HK2042 Retail Management: Evolution and Future Trends in Retail Stores

This essay provides an overview of the evolution of retail stores, specifically focusing on discount and departmental stores in the USA. It traces the origins and development of both types of stores, highlighting key players like Kmart, Walmart, Macy's and Wanamaker's. The essay also discusses the impact of technology and changing consumer behavior on the future of retailing, emphasizing trends such as ultra-fast distribution, the increasing importance of online and mobile commerce, and the need for customized services. It concludes that while online retailers may have advantages due to lower operating costs, traditional retailers will continue to exist but must adapt to technological advancements and evolving consumer demands.

Running Head: RETAIL MANAGEMENT
EVOLUTION OF RETAIL STORES
Name
Professor
Institution
Course
Date

RETAIL MANAGEMENT 2
Introduction
A discount store is a term that is used to refer to a retail shop that sells its goods at a
relatively lower price than the prices in the typical market. A mass merchandiser may be able to
offer a range of an assortment of goods focusing on the price instead of focusing on the service,
the choice within the lines or even the display (Benson & Shaw, 2013). In other cases, the
“speciality” discount store like staples has the capability of specializing in merchandise lines
relying on the bulk purchase and the fair distribution of goods with the aim of keeping the costs
down (Evans, Chatterjee, & Berman, 2017).
A departmental store refers to a retail establishment which offers a vast range of
consumer goods in different categories. In the modern cities, corporate stores appeared in the
19th century and made a new shape to the shopping habits and also the definition of luxury. In
our today’s world, the departmental stores include furniture, home appliances, hardware, the
sporting goods and paint among many others (Resseguie, 2015). Other lines of products which
include books, electronics, baby goods and pets among others are at times included. In most
cases, customers check out near the storefront. However, some stores include sales counter in
every department while other stores are one of many within a more massive retail chain. Other
departmental stores are entirely independent retailers (Evans, Chatterjee, & Berman, 2017). In
the early 1970s, they came under the massive pressures from the discounters and also got
pressure from the e-commerce sites including Amazon. Hypermarkets and discount stores are
similar to the departmental stores.

RETAIL MANAGEMENT 3
Discount stores are not examples of variety stores that sell goods at a single price.
Discount stores sell many products. They offer a wide range of prices. After world war two,
retail establishments started to pursue a high volume strategy with the aim of attracting more and
more customers. The policy led to a renewed interest from retailers stemming from the great
recession of the USA in 2007 which in a way forced the retailers to revisit their approach to the
goods that they wanted. Currently, Aldi is the largest retailer in the world, and it operates
approximately 11,000 discount stores globally (Benson B. P., 2014).
Evolution of discount stores in the USA
Discount stores were trendy in the USA in the second half of the 19th century than the
average supermarkets or even the departmental stores. The most successful ones in that time
occurred in the 1960s, and the discount store chains included Kmart, Carldo and Howard
discount stores among others. Wal-Mart and Kmart started their operations and picked in 1962.
Some other retail companies began new branches as discount store businesses globally (Miller,
2015). A good example is for the case of Woolworth which started the Woolco chain and the
Montgomery store which started the Jefferson store among others. In the 1970s and late 1980s,
the chains created were either closed or sold to larger competitors.
In the United States, the discount stores accounted for 42% of the overall market share in
the year 1987 while in the year 2010 they accounted for approximately 88%. Today, most of the
discounters run supercenters which possessed a full-service grocery store to the ancient
formation. A good example is the Meijer chain in the west that consists of supercenters while the
Wal-Mart and target have given much focus on the format of the 1990s as a factor that
contributed much to their growth. Although the discount stores and departmental stores possess

