/08/04/no-more-targetexpress-or-citytarget-just-small-target-stores/
Kohlstedt, K. (2016, June 27). Ghost Boxes; Reusing Abonded Big Box Stores Across
America. Retrieved August 16, 2016, from http://99percentinvisible.org/article/ghost-boxes-reusing-abandoned-big-box-superstores-across-america/
Lam, B. (2016, May 11). Why the Biggest Big-Box Stores Survive. Retrieved August 28, 2016, from http://www.theatlantic.com/business/archive/2016/05/big-box-future/482211/
Lee, M. (2015, April 15). The American Economy of the 60s and 70s. Retrieved August 02, 2016, from http://classroom.synonym.com/american-economy-60s-70s-11277.html
References
Rivlin, G. (2005, July 10). A Retail Revolution Turns 10. Retrieved August 10, 2016, fromhttp://www.nytimes.com/2005/07/10/business/yourmoney/a-retail-revolution-turns-10.html?_r=0
Schoenberger, C. R. (2002, January 18). How Kmart Blew It. Retrieved June 9, 2016, from
http://www.forbes.com/2002/01/18/0118kmart.html Sidel, R., Yadron, D., & Germano, S. (2013, December 19). Target Hit by Credit-Card Breach.
Retrieved August 17, 2016, fromhttp://www.wsj.com/articles/SB10001424052702304773104579266743230242538
Thomas, A. R. (2016, January 18). 5 Lessons from Walmart's Decline. Retrieved August 9,
2016, from http://www.industryweek.com/companies-executives/5-lessons-walmarts-decline Udland, M. (2016, March 15). Amazon today is like Walmart in the 1980s, and that should scare
anyone in its way. Retrieved July 18, 2016, fromhttp://www.businessinsider.com/amazon-planning-world-domination-2016-3
Wailgum, T. (2007, October 17). 45 Years of Wal-Mart History: A Technology Time Line.
Retrieved August 9, 2016, from http://www.cio.com/article/2437873/infrastructure/45-years-of-wal-mart-history--a-technology-time-line.html
References
Wolf, G. (2006, September 15). Kmart Corp. Retrieved August 9, 2016, fromhttp://www.encyclopedia.com/topic/Kmart_Corp.aspx
Yarow, J. (2013, October 28). Former Amazon Employee Explains How The
Company's Business Model Really Works. Retrieved August 11, 2016, fromhttp://www.businessinsider.com/amazons-profits-what-people-dont-understand-2013-10
Yohn, D. L. (2016, June 22). Big-Box Retailers Have Two Options If They Want to Survive. Retrieved August 28, 2016, from https://hbr.org/2016/06/big-box-retailers-have-two-options-if-they-want-to-survive
Zmuda, N. (2012, March 19). Walmart, Target, Kmart, Kohl's Lead 50 Years
of Retail Revolution. Retrieved August 16, 2016, from http://adage.com/article/news/walmart-target-kmart-kohl-s-lead-retail-revolution/233379/
Questions