Specialty Retailers: Marketing Triumphs and Blunders

Citation

Kacker, M. (2003), "Specialty Retailers: Marketing Triumphs and Blunders", Journal of Consumer Marketing, Vol. 20 No. 3, pp. 271-274. https://doi.org/10.1108/jcm.2003.20.3.271.3

Specialty retailers have always been a powerful force in the retail industry worldwide and have made a significant contribution in the distribution of consumer, durable and nondurable goods. In the USA, three types of retail institutions dominated during the early decades of the 1900s: mom‐and‐pop stores, variety stores, and small specialty stores. Department stores later emerged as an innovative retailing outlet and were widely patronized during the decades of the 1950s and 1960s. Significant environmental changes that occurred in the late 1960s and 1970s (increasing number of working women, rise in discretionary income, growth of shopping centers, and enclosed malls) brought new opportunities to specialty stores. With narrow width and extensive depth of assortment, these stores gained renewed popularity from younger and affluent segments. Their steady growth actually threatened the existence of many department stores during the 1980s, which either closed down or went through strategic changes in ownership and operations to meet the challenge.

Michman and Mazze’s Specialty Retailers: Marketing Triumphs and Blunders is a welcome addition to existing literature in the retailing field. In this book, the authors have carefully chosen nine sectors of specialty retailing for intensive study. These sectors cover most products and services generally bought by consumers from specialty stores. Michman and Mazze have examined the performance of specialty retailers within each sector on the basis of five key criteria: innovation, target market segmentation, image development, physical store décor, and human resource management. According to them, retail executives need to devote more attention to these variables in formulating strategy and gaining competitive advantage.

The book is organized into ten chapters. Chapter 1 narrates the history and development of specialty‐store retailing in this country. This chapter also discusses a few theoretical specialty retailing concepts, such as the marketing concept, retailing mix, innovation and scrambled merchandising, wheel of retailing, retail accordion theory, natural selection theory, retail life cycle theory, and dialectic process theory. Each of the remaining nine chapters examines a sector of specialty retailing in the following order: drugstores, specialty clothing, furniture, shoe, home improvement, bookstores, electronics, toys and automotive stores.

Chapter 2 deals with drug‐store retailing. It discusses the part played by two major types of drug stores, independents and chains, and explains the declining performance of independent drug stores. The authors examine the role of large chains like Walgreens, Rite Aid, CVS, and Eckerd, and look at the functioning of mail‐order and on‐line pharmacies. It is interesting to see how the environmental trends such as competition from giant chains and Internet firms forced many under‐performing smaller chains like Revco, Rexall and Webb’s City to close down.

The next chapter examines specialty clothing stores dominated by two major chains: Limited and Gap. It also discusses, briefly, the off‐price retailers like T.J. Maxx, Marshalls and Filene’s Basement, and direct retailers like L.L. Bean and Spiegel. Readers will see how strategic changes and new directions enabled chains such as Lane Bryant, Lerner’s and Abercrombie & Fitch to survive in a highly competitive fashion market.

Chapter 4 focuses on the retail home furnishing industry and examines the role of popular furniture retailers like Ikea, Ethan Allen, Pier I Imports and Heilig‐Meyers. It narrates the story of Levitz’s downfall and the success of niche retailers like Williams‐Sonoma and Pottery Barn.

The following chapter concentrates on shoe stores and, as in preceding chapters, the authors present the structure of this particular industry. Major players in shoe retailing covered are Nine West, Edison Brothers, Florsheim, Venator, Genesco, Footstar and Payless ShoeSource. The chapter also mentions the blunders made by popular chains like McAn and Nine West.

Chapter 6 presents the performance of leading home improvement stores, highlighting the success stories of giants like Home Depot and Lowe and the mistakes/blunders of Wickes and Hechinger. The authors rightly point out that “environmental changes such as the do‐it‐yourself trend, women interested in home repairs and remodeling and the blurring of gender roles have caused some home center organizations to change to home improvement centers” (p. 142).

