Three External Forces in Big Box Retail

¶ … Environment Assessing the Business Environment The focus of this environmental assessment is the big box retail industry. The three environmental forces that have the most significant impact on big box retail are as follows: Demographics, technology, and economic conditions. Demographics. The category of demographics is broadly determined as it includes, among other variables, the attributes of age, educational level, ethnic origin, gender, race, and residential area. Demographics are a prominent feature of consumer profiles and target market segmentation schemas, primarily because they represent characteristics that strongly influence purchasing behavior.

The range of products offered by big box retail operations typically spans the major categories of consumer demographics, although it is not uncommon for large-scale retail companies to emphasize one or two fairly specific target markets. For instance, the marketers in the retail big box I am associated with increasingly target diverse consumers, such as Hispanics. And then, too, the managers also need to be aware of diversity in recruiting, hiring, supervision, and promotion practices.

A contemporary example of the trend toward demographic-centric marketing -- and considering only the demographic of the age of consumers -- is the retail chain named Forever 21. Indeed, given the eponymous company name, there is little doubt about the target market; as one might guess, the Forever 21 attracts customers primarily in the 18- to 24-year-old range. Stores with a sufficiently long history (Sears) and warehouse club business (Costco, Sam's Club) continue to carry products specifically for consumers aged 50 years and older, such as hearing aides.

From a management perspective, it is helpful to explore the changes that are happening in "drug stores" such as CVS and Walgreens, indicators of which are styling of shelving, signage, and aisles to make it easier for older customers to shop. Technology. Database marketing has catapulted technology to a position of pivotal importance in the retail industry. Big box retail chains offer loyalty reward points and credit cards that enable the shopping patterns of consumers to be tracked and analyzed.

For example, Target is known to have one of the most sophisticated and comprehensive consumer activity tracking systems in the retail sector, and recently released the Cartwheel system of discount coupons that operates on digital platforms, including smartphones and computers. Moreover, Target's Cartwheel is designed to be used in its bricks and mortar stores, which is an important factor for big box retail chains that must maintain relatively high levels of diverse inventory to ensue foot traffic is viable.

And of personal good manufacturers, Proctor & Gamble has the most sophisticated consumer activity tracking system, with finely developed real-time capacity and agility. As retail business increasingly moves to online or mobile digital devices, technology is assuming a central position in retail shopping. Although younger consumers are confident and prolific online shoppers, the generation of boomer shoppers increasingly favor online shopping because of the relative ease it provides for accomplishing the tasks of shopping.

The consumer pursuit of convenience is not a new trend, but it has been given astronomical lift by technological innovations, some of which is so astonishingly transformative that it is referred to as disruption. Economic conditions. As mentioned above, an important driver of the new global economy.