• Dhruv Grewal
  • Michael Levy
  • Podcast
  • Videos
  • Digital
  • Newsletters

Grewal Levy Marketing News

Grewal Levy Marketing News

Category Archives: Chapter 17: Retailing and Multichannel Marketing

Dollar General Will Keep Selling (Some) Groceries and Other Goods for $1

18 Tuesday Oct 2022

Posted by grewallevymarketingnews in Chapter 15: Strategic Pricing Concepts, Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

dollar general, Retailing, Strategic Pricing

There aren’t a lot of grocery bargains to be had these days—unless you’re shopping at Dollar General. While competitor Dollar Tree has raised the price of many of its goods to $1.25, Dollar General is committed to keeping lots of items at just one buck, and even expanding its $1 offerings, while also expanding its grocery offerings. This decision and dedication reflect Dollar General’s recognition that its consistently low price offerings are counted on by “core customers” whose incomes are less than $40,000 per year, and who run out of cash in the last week of most months.

These customers are visiting stores more often, though they make fewer purchases during each visit, likely signaling their budgetary constraints. The stores are also attracting new, newly budget-conscious customers who are seeking less expensive groceries, as inflation is otherwise driving food prices up, and up, and up.

Currently, about 20 percent of Dollar General’s merchandise is selling for $1. The retail chain is working toward offering even more products at this price. It also is bolstering the fresh, refrigerated, and frozen foods that make up its DG Fresh initiative. The company is now self-distributing refrigerated and frozen foods across its 18,000-plus stores, and it plans to have fresh produce in 3,000 stores by year’s end, in an effort to compete with traditional supermarkets instead of convenience stores. In support of this initiative, Dollar General plans to install more than 65,000 refrigerator cooler doors this year.

It’s good for customers’ bottom line, and Dollar General’s, too. A second quarter report showed that sales had increased 9 percent to $9.4 billion, and same-store sales rose 4.6 percent. An updated full-year sales prediction indicates that full-year sales will increase about 11 percent, up from the previous estimate of 10 percent.

Discussion Questions:

  1. Why would Dollar General not raise its prices, even while its competitors are doing so?
  2. Is it good or bad for business, for Dollar General not to raise prices?
  3. Could Dollar General compete with traditional supermarkets? How should it go about doing so?

Source: Matthew Stern, “Dollar General Plans to Expand Its Selection of $1 Items,” RetailWire, September 16, 2022; Heather Lalley, “Dollar General’s $1 Groceries Are Here to Stay,” CSP, September 14, 2022; Nathaniel Meyersohn, “Why Dollar Tree’s Price Hike to $1.25 Could Be ‘One of the Worst Decisions in Retail History’,” CNN, December 8, 2021; Nathaniel Meyersohn, “Rising Prices Are Pushing Shoppers to Dollar Stores,” CNN, June 8, 2022; Jon Springer, “Dollar General Plans to Self-Distribute Fresh, Frozen Foods,” CSP, March 18, 2019; Sam Silverstein, “Dollar General Bulks up on Perishables in Q4 as Overall Comps Wilt,” Grocery Dive, March 18, 2022; Marianne Wilson, “Dollar General Posts Strong Q2, Upbeat Guidance,” Progressive Grocer, August 26, 2022

Gallery

Abercrombie & Fitch Wants You (Yes, You!) to Visit Its New Gateway Shopping Destinations

07 Wednesday Sep 2022

Posted by grewallevymarketingnews in Chapter 05: Analyzing the Marketing Environment, Chapter 09: Segmentation, Targeting and Positioning, Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Abercrombie & Fitch, Marketing Environment, Retailing, segmentation

This gallery contains 1 photo.