The next chapter focuses on the retailing of books and discusses the success stories of superstores like Barnes and Noble and Border. The chapter illustrates how important it is for retailers to remain in constant touch with changing lifestyles. Failure to do so drove even highly prestigious stores like Brentanos out of business.

Chapter 8 moves on to another significant sector, the retailing of electronics goods, with a wide array of products ranging from personal computers to cellular phones to audio‐video products for the home and car. Readers get to know from this chapter how Radio Shack, operated by Tandy, assumed a leadership role in this trade for many years until giants like Circuit City and Best Buy entered the race. The authors talk about the casualties of regional chains such as Crazy Eddie and The Wiz as well as the alliance between Radio Shack, Sprint and Compaq that helped these partners to compete effectively without having to integrate vertically.

Toy stores form the subject matter of the next chapter, which discusses the operations of leading player and category killer Toys R Us, followed by Wal‐Mart, KB Toys and FAO Schwarz. Readers get to understand the blunders made by Child World and Lionel. They also learn how dynamic environmental changes have triggered the evolution of Internet retailing and the arrival of a new generation of toy stores like Zany Brainy and Noodle Kidoodle.

Finally, in Chapter 10 the authors discuss the $170 billion automotive aftermarket, composed of firms such as AutoZone, Pep Boys, NAPA, and Discount Auto Parts. The chapter refers to Pep Boys as an innovator, being the first aftermarket retail chain in the US capable of reaching the do‐it‐yourself market. Discount Auto Parts is also considered as a reputed chain known for its team system and “everyday low prices.” As in other chapters, the authors conclude by commenting on operational errors made by some retailers, including Chief Auto Parts, APS Inc. and CSK Auto.

Michman and Mazze have thus made an intensive study of a field in retailing rarely investigated in such depth. They have in the process presented mini‐case studies of many specialty retailers, illustrating cases of success as well as blunders in nine sectors. Environmental changes and developments have been discussed in different parts of the book to prove the point that retailers need to remain abreast of such changes and keep modifying their retailing mix to remain ahead of the competition.

Retailing professionals as well students will benefit from this book in a number of ways. The book will present them a coherent picture of specialty retailing with its latest developments. They will see how success in specialty retailing comes through a precise understanding of consumer behavior and careful thought in matters such as market segmentation, location and site selection, atmospherics and human resource management. They will also appreciate the soundness of the authors’ view that “success does not guarantee continued success” and therefore innovation needs to be a non‐stop function in a specialty retail organization (pp. 45, 162).

I note some limitations in this otherwise well‐designed publication. First, an important sector of specialty retailing has been left out: office supplies superstores like Staples and Office Depot, which are also “category killers” using a retailing format similar to Toys R Us and Home Depot. Further, relationship building and customer loyalty programs currently in vogue in leading specialty stores have not been dealt with adequately.

Second, specialty retailing in this country has benefited greatly from the international flow of ideas, techniques and formats. In the past three decades, we have seen a sizable amount of foreign direct investment in the retail industry. Retailers from Europe, Japan, and Australia have found the USA as a fertile ground for horizontal expansion, acquisition, and alliances. Overseas investments have naturally resulted in the transfer of retailing know‐how to specialty retailers in the USA. The book does mention a few overseas retailers like Marks & Spencer and Ikea, but a more in‐depth coverage would have enhanced the book.

And finally, the authors could have done a better job in dealing with theoretical topics/concepts which are scattered all over. For example, Porter’s generic competitive strategies are mentioned in reference to book retailing, theories of fashion cycle are mentioned in the chapter on shoe stores, and the diffusion process is discussed in the context of electronics retailing. Many professional retailers are today quite familiar with such concepts which come abruptly at places and disturb the continuity. Many of these concepts/theories might be equally relevant to other sectors of retailing and therefore could be better organized and presented in the opening chapter.