RETAIL MANAGEMENT 4
different markets and also different aspirations, the current development in the retailing is the
departmental discount stores and an example is the Sears Essentials which is a combination of
Kmart and Sears (Jefferys, 2016). The latter was arrived at after the merging of the two
companies. Some of the discount stores found in the United States of America include Aldi,
Wal-Mart, Target and Roses, Kmart and Shopko among others.
Evolution of Departmental Stores in the United States of America
The first American departmental store in the New York City was Arnold Constable. The
store was founded in the year 1825 and was started by Aaron Arnold who was an immigrant
from Great Britain. This store served as a small good store on the pine street in the New York
City. In 1857, dramatic changes occurred and the store moved to a five-story marble goods
palace, and it was hence known as the marble house. During the civil wars that existed in those
days, Arnold was one of the stores that issued a charge on the bills of credit to its prospective
clients (Gereffi, 2015). The store was hence recognized as an emporium for the good quality
fashions. Within a short period, the store had already grown, and it outdid the marble house, and
it erected an iron building on Broadway and the 19th street by the year 1869. This trading area
expanded over the years till the owners saw it was good to move to a new space which was
relatively more significant. In the year 1925, Arnold Constable merged with Stewart and
company and enlarged to the suburbs. The first store after the expansion was Rochelle, New
York and then afterward into Hempstead and in New Jersey. However, financial shortcomings
led to bankruptcy in the year 1975 (Wong & Sohal, 2015).

RETAIL MANAGEMENT 5
In the year 1846, Alexander Stewart founded the Marble Palace on Broadway that existed
between chambers and Reade streets. This businessman offered the European retail merchandise
at prices that were fixed on a range of goods and promoted a policy of free entrance to all
prospective buyers. Even though it was clad in the white marble to be a perfect replica of a
Renaissance palazzo, the cast iron of the building permitted plate glass windows thrown iron that
made seasonal displaying easier and especially during the Christmas season (Kumar, 2016). In
the year 1862, Stewart put up a brand new store on a city block that had eight floors and nineteen
departments of glass, carpets, sports kits, China toys and dress goods among others. The
innovation of this entrepreneur included the purchase from the manufacturer for cash and in
bulk, maintaining his markup and prices very low, the exact representation of merchandise, no
haggling at all, simple returns on merchandise, the policy of cash refund and selling strictly on
cash and no credit. Within no time, his moves were widely copied by the other departments
(Fornell, 2017).
In the year 1858 in New York City, Rowland Hussey Macy established Macy's, and it
was known for dry goods storage. After a short while, Benjamin Altman and Taylor competed
with the Stewart since they were the earliest stores in New York and later they were followed by
McCrery’s and then in Brooklyn there was the establishment of Abraham and Straus (Benson B.
P., 2014). By late 1880s, the New York retail center had formed a stretch of retail shops from the
marble palace commonly known as ladies mile. By the year 1894, there was stiff competition in
the Christmas season with elaborate Christmas window displays. In the year 1895; the Macys
featured 13 tableaux which included scenes from Jack and Beanstalk and other favorites for the
children (Gereffi, 2015).

RETAIL MANAGEMENT 6
In the year 1877, John Wanamaker started the first modern departmental store in the
United States of America in a former Pennsylvania Railroad in Philadelphia. This was the first
departmental store that offered goods at a fixed price on every article (Zentes , Morschett , &
Schramm-Klein, 2016). It was also the first corporate store that introduced electrical illumination
in the year 1878, the telephone in 1879 and the utilization of pneumatic tubes in the
transportation of money and other documents. Other departmental stores that were opened in
Philadelphia included: straw bridge, lit brothers, and clothier among others (Jefferys, 2016).
The Future of Retailing
In the next five or ten years, the retailing business will be in existence but will have a
very different appearance. Due to the presence of the steady migration to the mobile and
electronic commerce, the retail business will be nice (Zentes , Morschett , & Schramm-Klein,
2016). Due to these changes, we will expect an increased customized concierge on the demand
services an also services on demand, integrating consumption and entertainment. The following
trends show that the future of retailing will be very different (Wong & Sohal, 2015).
The Ultra-Fast Distribution
In our today’s society, the norm has been a two-day delivery. However, research shows
that this is changing and at least 25% of the consumers confirm that they would abandon their
orders if there were no availability of one day. This is clear evidence that two-hour drone
delivery is approaching in the foreseeable future and some platforms like Amazon are taking
about half an hour of drone delivery (Fornell, 2017).

