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Case - Mercantile Stores
During the 1980s, Mercantile Stores was a major retail organization located throughout the
Southeast, Midwest, and Gulf Coast regions and included seven divisions: Gayfers, Maison,
Blanche, Castner Knott, McAlpin’s, Jones, Joslins, and J. B. White. Mercantile's mission
statement was "Mercantile Stores is dedicated to creating excitement in merchandising by
providing the highest level of service to our customers and a broad assortment of fashionable
In 1989 a major technological initiative called Quick Response was instituted. It
integrated all facets of operations, from inventory planning to purchasing and inventory control,
to provide customers with better service. Some of the technologies introduced were price look-up
and point-of-sale laser scanning systems, electronic purchase ordering and replenishment, and
electronic invoicing and funds transfer. Stronger partnerships were developed with suppliers to
help ensure that suppliers have sufficient merchandise for stocking the stores. The company was
in constant contact with its suppliers for mutual benefit. For example, Hanes hosiery used selling
information furnished electronically and shipped 97 percent of Quick Response orders. Sales
increased 17 percent, and the inventory level decreased by 15 percent.
The Quick Response program eliminated bottlenecks within the merchandise processing
functions. Previously, shipments had required a high amount of labor-intensive efforts: opening
Mercantile Stores also established a University Business School for training its
management associates to implement quality practices within the company The school's motto,
Investing in Excellence Through Education, reflected the company's commitment to the
development of its people. Sales associates, department managers, and store managers were
empowered and challenged to embrace ownership and responsibility in their jobs. For example,
they planned and monitored their own forecasts from start to finish. Complete customer
satisfaction was seen as the responsibility of all associates. Decisions were made as close to the
customer as possible, and promotions were made from within the company.
Discussion Questions
1. How does Mercantile view quality? Explain the roles of people and information
technology in achieving quality in the Mercantile organization.
