The Changing Face of Retailing

This report provides a detailed idea about the departmental and discount stores, their merchandising and marketing strategies, historical background, mergers, diversification, downsizing, cost containment, value-driven retailing, scrambled merchandising, and future of retail industry in Australia.

Running head: THE CHANGING FACE OF RETAILING
The Changing face of Retailing
Name of the Student:
Name of the University:
Author Note:

1THE CHANGING FACE OF RETAILING
Executive Summary
The objective of this report is to provide a background about the historical development of
departmental and discount stores. The paper gives a detailed idea about the departmental and
discount stores, giving details about its merchandises and the marketing strategies adopted by
them. The paper addressees the concept of merger, diversification and downsizing of the
research firm. It also highlights the concept of cost containment and value driven retailing
driving forces. The paper introduces the readers with the theory of scrambled merchandising.
The report further analyzes the future of retail industry in the next five years highlighting the
concepts of wheel of retailing and retailing life cycle.

2THE CHANGING FACE OF RETAILING
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Historical Background...........................................................................................................3
Overview of Departmental and Discount Stores....................................................................4
Merchandising and Marketing of Departmental and Discount Stores...................................5
Mergers, Diversification and Downsizing.............................................................................6
Cost Containment and Value-Driven Retailing.....................................................................7
Concept of Scrambled Merchandising...................................................................................7
Future of Retail industry in Australia.....................................................................................7
References..................................................................................................................................9

3THE CHANGING FACE OF RETAILING
Introduction
A vast retail trading organization is known as a departmental store. A departmental
store is so called because it has many organized departments. These departments are
categorized according to the type of goods sold. The discount stores are departmental stores,
which offer products at lowered rates or cheap rates. The report gives a detailed idea about
the departmental stores and the discount stores detailing about their functioning, their
merchandise and their marketing strategies. The paper also sheds light to the historical
background of the departmental and discount stores. The paper discusses about the mergers
of these departmental and discount stores and it further analyzes the driving force behind
these stores. The future of the departmental and discount stores has been discussed and
analyzed in this paper. The paper also addresses the concepts of wheel of retailing and retail
life cycle. The paper also explains the concept of scrambled merchandising.
Discussion
Historical Background
The departmental stores were established in the second half of the 19th century in the
major cities around Europe, Australia and North America. In Australia David Jones Limited
was one of these established departmental stores during this phase. These retail stores were
built in the urban environments. The departmental stores that persisted for a longer duration
of time are David Jones,Myer and Grace Bros .Till the year 1970 these departmental stores
used to offer the customers with exclusive credit cards by which customers could buy
products goods from their stores and its branches . However, by 1974 the banks started
launching bank credit cards by using which the customers were able to shop wherever they
wished to.

4THE CHANGING FACE OF RETAILING
The departmental store, David Jones started segregating their departmental store into
several departments based on clothing, shoes and hardware. The comparatively smaller stores
of Australia started following these trends of dividing departments. Some of the department
stores based in Sydney that includes David Jones Limited and E. Way & Company became
the leaders in retail trade .With their flawless service, appealing infrastructure and decors,
they became the household name for the city and throughout Australia.
Overview of Departmental and Discount Stores
Departmental stores are retail stores, which are on large scale, and under one-roof.
The departments of the departmental stores are categorized into several departments offering
individual goods. In other words, departmental stores is a part of retailing business and it is
responsible for handling variety of shopping and the stores are segregated into separate
departments with the objective of promotion and operation of store . In future the department
stores are endeavoring to extend and add departments of sports goods, automotive parts and
provide services departments that will include income tax advisory, travel advice and others.
The departmental stores can be classified based on the ownership and income groups, based
on the ownership they can be divided into – independent, ownership group and chain
department stores .On the other hand based on the income groups they cater their goods and
services to high middle and low-income group of people.
Discount stores are stores of general merchandising and self-service (Berg, 2014).
They offer wide range of goods, which includes, house wares, clothing, sports accessories
and motor vehicle parts .They offer products and goods at a low price rates. The discount
stores buy their goods from the manufacturers as well as the distributors of wholesale.

5THE CHANGING FACE OF RETAILING
Merchandising and Marketing of Departmental and Discount Stores
Then various activities that aids in the sale of products to the retail customers are
known as merchandising. Merchandising plays a very important role in luring the customers
to the stores and making them to purchase the goods resulting in increase of sale and
generation of revenues (Varley, 2014).
David Jones Limited situated in Australia is arguably the oldest department store in
the world .The departmental stores generally offers wide range of products categorized in
various structured departments .The merchandise of departmental stores includes clothing,
accessories for children and adults, house wares, electrical and electronic goods, sport
accessories, appliances, furniture and food. The departmental stores are also categorized
based on the type of merchandise they carry .The categories include general merchandise,
discount, fashion and specialty. The merchandise offered by the discount stores are similar to
that of the departmental stores .However, the discount stores offers products at a cheaper rate
than the typical market price of products.
To market their products the departmental stores and discount stores implements
many marketing strategies. Some of the strategies include:
 Improving the Merchandise: The best way to attract the customer and
consumers is, by maintaining proper and attractive merchandise. It is very
important to update the store with right kind of merchandise.
 Window Display: To attract the customers the window and the curbside of the
store offers many scope (Hamilton, Spencer & Ring, 2013). It is very
important to update the items and goods in the window display frequently like
once in a month or sometimes in a week if it is a holiday season.

