As promised, here is our first industry breakdown to follow up after our October Coffee Hour. CWiB President, Anna Rummel ‘19, took time to provide some of the need-to-know insights into the retail industry:
What is this industry?
The retail industry is a huge part of our economy. It is the largest private employer in the United States and contributes $2.6 trillion to the US GDP. The retail industry consists of numerous different functions. Many people view retail jobs as mainly in-store sales, but there is so much more work being done behind the scenes. Supply-chain, corporate finance, and sustainability are huge parts of retail, but merchandising is the most central of the business functions. Merchandising consists of buying and planning. Buyers work with vendors to decide which products to sell in-store, online, or both. Planners use data and strategy to decide the allocations of those products for warehouses and stores. Overall, retail is a great industry if you are interested in strategy, consumer insights, and working with others.
Key industry terms
Customer vs Consumer: “The customer” is someone who actually enters the store or visits the website with the intent of purchasing from the firm. “The consumer” is a general term for a person who purchases products in the economy, but not specifically from your firm.
Omnichannel: This term refers to the practice of selling products online and in-store to produce a consistent customer experience. Omnichannel retailers include Target, Walmart, Macy’s, and Nordstrom, but smaller companies as well.
Off-Price Model: This is a type of store that sells products at a discounted price in order to attract more customers. For example, TJX companies, who own Marshall’s, HomeGoods, and TJ Maxx, have a large presence in the off-price industry. Department stores also have off-price models, such as Nordstrom Rack, Saks Off Fifth, The Bloomingdale’s Outlet, and recently Macy’s Backstage. Other examples of off-price models are DSW and Ross Stores.
Vendor-Direct Fulfillment (VDF): VDF is a huge buzzword in large retail firms recently. It means that instead of a firm purchasing product from a vendor and storing it in the firm’s warehouse, the customer can order a product and then the vendor will ship it directly to the customer. This allows for an “endless aisle” because it significantly expands the opportunities for firms to offer products to customers to choose what they want.
Conversion: Conversion is what happens when a customer (not consumer) decides to buy a product. For example, conversion happens when a customer opens a product page on the store’s website and purchases the product, rather than closing the page without purchasing. The same can be said for in-store conversion. A store “converts” when a customer enters the store and buys something, rather than leaving empty-handed.
Who are the key players in the industry/top firms?
The largest retailers by sales in the US are Walmart, Kroger, Amazon, Costco, and The Home Depot. Many large retail companies have formal internships and post-graduate training programs. Top retail employers for Colgate alumni include Starbucks, Amazon, Macy’s, and J.Crew.
Recruiting Timeline
The recruiting period is typically in the fall, so get started early with networking and researching companies that spark your interest.
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Thanks for reading, everyone! Be on the lookout for more industry breakdowns throughout the semester.
Colgate Women in Business 