Retail Leadership Symposium (Consumer Science 250)
By Students Nick Knoche, Seungyeon (Linda) Kang, Carianna Juliano, Cullen Jozwiakowski, Andrew Jones, Taylor Johnson, Matthew Isaac, Ellie Hoffmann-Avina, and Adriana Hernandez
After the Retail Symposium class met with Ross Store’s Alyssa Upton (District Manager) and Chanel Horton (Store Manager) on March 15, 2017, there was a huge take away on not only Ross, but off-price retailers as a whole. This sector of the retail industry has continued to grow in recent years, as the rest of the retail industry has been hurting. In fact, a report from the NPD (National Purchase Diary) Group’s data service from July 2016 found that off price retailers were luring in two-thirds of shoppers. Ross, T.J. Maxx, and Burlington are all stores that have been around for over half a century, but have become more relevant in the past couple of decades. You might be wondering why they are relevant, and why they have not been hurt by the recent decline of retail.
Off Price Taking Off
A cornerstone of Ross’s success was summed up by Alyssa Upton, when she stated,
We want people feel like they are on a treasure hunt, not a dumpster dive.
The affordable and rotating stock continues to leave customers wanting more, and to find their next “treasure.” Couple this gamified shopping experience with well-maintained stores and top notch customer service, and you have a model that promises to stay relevant for years to come. And if approximately 1,500 stores, and hundreds more each year does not speak of relevance, we don’t know what does.
One of the main reasons for this success is that off-price retailers have an advantage that Amazon cannot match. For many other retailers, they have very little to distinguish themselves from their competitors. Most focus on customer service and pricing. According to Business Insider, Morgan Stanley predicts that by 2020, Amazon will have control of almost 20% of the apparel market. This is because unless stores provide excellent customer service, most people would rather just go onto Amazon or other similar websites, because it is more convenient. Pricing is now almost impossible for most retailers, because they cannot compete with Amazon and Walmart with their prices. However, off-price stores like Ross have an advantage by combining low prices with the element of surprise. As Alyssa said, shopping in Ross is like a treasure hunt. You are not exactly sure what you are going to find, and every once in a while, you might find a quality product for a lower price than you could find elsewhere. This is a significant advantage for these stores, because Amazon cannot create this same experience.
Another pivotal factor for their success is the actual products on the racks. Ross’ buyers hunt throughout the year for the trendiest brand names and designer fashions for the entire family and home. The home category is cited as one of the biggest contributors of boosted sales. Others have taken note of and followed. Macy’s, for example, is considering testing merchandise not typically found in their stores including toys, home décor, and pet accessories.
Investing in the communities that Ross operates in has always been an important part of their corporate responsibility. The retail industry is responsible for supporting one fourth of jobs in America. Ross understands the value in taking care of it own and as well as the communities they come from. Whenever a new distribution center is opened it becomes a priority to hire from within the community. These efforts are met by hosting job fairs and partnering up with agencies such the local Employment Development offices and the YMCA. Even in states with strict regulations for flyers and adverts, Ross still finds a way. Alyssa encountered that exact problem at one of the stores she opened and tried recruiting in person by standing at malls and other outlets. The result is a workforce consisting of around 90% associates who come from the local community. Ross is the kind of company that has a positive effect in the community by supporting their local economy and residents. Many are attracted to careers within Ross because of the difference they are able to make with the people they work with.