Multi-Channel Retailing - Global Retail Industry and Costco Wholesale - Speech or Presentation Example

? Multi-Channel Retailing Brief Overview of the Global Retail Industry & Costco Wholesale The Retail Industry In relation to the present trend in theglobal retail industry, it has been recognized that there is an evolving scenario wherein the marketers are highly focused on addressing different needs and desires of the customers. The organizations are significantly recognized to incorporate effective multi-faceted strategies to meet the desires and needs of the customers irrespective of their demographic condition (Levy & Weitz, 2012). Costco Wholesale Costco Wholesale Corporation (Costco) is one of the renowned and leading multifunctional retail organizations, which has established a sustainable position in the fiercely competitive retail industry. The global retail operations of Costco can be primarily classified into four major segments such as: Discount and Variety Retail – Warehouse Clubs and Superstores 2. Grocery Retail 3. Gasoline Retailers and, 4. Online Retailing Source: (Costco Wholesale Corporation, 2012) Advantages Offered by Costco’s Each Distribution Channel The distribution facilities offered by Costco incorporate a large number of potential buyers from different demographic backgrounds that are segregated based on family or business, income-level, age and gender. According to the present revolutionary transformations in the retail format, customers are highly focused on purchasing goods through online or catalog shopping. Therefore, the distribution process of Costco highly utilizes the benefits provided by the online format in order to provide adequate support to each group of customers. The company, in this regard, is highly focused on targeting the customers within the age group of 18 to 45 years who generally prefer to purchase goods through online retailing format (Costco Wholesale Corporation, 2012). In relation to the similar retailers such as Wal-Mart, the organization has been identified as one of the major competitor for Costco. However, the organization is more competent than its competitors regardless catalogue/online shopping or store retail operations. Differentiating Buying Process of the Customers In relation to the distribution process of products, the operational process of Costco incorporates an effective strategy that ensures to provide various advantages to the organization. Therefore, the major advantageous factors that Costco avail from its exceptional distribution channels including brick and mortar store and catalogue or e-commerce format are depicted hereunder: The ‘shopping in person’ customers of Costco generally tend to purchase their preferred products through a modest online or catalogue format. In this context, the steps of online or catalogue shopping have been discussed hereunder. Identifying Needs: Identifying needs of the products is the initial step where the in-person customers tend to recognize merchandise(s) in accordance with their taste and preference. Searching and Obtaining Information: In this step, the in person customers are focused on searching information about the online store or catalogue regarding the availability, buying terms and condition, payment option and shipping facility among others. Evaluating and Selecting Retailers/Channels: After obtaining information about online/catalogue, the customers evaluate and select appropriate retailer or distribution channel. Visiting Online Shopping Website/ Catalogue: Visiting online shopping website/catalogue is the final step customers wherein the in person customers purchase their preferred or desired products via complying each term and condition of the retailer. In the due course of time, after a consumer starts to continuously visit an online website for purchase his/her loyalty towards the retailer increases. Source: (Costco Wholesale Corporation, 2012) Retail Strategy: Focusing on Retail-Mix Elements Location: Location can be considered as one of the primary elements for any retail organization to efficiently perform its various distributional activities. In the context of the present competitive environment, the retail strategy of Costco incorporates effective locations with regard to its brick and mortar store operations across the globe. Moreover, the online presence enables Costco to deliver appropriate goods to the customers located in different places (Costco Wholesale Corporation, 2012). Customer Loyalty: The retail strategy of Costco also tends to promote customer loyalty initiatives. In this regard, the organization has been identified to incorporate different promotional activities for the member customers in its different retail units (Costco Wholesale Corporation, 2012). Distribution and Information Management: The distribution and information management process of the organization incorporates effective practices with regard to aligning products in accordance with the preference and the quantity of the member customers. Moreover, the process also facilitates to maintain adequate information of the customers’ needs along with providing products at the right time (Levy & Weitz, 2012; Costco Wholesale Corporation, 2012) Human Resource Management: The Human Resource Management (HRM) department of Costco also plays a decisive role for the organization to manage and increase the performance of the workforce. In this context, the HRM policies of Costco signify adequate provisions that help to augment the performance of each individual employee along with enabling the company to distribute its range of retail products to the different groups of customers (Levy & Weitz, 2012; Costco Wholesale Corporation, 2012). Vendor Relationships: The process of vendor relationship has been identified as one of the essential practices of Costco that enables it to build its sustainable position in the respective business industry. The organization generally tends to incorporate global distributors in its strategic priority in terms of strategizing its distribution processes. Moreover, effective communication strategies also play a major role for Costco to build strong relationships with the vendors located in different geographical regions (Costco Wholesale Corporation, 2012). Customer Service: Customer service is also an important and most essential retail element of Costco that enable it to gain competitive advantage. The customer service department of the organization tends to provide adequate assistance to each of its customers regarding their queries associated with membership, orders, shipping, information of products/services and promotional offers among others (Levy & Weitz, 2012). Financial Strategy of Costco The financial strategy of Costco generally incorporates the process of accomplishing its Return on Investment (ROI) and gaining substantial figure of potential customers across the globe. Goal of accomplishing ROI has been identified as one of the primary endeavors of Costco’s financial strategy. The organization in this regard is highly focused on achieving ROI objectives rather than performing for obtaining a large profit margin (Costco Wholesale Corporation, 2012). Additionally, increasing the number of its distribution channels and minimizing inventory cost can also be considered as the major strategies of the company to achieve its financial objectives. In this context, the organization is highly focused on directly placing the final product to the point of sale (POS) after purchasing them from multiple distributors and vendors. This strategy helps the organization to minimize inventory cost and facilitates to achieve the desired financial goals (Costco Wholesale Corporation, 2012). In relation to the financial strategy of Costco, it has been identified that the company tends to comply with an effective Strategic Profit Model (SPM) that significantly represents operating profit margin, asset turnover rate and return on asset of the organization. With reference to the 10K report of SEC (2010), the SPM has been identified that the company has maintained the operating profit margin at 10%. Similarly, it had maintained asset turnover rate at 3.2 and return on asset at 8.1% during the year 2010 (Levy & Weitz, 2012). Summarizing Findings With reference to various findings, it has been identified that there are certain major factors and practices utilized by a retail organization that can provide adequate advantages to the organization to empower its competitive position. Assortment and variety of products in accordance with the changing market trends can provide adequate opportunities to a retail organization in order to develop its capability of obtaining large group of potential customers. Moreover, the incorporation of effective strategies associated with managing distribution channels can also facilitate the retail organizations such as Costco to deliver the sought after products/services in right time which in turn can facilitate the organization to build strong brand image as well as ensure long-term sustainability in the growing retail industry. Additionally, the identification of purchasing behavior of customers and implementation of appropriate selling format can further enable the organizations such as Costco to meet the desires and needs of the customers. And conclusively, it has further been observed that an effective and valid financial strategy is also a major attribute for the retail organizations to attain their financial objectives and build strong brand identity in the growing retail industry. References Costco Wholesale Corporation. (2012). Annual Report 2012. Retrieved from http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9MTE5MjYzfENoaWxkSUQ9LTF8VHlwZT0z&t=1 Levy, M. & Weitz, B. (2012). Retailing Management. New York: The McGraw-Hill Companies, Inc. Read More