The retail sector is defined as a segment of the economy related to consumer purchases at
the retail level. In the United States, it simply consists of Americans buying goods and services
at retail establishments, or commonly known as stores. According to a study done by
PricewaterhouseCoopers LLP called ‘The Economic Impact of the U.S. Retail Industry’, retail
powers the American economy. “Retail is the largest private employer in the United States.
Retail directly and indirectly supports 42 million jobs, provides $1.6 trillion in labor income and
contributes $2.6 trillion annually to U.S. GDP,” according to the study (PricewaterhouseCoopers
LLP pg. 3). There are several types of retail sectors including but not limited to motor vehicle
and parts dealers, furniture and home furnishings stores, electronics and appliance stores, food
and beverage stores, and clothing and clothing accessories stores. These and the multiple other
sectors provide such broad insight into what retail stores really entail (Levy pg. 37).
This can best be displayed through the retail sector clothing and clothing accessories
store, which is the retail sector in which our retail store, Beauty Bender, operates. Beauty Bender
falls into this retail sector because it is a clothing store. For example, this sector can be broken
down into retail stores that only cater to shoes or apparel or jewelry. It can also be broken down
even further to only include those specific items toward a certain age group or gender. The most
profitable segment of the retail apparel industry is women’s clothing. It accounts for over half of
the total revenue for the sector. The majority of the sales occur during the holidays (Wagner).
Selling clothing and accessories is a very seasonal business in general because wordrobe has to
change just like the season.
The sector contains a number of large, well-branded retailers as well as smaller
businesses, such as botiques. Large apparel retailers have a much better advantage over smaller
apparel retailers by their ability to buy larger quantites of apparel, therefore getting a better price
from the suppliers. By getting lower prices for buying in bulk, large apparel retailers have greater
profit margins, which means they can offer consumers, or customers, better pricing in stores.
Smaller apparel retailers sell certain types and styles of clothing versus large apparel retailers
who sell everything for everyone. They do this to compensate for paying high prices for
wholesale retail apparel (Wagner).
The biggest trend seen in this sector currently is the increase in people who like to shop
for apparel on the Internet from the comfort of their home instead of going the traditional route
and shopping at a brick-and-mortoar store. “Emerging technology such as mobile applictions are
changing the way retailers do business (Wagner).” National Retail Federation reports that
customers who use mobile devices to buy spend eight times more than people who only shop in a
store (Reda). Other trends seen in the clothing and clothing accessories stores sector includes
creating mobile point-of-sale applications to make it easier to buy, offering services like virtual
fitting rooms, and using customer data to find out what customers really want (Wagner). More
and more retailers are turning to social media to connect with customer and get the quickest and
most honest feedback.
The biggest challenge with this industry is maintaining the latest styles and accessories
that attract to your client base, while also ensuring there is not an abundance of inventory left
over after the season changes. With the increasing trend in online shopping, building and
operating a physical location is becoming even more of a costly endeavor. Many retails stores are
opting to counteract those high costs by soley selling apparel via the Internet, which eliminates
the need for a costly storefront and the extra staff (Wagner).
When broken down into a specific retail type, Beauty Bender is considered a specialty
store. This retail type best suites Beauty Bender because, “specialty stores concentrate on a
limited number of complemantary merchandise categories and provide a high level of service
(Levy pg, 52).” The advantage to specialy stores is that by designing a retail strategy toward
specific market segments, they offer customers a deep but narrow assortment of merchandise and
with the right training, sales associates become experts to the assortment of merchandise. For
those reasons, specialty stores have a great appeal among consumers and they rank among the
most profitable and fastest growing firms in the world (Levy pg. 52).
Having the ability to focus on a single class of products and attract enthusiasts does have
a downside of stores lacking variety. “This means that shoppers are only likely to come to the
store when they have interest in the type of products it sells (Hartman).” Compare this to
department stores that can draw customers to the store for one product and expose them to many
other products while they are already there shopping. This dilemma often drives customers to
