Gopal Sreedharan
Department vs Name-Brand stores
We’ve all gone shopping before. Where we shop though differs through person to person. We’ve shopped at department stores such as JCPenney, or the name-brand stores such as Express. There are many opportunity costs between the two types of stores and department stores have been struggling to keep up with name-brand stores.
It seems millennials these days aren’t interested in department stores anymore. The department stores showcase their products as a look and buy. Name-brand stores showcase their items in a way you can interact with them more give buyers more of a reason to buy their products. Examples include make up stores that let consumers try on make-up more than department stores.
In an effort to combat this, these huge department stores had to put heavy discounts on all their products. People got used to the discount culture, however and will only buy their products when there’s a discount.
JCPenney had a previous projection of 3 percent annual growth through 2019, but only reached 1 percent this year. Sales at a store that have been open for a year fell .7 percent in the fiscal fourth quarter, with the holiday shopping. With all these sales going down JCPenney among other stores closed down a huge number of stores. JCPenney had closed down 130 to 140 stores themselves. All the employees that lost jobs are to be hired to fill up jobs that were bought out. They expect to save 200 million dollars annually with a record initial 225 million to cover the initial closure stores. The stocks fell 4.8 percent after this.
All these big department stores are all closing down many stores. They’ll need to find a way to combat the name-brand stores if they want to keep up with the trends of today’s millennials.
Works Cited
"17 Retail Trends for 2017." Fung Global Retail & Technology. N.p., n.d. Web. 20 Mar. 2017.
Bomey, Nathan. "J.C. Penney to Close up to 140 Stores, Offer Buyouts." USA Today. Gannett Satellite Information Network, 24 Feb. 2017. Web. 20 Mar. 2017.
People have become more interested in the name brands that they wear rather than the price or look of the clothing. It is not surprising that so many department stores, especially JCPenney, have been closing recently because they are not very popular places to shop anymore. It is better for them to close down stores because of how much they would be saving rather than keeping the store running and having to pay all employees, causing them to lose even more money.
ReplyDeleteNot only are people more interested in the name brands they wear than the prices they pay for that quality of clothing, but they are much more interested in ordering clothing online. By ordering from online sources, popular retail options are failing to generate a profit and if this trend continues, will prove to put all department stores out of business. These big block store fronts such as JC Penny's, or Sears, are all losing money and will most likely be a thing of the past in the near future, as online shopping continues to grow.
ReplyDeleteName brands vs department brands is a very interesting debate. Obviously, the trade off for the quality of name brand foods is the price. Personally, I will usually get the Roundy's brand of Mountain Dew for a couple dollars less than the regular mountain dew. I know some people may disagree with me, but I would way rather save a couple dollars on basically the same kind of food than spend a couple more dollars for quality. Obviously there are some things that I will sacrifice a couple dollars for quality, but when it comes to shopping at a standard Pick'N'Save grocery store, I'm going to choose the generic brands over the name brands.
ReplyDeleteThis is very interesting. As a Kohl's I understand the heavy discounts that are apply all on of the off brad clothing. This all these millennials being concerned with fashion, these department stores are suffering. I think it would be interesting to see name the growth of brand stores, like express.
ReplyDeleteRegardless if it actually true or not, people usually tend to associate increased prices with increased quality. People are more and more willing to buy these perceived higher-quality products. It is interesting to see how high these name-brand companies can increase their prices before people begin to transition to department stores.
ReplyDeleteMany millennials are very concerned about every facet of their appearance, and will spend much of their parents money on expensive name brand clothes that offer the best in terms of trend and comfort. However, almost every young generation acted this way, and they all eventually began to care less about their appearance and shop at store with the best deals, such as my alma mater - Walmart. As people age, they learn to give up their insecurities and begin to shop at the store like JC Penny and Macy's that offer inferior fashion for superior pricing.
ReplyDeleteOne perspective to consider is that the retail market overall is slowing down. The popularity of online shopping is growing, especially with the advent of same or next day delivery. For these reasons, millennials are choosing to avoid retail. Also, in the past, it was popular to invest in high-quality clothing pieces with the expectation that they would last several seasons. Because trends are now easily accessible online and on social media, retail has turned to "fast fashion" -- lower priced and lower clothes that satisfy trends that last only for a few months. Kohls and JC Penny are marketing to a different demographic than higher-end department stores. High end retailers have to stock expensive merchandise that is competing with less expensive brands for attention from trend-seekers. However, JC Penny and Kohls market to a different demographic. They focus their brands on suburban and rural areas with families concerned about saving money that are more comfortable with traditional retail shopping.
ReplyDeleteThe desire for many to purchase name brand items over department stores items is staggering, despite these name brand items sometimes being an identical match to those of department stores. Although it is basic economics that consumers will purchase more substitute goods of cheaper prices, but in the case of clothing, many are willing to pay a lot more for a simple logo. I know from personal experience, I have purchased sweatshirts of quality that can be found in a $10 option, but opted for a $60 product just for the brand logo (which was very minimal). The demand in the clothing industry has seemed to shift from quality and price to branding and perception of style. Overall, it is interesting to see the comparison of economics between the brand names and department store names.
ReplyDeleteI'm not sure that department stores had to put discounts because of how their items are displayed, since there isn't truly that much of a difference, but instead it's because the department stores have larger overhead costs. I do agree that people have gotten used to these huge discounts, and often use coupons. Sometimes, even only shopping at these stores when there are coupons such as save $10 on $10. This is what's contributing to JC Penny's downfall.
ReplyDeleteUsually name brand products/stores have quality associate with their name, while generic brand products/stores come off as cheap and cost-effective. However unknown to most consumers, name brands and stores usually sell their excess product to the generic brands and stores companies, who then brand it as their own. In reality, the products are exactly the same! It's usually just the name that hold weight among consumers. That' why generic brands and stores almost always better to get.
ReplyDelete