Team Assignment

Problem Identification Project (Team A)

Eric, Junior, Elvis, Jeff

PHL 320

20 April 2017

Thane Messinger

Problem Identification Project (Team A)

A seismic event has changed the landscape of the retail world within the past few years. Long standing stores like Macy’s and Sears are closing down all over the nation. This disturbing trend is by no means a North American one. In an internet business article from the Guardian, a division of their British news media, cite a similar economic collapse of their traditional stores also. The author of the article writes, “The PWC and Local Data Company report found that 2,656 outlets closed on Britain’s high street in the first half of the year. The was a rate of 15 stores a day, up to 14 a day in the same period in 2015 (Ruddick, 2016).”

What are some of the factors that are changing the ways we buy goods and services from how we did business in the past? Could it be a cultural shift, regarding how baby boomers or millennials prefer to do their shopping in person versus making the same transaction via E-Commerce like Amazon? Most likely, it is also a financial one. With cost reduction from paying store employees, for example, it is often less expensive to purchase things online than actually driving across town to buy the same thing from a retail store. One fact is sure. Traditional shopping at brick and mortar institutions are losing out to people shopping online instead.

Baby boomers are comfortable both browsing and shopping online. Baby boomers also prefer one on one interaction with retailers; but they also love coupons, sales, and loyalty discounts. Generation X prefer digital channels. This generation’s most important channel is email, social media (Facebook and Twitter). Loyalty programs are a great way to get this generation into the stores. Millennials are content media driven for shopping guidance. This generation can be accurately described as always being perpetually online, social and mobile. Millennials are also inspired by people who share a similar interest: word of mouth advocacy and referrals are extremely important to them. Marketing to these two latter generations should be blended with rich data and insight to empower the marketers to reach their ideal customer base.

Time is a big factor for many people choosing the online option versus the traditional store shopping method. We live in a technically influenced world. The tool that connects the technology is the internet. The internet is a fantastic tool, which enables us to reach to anyone, anywhere in the world. A modern consumer does not have time to waste, driving to the post office or waiting in line. Ninety-nine percent of the time of what we do on the internet is designed to make our lives more convenient and letting us know the latest product or service available. The web also has populated our minds with advertisements that are intended to speed up and organize our way of life. Online retailers know this, so they will market their products to grab our attention. A key platform is social media website. The millennials love this method of shopping because it saves time. This method of marketing has made tremendous profits for online retailers. While this technique has worked beautifully for online business, it has been a devastating one for traditional brick and mortar companies.

The last major factor that has changed the way we do our shopping is it often much cheaper to buy products online. Because many on-line retail stores don’t operate with same the financial overhead as the traditional stores do (payroll, benefits to employees, electricity for the stores, etc.), they can keep their prices low. When online retailers also offer shipping and delivery of goods free to the customers, it makes it nearly impossible for the traditional stores to compete . On the other hand, certain expensive and high-end products such as business suits, expensive watches, elegant dresses will still be purchased by the customers at the local premises.

References

Ruddick, G. (2016, October 24). Britain high street under strain.  The Guardian .