Way back when, all the way back in the 1990s, Abercrombie & Fitch was the source for some very strange …

Continue reading →

More Companies Are Selling Directly to You, At Least For Now

25 Thursday Aug 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Multichannel Marketing, Retailing

The pandemic changed a lot of the ways that people do things, and some of those new habits have stuck. For example, when merely breathing in the same room as another person spelled dire peril, consumers understandably stopped shopping as much in brick-and-mortar stores. Online shopping grew to fill the void, and then some, with e-commerce sales increasing from $571.2 billion in 2019 to $815.4 billion in 2020, then to $870.78 billion in 2021.

It is not just consumers whose behavior changed though. Retailers and manufacturers had to adapt to this new world of consumption, as well—bolstering their e-commerce offerings and in some cases ditching third-party retailers to sell directly to customers themselves. In so doing, they have entered into more direct competition with sellers that have been direct-to-consumer—DTC—from the start, like the glasses company Warby Parker or AllBirds, which sells comfy, sustainable shoes. But these innovative upstarts now confront competition from companies with greater brand recognition, as they enter the DTC business. For example, Nike cut back substantially in the amounts of physical product it provided for Foot Locker, Amazon, DSW, Zappos, and other third-party retailers to sell. Instead, it moved the inventory to bolster its DTC offerings, in a move the company claims helped offset the decline in its wholesale business early in the pandemic.

According to Nike’s Chief Financial Officer, some 24 percent of Nike’s total revenue in the fiscal year that ended in May 2022 came through digital channels, including its website and smartphone app. As this calculation indicates, DTC is not limited to the web. Accordingly, Nike has plans to build out its DTC offerings even further, including a Jordan-only concept store to open in 2023, as well as more Nike Live stores, which are membership-based boutiques that offer unique merchandise and special experiences.

Along with Nike, food and beverage companies like Pepsi have entered the DTC market in recent years. Across these markets, the lines between the manufacturer, retailer, and distributor categories have grown more fuzzy.

But even as these big-name brands jump on the DTC train, it might be jumping the track. Some very recent figures suggest a big slow-down in online shopping. Warby Parker is the latest DTC brand to enter into downsizing mode, laying off 15 percent of its corporate workforce. Other DTC brands like Allbirds and Glossier, as well as Walmart’s DTC arm, have shrunk recently too. The reasons for this contraction might be the heightened competition in the market, or it could reflect the increased costs of Facebook ads and shipping costs. Alternatively, maybe the projections were wrong, and the customer bases for DTC products remain relatively small. In response, some companies have reoriented themselves yet again, away from selling directly to consumers and toward a stronger embrace of the wholesale route. Everything old is new again.

Discussion Questions:

  1. Why might Nike open its own DTC channels instead of selling its products to third-party retailers?
  2. Do you expect to see more or less DTC retailing, in the coming year or decade?
  3. Are some types of brands better equipped to handle the challenges of DTC than others?

Source: Akiko Matsuda, “Direct-to-Consumer Sales Are Fueling Supply-Chain Tech Growth,” The Wall Street Journal, August 6, 2022; Tim Gaus and Bill Lam, “Consumer Connectivity: Creating Customer-Centric Supply Chains,” www2.deloitte.com, August 2, 2022; Sara Bloomberg, “Shogun, a Direct-to-Consumer E-commerce Startup, Lays off Dozens,” The Business Journals, August 10, 2022; Gary Drenik, “Will Retailers Follow Nike’s Playbook? Why More Brands Are Moving to DTC Operations and Away from Wholesale and Marketplaces,” Forbes, July 12, 2022; Mayumi Brewster, “Annual Retail Trade Survey Shows Impact of Online Shopping on Retail Sales during COVID-19 Pandemic,” census.gov, April 27, 2022; Nicole Silberstein, “Nike to Double Down on DTC Following Q3 Gains, Plans Standalone Jordan Stores,” Retail TouchPoints, March 23, 2022; Jessica Young, “US Ecommerce Grows 14.2% in 2021,” Digital Commerce 360, February 18, 2022; Cara Salpini, “How Nike Is Using DTC and Data to Expand Its Empire,” Retail Dive, March 23, 2021; Alex Kantrowitz, “The Direct-to-Consumer Craze Is Slamming into Reality,” CNBC, March 14, 2022; Daphne Howland, “Warby Parker Lays off 15% of its Corporate Workforce, Citing Changing Consumer Behavior,” Retail Dive, August 9, 2022; Caroline Jansen, “DTC Brands Have Long Been Vocal about the Importance of Sustainability. Is That Enough?” Retail Dive, June 27, 2022

Gallery

Best Buy Touts the Environmental Benefits of Outlet Stores

20 Wednesday Jul 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

best buy, Multichannel Marketing, Retailing

This gallery contains 1 photo.

