assign 7c and 7d

Toilet Paper at Home Depot? Competition Changes Product Mix by: Shelly Banjo and Serena Ng Jun 06, 2014

TOPICS: Business Strategy, Retailing

SUMMARY: Big box retail stores were successful for a long time because they offered selection and specialization. Home improvement items, office supplies and electronics sold in stores like Home Depot, Staples and Best Buy meant customers went to stores for merchandise in specific categories. Now stores are reconsidering what they stock and responding to the drop in traffic at stores by adding basic items to bring customers into stores. Toilet paper, coffee pods, deodorant and cleaning supplies are a few of the items sold at stores you might not typically associate with the products. Some stores always sold these kinds of items, but they are expanding and getting more aggressive. Consumer packaged goods might be the part of the salvation of big box stores.

CLASSROOM APPLICATION: Where do you buy your toilet paper? It might seem like a simple question but it has implications for the future of retailing. The increasing role of the Internet in retailing has affected the basic strategies of traditional brick and mortar stores. As traffic fell because customers went online to shop, retailers needed to rethink what they stocked on shelves. That resulted in electronics stores selling detergent and coffee pods, deodorant at the checkout line at office stores and cleaning supplies at home improvement stores. The retailers think the items generate store traffic. Bringing customers into the store has benefits if they look and purchase additional items. More aggressively marketing basics that drive traffic could help overall sales. Adaptation to a changing retail environment is a key if stores want to succeed. This represents one possible strategy.

QUESTIONS:  1. Briefly define “product mix” (use the text book if you want) and tell me both how and why the product mix has changed at “big box” stores according to this article. 2. Why is store traffic so important to a traditional retailer? 3 Where does you or your family normally buy your basic household items like paper towels, deodorant, coffee filters and laundry soap? In your opinion do such shopping habits illustrate the threats traditional retailers are facing? Why? END