Chapter 7 Blog - Bleak Friday

Summary:

November 27th this year marks Black Friday, the day after Thanksgiving in the United States. Black Friday is said to be the start of the Holiday shopping when stores start making profits. Many shoppers wait in long lineups outside stores for dramatically discounted items on this day. However, it seems that shoppers are finding alternative ways to purchase goods. Conventional in-store shopping is expected to decline by 3% this year, meanwhile online sales are expected to grow by 11%. So what makes online shopping such an attractive way of purchasing goods? First off you can avoid the time and money wasted for transportation to the stores. In addition you can avoid lineups and local sales taxes if you purchase goods online. Amazon, an online commerce giantsaw its sales rise $5.5 billion in the third quarter of the year even through the recession. Large companies are finding that they have to offer their goods online as well as in stores to keep up with the rapidly changing market. Companies such as Macy's are also cashing in with online retailing websites. It is reported that for every dollar a customer spends online at the Macy's website they spend $5.70 in the store within the next 10 days.

Connections:

This article is based on non-store retailing. Since the book was made year before internet retailing came out it is not mentioned. However, internet retailing is a form of non store retailing that has rapidly gained popularity in the recent years. It is becoming one of the more common ways of acquiring goods. This article also mentions several types of stores such as department stores and general merchandising retailers. These are the different stores mentioned in the articles that hold major discounts on Black Friday. Many stores are also adopting an integrated channel of distribution. Consumer good companies such as Procter & Gamble are selling goods online straight to the consumer skipping the retailer and wholesaler step. With reduced steps in the channel of distribution of a good, goods can be offered at a lower price because there are less transactions.

Reflection:

This article has quite an interesting concept companies of cashing in on internet retailing. I found the report with Macy’s really surprising, how for everyone one dollar a person spends online at their website, within ten days they will spend $5.70 in their stores. Retailing is rapidly changing; a decade ago internet retailing was unheard of. However, internet shopping is now becoming a common way to purchase goods. I personally don’t see my parents purchase goods online often due to the security issue with credit card numbers. However websites online generally offer brands for a lot cheaper than in stores because they are skipping the retail step of the channels of distribution. Perhaps if the security issue was solved internet retailing would be a lot more common.