RETAIL MANAGEMENT 7
Technology
There is an increase in the demand for purchasing opportunities as the tech-savvy
generations are becoming worn out as time goes by. Research shows that a quarter of the
consumers in the united states who are aged 24 to 34 years do a quarter of their shopping online.
The digital natives that belong to generation Y and Z are waking up and will very soon pick as
heavy consumers as the slow an old tech-savvy generation is just disappearing. This is taking
over, and online sales are taking place and will be so in the next ten years (Kumar, 2016).
Research shows that a growing number of people do not mostly bother going downtown
and do shopping an bring home goods by themselves anymore. In the last few years, Netflix
came up with a service whereby people could order movies through the mail and then sent them
to their homes through the mail. Many people have welcomed the latter, and this reflected a
behavior that has affected more and more firms (Resseguie, 2015). Some retails also affirmed
that their consumers require them to offer the products at their homes no matter the quantity. If
this continues for a while, the future of retail shops will have an entirely different shape
(Resseguie, 2015).
Ever Online
In the recent past, it was easy to separate online activity from the other activities since
there was a clear pattern of how people made use of the internet. In the morning the number of
people online used to be more but went down during lunch time then rose in the evening. The
pattern has disappeared today and has been replaced by an increase in the usage of smartphones.
People wake up today and check their profile on Facebook or what Sapp on their profile

RETAIL MANAGEMENT 8
(Jefferys, 2016). If you fail to have these applications, you will never get to communicate with
these people.
Retailing on Mobile
This is growing faster than any other retailing activity. The global mobile sales for eBay
reached USD 2 billion recently, and the figure has been doubling in the years till today whereby
it stands at $ 5 billion. M-commerce in the US amounted to 9.8% of all online sales in a day, and
the same trend was reported In Europe (Kumar, 2016). This trend shows that in the next 5 to 10
years, retailing will have taken totally different shape.
Conclusion
The above discussion has been helpful and has helped us to have basic knowledge
concerning retail trade. Retail trade has a good start and should change with the change in
technology. In the cases whereby consumers can access the world without limit, the online
retailers will have a significant advantage over the traditional retailers since there will be no cost
of operating building all over. However, the latter does not mean that the conventional retailers
will not be there in the future. The retailers will be there but will have a different shape. This will
create a good environment for consumers since the environment to purchase goods will be
favorable.

RETAIL MANAGEMENT 9
References
Benson , J., & Shaw, G. (2013). The Evolution of Retail Systems. Vancouver.
Benson, B. P. (2014). Counter cultures: Saleswomen, managers, and customers in American department
stores, . University of Illinois Press.
Evans , J. R., Chatterjee, P., & Berman, B. (2017). Retail Management: A Strategic Approach, 13th Global
Ed. Pearson. ISBN: 9781292214672; 9781292214689.
Fornell, C. (2017). A national customer satisfaction barometer: The Swedish experience. the Journal of
Marketing,, 3, 6-21.
Gereffi, G. (2015). The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape
Overseas Production Networks. Oxford University Press.
Jefferys, J. B. (2016). Retail trading in Britain 1850-1950: a study of trends in retailing with special
reference to the development of co-operative, multiple shop and department store methods of
trading. Cambridge University Press.
Kumar, V. (2016). Building and sustaining profitable customer loyalty for the 21st century. Journal of
retailing, 37(3), 245-254.
Miller, M. B. (2015). he Bon Marché: bourgeois culture and the department store,. Princeton University
Press.
Resseguie, H. E. (2015). Alexander Turney Stewart and the development of the department store.
Business History Review, 34(2), 300-324.
Wong , A., & Sohal, A. (2015). An examination of the relationship between trust, commitment and
relationship quality. International Journal of Retail & Distribution Management,, 5, 56-65.
Zentes , J., Morschett , D., & Schramm-Klein, H. (2016). Strategic Retail Management: Text and
International Cases. 3rd. Springer ISBN: 9783658101831 .