Some analysts predict 2022 is going to be a rough year for Best Buy. The Motley Fool sees a “growth …

Continue reading →

Gallery

Online Retailers Try Something Radical: Physical Stores

18 Monday Jul 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Online Retailing, Retailing

This gallery contains 1 photo.

As it gets harder and more expensive to attract new customers online, some online brands are taking a bold step …

Continue reading →

Gallery

Dollar General Employee Goes Viral on TikTok, Gets Fired, Starts a Movement

23 Thursday Jun 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

dollar general, Retailing, TikTok

This gallery contains 1 photo.

Mary Gundel was a celebrated Dollar General manager, at a store near Tampa. She’d received a letter from headquarters telling …

Continue reading →

Gallery

In a Time of Historically Low Union Membership, Workers at Amazon, Starbucks, and Apple Are Organizing

01 Wednesday Jun 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing, Chapter 20: Personal Selling and Sales Management

≈ Leave a comment

Tags

Amazon, Retailing, sales management, Starbucks, Union

This gallery contains 1 photo.

Forty years ago, about one in five employed Americans belonged to a union. That number declined by about half—to 10.3 …

Continue reading →

Gallery

Is Being a “Meme Stock” Enough to Save Bed Bath & Beyond?

26 Thursday May 2022

Posted by grewallevymarketingnews in Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Bed Bath & Beyond, Meme Stock, Retailing, Stock market

This gallery contains 1 photo.

Over the most recent ten quarters, Bed Bath & Beyond has failed to achieve its predicted revenue levels in seven …

Continue reading →

Influencers, Live on Your Stream, Ready to Sell You the Products You Want

22 Thursday Apr 2021

Posted by grewallevymarketingnews in Chapter 03: Social and Mobile Marketing, Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Influencers, Livestreaming, Multichannel Marketing, Retailing, Social and Mobile Marketing

Lo-res_119759522-SIn ongoing attempts to be present in any channel that shoppers might use, retailers are embracing the potential of livestreams and their ability to provide a sort of in-person vibe that helps consumers engage with brands. These channel shifts and efforts also reflect the growing sales potential offered by influencers, whose live broadcasts already attract hundreds or thousands of viewers. Finally, the increasing uses of livestreaming retail reflect the expansion plans of various tech and social media firms to be all things to all users.

On Amazon Live for example, individual influencers constantly post videos that review and introduce various products that viewers can purchase with a click. Multiple streams run simultaneously, so visitors can choose whether they want to learn about a single brand of hot sauce from someone sitting in his car, waiting in line to get a vaccine outside Dodger Stadium, or if they prefer to encounter a wide range of products, presented in a professional, journalistic-like style, by “The Deal Guy.”

These influencers and salespeople generally earn some varying percentage of the price for any products sold through the link on their livestreams. For example, the Deal Guy earns a higher percentage for luxury products than for grocery items. Influencers who attract more views and clicks earn priority placements in video menus, as well as quicker technical support if something goes wrong with their feed.

But whereas Amazon Live allows a few dozen livestreams at the same time, services in China host hundreds of them. China is a big market for livestreaming, such that it accounts for about $63 billion in sales, equivalent to 9 percent of the country’s online market. Many retailers host their own shows. A Chinese college even has added an ecommerce livestreaming degree to its curriculum.

