Retail stores business model
On State Street in downtown Chicago, the Marshall Field's flagship exemplifies the challenges that department stores are facing everywhere. Many of the brands that adorn the “cathedral of all stores”, as Marshall Field himself called the present building, can also be found in the boutiques along nearby glitzy Michigan Avenue. Meanwhile, out in the suburbs, the shopping malls boast department stores too, ranging from J.C. Penney to Sears and more Marshall Field's, all of them selling much the same thing.
Throughout the malls there are speciality retailers, such as Victoria's Secret, Foot Locker and RadioShack. Then there are giant warehouse-like superstores that specialise in selling things such as shoes and home appliances. And as if that were not enough, gift hunters can also visit the supermarkets, which long ago ventured beyond selling just food. Finally there are the discounters, of which Wal-Mart, where 80% of American households now shop at least once a year, is by far the biggest. For those who prefer to stay at home, there are mail-order catalogues, the internet and TV-shopping channels to explore.
On a down escalator
Faced with so much competition, department stores have been steadily losing business to other retailers. In 1990, conventional stores accounted for 2.5% of total household income in America, according to the International Council of Shopping Centres. A decade later, their share had tumbled to just 1.6%. With combined sales of $91 billion in America last year, department stores are being left behind by the growth of discount chains such as Wal-Mart, which had combined sales of $139 billion in 2002, and warehouse clubs and superstores like Costco, whose total sales were $192 billion.
These changes are not confined to America. In Japan, some stores have decided it is more lucrative to rent out sales floors as offices rather than to try to sell merchandise. Even in China, where personal wealth is rapidly rising, the authorities in Shanghai earlier this year merged some of the city's big retailers, including the illustrious Shanghai No. 1 Department Store, because of increasing competition.
MS believes subscription model is the future
Microsoft believes subscription model is the future of Xbox business
Microsoft has been slowly testing the waters with a subscription based contract model with the Xbox 360. Earlier this year, Microsoft rolled out a $99 Xbox 360 contract deal where you would have to pay $15 per month for two years.
Microsoft offered the 4GB Xbox 360 and Kinect bundle, which retailed for $299 earlier this year before the temporary price drop to $250 for $99 and a 2-year contract at Microsoft retail stores
One middle ground, Pidgeon points out, is selling voucher codes for digital games in stores.
Koller says that Sony has already been in talks with retailers and that their reaction to the PSPgo has been "overwhelmingly positive."
"With the dawn of the digital gaming age, particularly with the launch of the first full game digital platform in the PSPgo, retailers are becoming very creative in how they work to become a part of digital networks and sales," he said. "And we've become creative in how we have crafted a new business model to meet how and what retailers sell
Here: you'll love these:
"...ds of discretionary spending are not reflected in the retail sales numbers, such as buying items for cash in small businesses or garage sales, barter or paying workers in cash."
Here are some examples of The Alternate Economy at work:
* Many people are instinctually abandoning their patronage of big-box department and grocery stores like Costco, Home Depot, Walmart and Safeway with their foreign and Wall Street ownership in favor of returning their business to small to medium sized stores
Libertarian economics always fails
When will the Unicorn Economist ever learn?
their economic model is a complete failure
Plagued by the realities threatening many retail stores, Sears also faces a unique problem: Lampert. Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results
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