6THE CHANGING FACE OF RETAILING
 Marketing by making key partnership –The departmental and discount
stores often collaborates with the local business to popularize the brand name
of the store.
 Social media platform – The departmental and discount stores often make
use of the social media platform like Facebook, Instagram and Pinterest for the
promotion of their products and reaching out to the customers (Jarad, 2014).
Mergers, Diversification and Downsizing
In order to sustain in the very competitive retail industry they departmental and
discount stores are using mergers and diversification to strengthen the growth of sales.
The mergers involve merging of several retail firms, which are owned separately. One
such example of merger was between two department store chains Sears and Kmart based in
the United States. This is the example of merging of different type .On the other hand
merging is possible between same type also .There are various advantages of merging which
includes improvement of productivity and bargaining power, curtailing the weakness ,jointly
maximizing the resources and also gaining an advantage in the market .
The diversification involves addition of stores for providing different stores and
services. The diversification in retail industry provides an opportunity for the retailers to
become active in business from their normal mode of operations (Oh, Sohl & Rugman,
2015). Many small retail departmental stores have grown in size because of the mergers and
diversification.
Downsizing is also important in retailing industry (Jung, 2014) .There have been
instances when then retailers have over-extended their business and stores and faced many
problems. On the other hand certain retail firms like Barnes & Noble have persisted with the

7THE CHANGING FACE OF RETAILING
concept of downsizing .they have less number of stores and they are large in size .Some retail
firms prefers to stay within national boundary than being global.
Cost Containment and Value-Driven Retailing
Many retailers have followed cost containment approach in order to limit the initial
investment, operational costs, construction cost and maximize the productivity (Akbar &
Ahsan, 2014). Many retail firms use the approach of cost containment in order to combat the
intense competitions from the firms offering lot of discount.
In the retail industry, the word value describes price, quality and service .The process
is very important aspect in retailing .Because of the discounted price offered by the discount
stores, customers are encouraged to buy goods and products from them instead of going to
traditional market. Thus, value driven retailing is the driving force behind these departmental
and discount stores.
Concept of Scrambled Merchandising
In order to get more customers to their stores and with the intention of earning more profits
and for targeting different practices ,some retail firms often follow the approach of scrambled
Merchandising . The scrambled merchandising involves selling of goods or merchandise,
which are sold in different shop (Mukherjee, Cuthbertson & Banerjee, 2013). The approach
of scrambled merchandising can have a negative impact on the customers as they become
confused about the merchandise being offered by a particular retail store.
Future of Retail industry in Australia
The retail industry of Australia is facing a lot of disturbances (Célérier & Vallée
2013).Many overseas business have entered the Australian retail industry and with their
advent they are carrying and bringing various new approaches .With the change in the retail
landscapes ,a change has been noticed with the customers as well. The customers have

8THE CHANGING FACE OF RETAILING
become well informed about the latest technology and they have become wealthy. However,
the Australian retail industry is still thriving amidst various disturbances from overseas. In
order to sustain and thrive in the retail industry market of Australia it is important to
understand the demand and needs of the customers and plan accordingly.
In the next 5 years, new opportunities will come up in the retail industry marketing from the
Internet of Things (IoT) ( Chakraborti & Sanyal, 2015). It is also expected that mobile
commerce (mCommerce) will also become an important aspect of retailing industry in
Australia. The retail sector is the moist dynamic sector as the environmental changes
influence the retail market a lot. It is expected that a new retail come up in the Australian
market from time to time and will be taken over by large retail chains. This is similar to the
concept of Wheel of Retailing (McCormick et al., 2014). It has four steps, the first step
involves establishment of a firm and entering into the market. The second step involves
extending and expanding the market. In the third stage, the company has already established
itself and stabilizes its position. In the fourth and the last step, the new competitor enters the
retail market and brings down the original retail company already present in the market
(Fernie, & Sparks, 2014).
This concept is similar to Retail Life Cycle theory where the retail firms show an S-shaped
development curve and it has four phases that includes innovation, acceleration, maturity and
decline. The theory explains how the retailer grow rapidly within short duration of time and
after some time due to advent of new stores the earlier existing retail stores decline .

9THE CHANGING FACE OF RETAILING
References
Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian
retail firms. International Journal of Managerial and Financial Accounting, 6(4),
375-396.
Berg, B. (2014). Introduction. In Retail Branding and Store Loyalty (pp. 1-26). Springer
Gabler, Wiesbaden.
c. Capturing the uncertainties of retail development: The case of emerging markets.
Célérier, C., & Vallée, B. (2013). What drives financial complexity? A look into the retail
market for structured products.
Chakraborti, S., & Sanyal, S. (2015). Heuristic Algorithm using Internet of Things and
Mobility for solving demographic issues in Financial Inclusion projects. arXiv
preprint arXiv:1503.00369.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Hamilton, C., Spencer, W., & Ring, A. (2013). U.S. Patent No. 8,429,004. Washington, DC:
U.S. Patent and Trademark Office.
Jarad, G. A. (2014). Marketing over social media networks'. Marketing, 6(13).

10THE CHANGING FACE OF RETAILING
Jung, J. (2014). Shareholder value and workforce downsizing, 1981–2006. Social
Forces, 93(4), 1335-1368.
McCormick, H., Cartwright, J., Perry, P., Barnes, L., Lynch, S., & Ball, G. (2014). Fashion
retailing–past, present and future. Textile Progress, 46(3), 227-321.
Mukherjee, M., Cuthbertson, R., & Banerjee, M. (2013). Capturing the uncertainties of retail
development: The case of emerging markets.
Oh, C. H., Sohl, T., & Rugman, A. M. (2015). Regional and product diversification and the
performance of retail multinationals. Journal of International Management, 21(3),
220-234.
Varley, R. (2014). Retail product management: buying and merchandising. Routledge.