Rolling back the competition

One can't talk about retail without mentioning Wal-Mart, which looms large both as a sales leader (raking in more than $258 billion in 2003) and as a chain that has rendered the playing field much harder to compete on for many smaller retail establishments. Placing second in sales for 2003, according to NRF, was Home Depot (trailing far behind Wal-Mart at $64 billion); grocery giant Kroger came in third. Other top retail contenders are Target, Costco, Sears and Safeway.

Branding the multi-brand retailer In this competitive sector, marketing makes all the difference. Despite Wal-Mart's dominance, "multi-brand" retailers, like department stores and discounters, which sell a range of other companies' brands, have a tougher battle when it comes to establishing a national brand identity of their own, according to analysis by consulting firm McKinsey & Co. But multi-brand chains are catching onto the concept of aggressive self-promotion. Target is a notable example -- in summer 2004, the chain spent more than $1 million on a massive billboard campaign in Times Square, though there's not a Target to be found for miles in Manhattan. McKinsey notes that Target has been an innovator in marketing for the sector. Its distinctive "bullseye" logo, featured in early campaigns with no products on display, "places the brand and the promise of the store ahead of its merchandise," a trend expected to grow ever more common in the sector, according to McKinsey.

Blue light bankruptcy

Other multi-brand retailers, like Kmart, haven't been so lucky -- saddled with a sinking financial profile, the company was forced to declare bankruptcy in early 2002. In March of that year, it announced plans to close 283 stores and eliminate more than 20,000 jobs (a figure that would grow by another 40,000 or so by the end of the year, with a total of 600 out of 2,100 stores closing). The company eventually revealed that it had lost more than $2 billion in 2001, and had to restate its earnings for the previous three years. Investigations soon uncovered a host of financial shenanigans. Later in 2002, two former Kmart VPs were indicted for their part in the company's fall. Top exec Chuck Conway, however, walked away from his position relatively unscathed, with a $9 million package. Emerging from Chapter 11 in May 2003, the retailer took a leaner approach, trying to boost its image with a fresh marketing campaign. In June 2004, the company agreed to sell up to 54 stores to rival retailer Sears, to the tune of $621 million. In a surprising turn of events, Kmart bought sears in November 2004, and announced plans to merge the two troubled retailers.

Managing customers

Once retailers have made a customer out of a shopper, the trick is to keep him coming back for more, not running to the next competitor that holds a sale. This process is facilitated by customer relationship management (CRM), which applies software, Internet capabilities and other resources to help companies manage information about their clients. For instance, using a CRM database, a company might be able to access a customer's past purchases at the store and gear special offers toward him, or alert him when a product matching his interests becomes available. From the retailer's perspective, CRM can help integrate business functions to increase efficiency and manage supply chains better According to Forrester Research, the CRM market is expected to grow annually by 11.5 percent between now and 2007. This market includes software and applications as well as the consulting services many companies adopt to get their CRM systems up and running.

Going online

As in many other industries, technology has revolutionized retail. While "alternative retail outlets" like mail-order companies, home shopping and the Internet have taken some business from traditional stores, the change hasn't been as dramatic as some had anticipated. In fact, studies indicate that while consumers are more frequently visiting the Internet to compare prices and research products, many still go to the store to make the final purchase. Still, online sales surpassed all industry expectations in 2003, totaling $114 billion, or more than 5 percent of all retail sales, according to a Forrester Research study. This figure represented a 51 percent jump over the previous year. Not only are consumers becoming less nervous about the security issues associated with online transactions, they're also expanding their horizons in terms of the types of products they're willing to shop for and purchase online. Online sales have been particularly strong in the health and beauty and apparel categories.

Pursuing a career in retail

The role of technology in retail makes it necessary for job seekers to acquire and maintain good technological skills, in addition to communication, customer service and analytical skills. Those pursuing a career in retail will benefit by taking business courses, too. Entry-level jobs can be acquired with or without a college education in retail, but a college degree can make it possible to enter retailing at a higher level, such as through an executive training program.

Inventory Planning and Buying

While the retail industry offers professional opportunities in functions common to all other industries (accounting, information technology and human resources), it provides two major professional paths unique to the industry: inventory planning and buying. Inventory planners are responsible for the making sure that the company's stores are stocked with the appropriate products. At first glance, this may not seem too demanding, but consider that many major retailers operate thousands of stores, and that these stores may carry different product mixes because of the customers they serve.

Then, consider that retailers stock different products for different seasons and promotions -- think about all of the "Back to School" promotions and holiday products you see at a major retailer. At many retailers, the inventory planning department is also responsible for making sure that the actual "Back to School" signs and product displays are shipped to the stores.

Inventory planning roles are very quantitative and detail-oriented. Professionals in these must learn inventory tracking systems and software that their companies have developed or purchased. Planners generally work out of the company's corporate headquarters or major offices.

While planners are responsible for making sure that the stores are stocked, buyers are responsible for deciding what products the stores should sell. Faced with a surplus of companies all making the case that their products will be the next big thing, buyers must judiciously choose the products they believe will "sell through" to customers. How do buyers decide? They stay on top of trends, talk with professionals in their industry to try to pick up on any "buzz" surrounding a particular product, evaluate the products' quality and appeal themselves. Then, combining all of this knowledge with that of who their store's customers are (and what they are willing to pay for certain types of items), the buyers make decisions on what products to stock. Unlike planners, buyers travel a great deal in order to meet with vendors.