Taking lessons from China’s far more advanced livestreaming examples, one consultant suggests that U.S. retailers cannot simply assume that adding videos to ecommerce sites will appeal to fans of livestreaming. Rather, the channel requires novel, appealing, engaging content. To provide it, retailers might consider limited-time offers, as well as exclusive products that people cannot find elsewhere.

Retailers also might take lessons from an older technology: home shopping channels. In these environments, popular and appealing hosts (similar to influencers) introduced a range of products to shoppers through their televisions (parallel to digital screens), often in virtually real time. Just as today’s users can comment during livestreams, shoppers could call in to chat with a host, establishing a strong connection and sense of engagement. As may come as no surprise, the parent company that owns famous home shopping services such as HSN and QVC already hosts livestreaming sessions on Roku, YouTube TV, and Facebook Live.

Discussion Questions:

  1. What do retailers need to do to leverage livestreaming options?
  2. Which kinds of influencers might be the best options to hire to conduct livestreaming sessions?

Source: Jackie Snow, “Livestreaming, Still Niche, Grows as a Tool for Retailers,” The New York Times, March 14, 2021

Gallery

Pets Make People’s Lives Better, and Walmart Is Ready to Make Pets’ Lives Better for Them

05 Friday Feb 2021

Posted by grewallevymarketingnews in Chapter 13: Services: The Intangible Product, Chapter 17: Retailing and Multichannel Marketing

≈ Leave a comment

Tags

Pets, Retailing, Services Marketing, Walmart

In addition to dry and canned food, a leash, and some toys, pet owners can now meet more of their …

Continue reading →

← Older posts

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Blog Stats

  • 288,640 views

Archived Articles by Chapter

  • Chapter 01: Overview of Marketing (76)
  • Chapter 02: Developing Marketing Strategies (135)
  • Chapter 03: Social and Mobile Marketing (157)
  • Chapter 04: Conscious Marketing, Corporate Social Responsibility, and Ethics (155)
  • Chapter 05: Analyzing the Marketing Environment (220)
  • Chapter 06: Consumer Behavior (178)
  • Chapter 07: Business-to-Business Marketing (84)
  • Chapter 08: Global Marketing (116)
  • Chapter 09: Segmentation, Targeting and Positioning (147)
  • Chapter 10: Marketing Research (98)
  • Chapter 11: Product Branding and Packaging Decisions (203)
  • Chapter 12: Developing New Products (178)
  • Chapter 13: Services: The Intangible Product (144)
  • Chapter 14: Pricing Concepts for Establishing Value (97)
  • Chapter 15: Strategic Pricing Concepts (92)
  • Chapter 16: Supply Chain Management (110)
  • Chapter 17: Retailing and Multichannel Marketing (202)
  • Chapter 18: Integrated Marketing Communications (162)
  • Chapter 19: Advertising, Public Relations and Sales Promotions (189)
  • Chapter 20: Personal Selling and Sales Management (55)
  • Marketing Tidbits (32)
  • Uncategorized (15)

Tags

advertising Amazon apple B2B Marketing branding China coca cola Conscious Marketing consumer behavior COVID-19 customer service data Developing New Products Disney ethics Facebook fashion food global global marketing Google + green health india Integrated Marketing Communication integrated marketing communications luxury Macy's marketing marketing enivronment Marketing Enviornment Marketing Environment Marketing Ethics Marketing Research marketing strategies Marketing Strategy Marketing Tidbit mcdonalds mobile mobile commerce Mobile Marketing Multichannel Marketing netflix New Product Development Nike Overview of Marketing p&g Packaging Positioning pricing Pricing Concepts Private label Product Branding Public Relations rebranding repositioning retailers Retailing sales management segmentation services Social and Mobile Marketing social media Starbucks Strategic Pricing supply chain Supply Chain Management sustainability Target targeting technology twitter Walmart Whole Foods Youtube

Blog at WordPress.com.

  • Follow Following
    • Grewal Levy Marketing News
    • Join 468 other followers
    • Already have a WordPress.com account? Log in now.
    • Grewal Levy Marketing News
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...