How is the Internet affecting Retail Department Stores?

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Today, retailers face a tremendous amount of competition, more than ever before. The Internet has allowed millions of new startup retailers to launch with minimal resources. Some of these new Internet retailers do not even warehouse their own products, they simply drop ship other retailers products, making it much easier for them to keep their resources low and use their revenue made from sales to put back into marketing of their websites.

So as all these new retailers are born, how does this affect the larger retail department stores like Macy's, Sears, Nordstrom, JC Penny, and Bloomingdale's? Well according to an article I found on the Denver Post website, "Researchers say department stores are losing customers - particularly younger ones, who tend to favor big-box discounters, specialty boutiques and the Internet - because their merchandise is widely available elsewhere and service levels have slipped."

So what does this mean for these major department stores like Macy's? Well in my option, it means that they need to reduce their prices in order to compete. If the younger generation is moving more towards making purchases online, then these department stores need to cut their prices in order to become competitive players once again. Everyone would rather try on a new pair of jeans, rather than make a blind purchase off the Internet; however, if it means saving $30, I and many others, would rather make the purchase from an online retailer and if it doesn't fit, we will merely return it... no biggie.

These department stores are also beginning to compete in the sense of aesthetics. In these highly competitive times, retailers are embracing aesthetics and design with renewed emphasis. Some of the biggest names in retailing have poured millions into store makeovers, including Macy's, which just completed the conversion of six former area Jones Stores. An article on The Kansas City Star, explains how these large department stores are changing their designs in order to draw in more people and increase sales in their stores once again.

So as you can see, this is an extremely volatile time for department store retailers like Macy's, Sears, Nordstrom, JC Penny, and Bloomingdales. The Internet has become so competitive that the major department stores are losing money at an increasing rate. Even the prices on their websites cannot complete with some of these other online retailers. The time is now for these department stores to change their design, revamp their image, compete in aesthetics, and reduce their prices once and for all... for survival is on the line.

 

Daryl H. Bryant is President and Chief Executive Officer of Hudson Horizons, helps his clients achieve online success through search engine marketing and customized website solutions.

 

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