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Retailing includes all the activities involved in selling goods and services directly to the final consumers for personal, non-business use. Over the years, retail marketing has gone through significant change in the western world. However, few articles exist summarizing the mass of information on the current trends in retailing. This paper attempts to do just that for practitioners by highlighting the trends that best describe the current state of retailing in the USA. The paper further reviews the possible effects of these retail trends for consumers and the workforce. The choice of US as the focus for the paper has been deliberate as US serves as a technological beacon for the rest of world in the emergence of new business models in retailing.
Business Environment in USA Retailing
All retail markets are being driven by consolidation and the requisite need for efficiency. For example, the hardware category is being driven by Home Depot and the grocery category is being driven by Walmart. These large retailers are using technology to organize and make the supply chain more efficient. Both are asking the manufacturers to do more. For example they want more in-store support and help with category management. They want more straight through processing with their suppliers. These same retailers operate on an everyday low price profit model based on driving volume through their stores. This continuous pressure and emphasis on low prices tends to commoditize the products they sell, lessening the value of product features and brands. This has put tremendous pressure on the manufacturers to truly differentiate their products and to effectively communicate to the consumer their value. The size of these big box stores makes ignoring them impossible but their practices and operational demands have upset and initially complicated the manufacturer's traditional operating practices. However, manufacturers are reacting and changing to effectively deal with the new demands. This benefits everyone, including their traditional channels of distribution and their end user customers. Whether the benefits also reach the workforces of these manufacturers may be a particular point of interest.
Balancing this is a continuing consolidation on the supply side as well. For example, the 12 largest meat packing companies have 79 % of the revenue. This provides the scale for the suppliers...