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Horseshoe theory
Mar 7, 2005

ToxicSlurpee posted:

There was a big kerfluffle where I'm originally from...I want to say around 2003 or so when a big liquidator company like that got slapped hard for fraud. What some companies like that would do was mark the stock up then put adverts out that said "BIG CLOSING SALE! EVERYTHING MUST GO! EVERYTHING ON SALE! BUY BUY BUY!!!" It was apparently a pretty common practice already but they got greedy and people noticed. It was stuff like something that was $10 at the Walmart literally in the next building over being $18 at the closeout "sale."

What the Hilcos and other liquidator firms do is increase the price of something, say from $100 to $300, then do discount from the $300 down to, say, $150, and put up signs saying "50% DISCOUNT!", which is technically not fraudulent misrepresentation, since the discount is from the heavily marked up price.

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Owlofcreamcheese
May 22, 2005
Probation
Can't post for 9 years!
Buglord

Horseshoe theory posted:

What the Hilcos and other liquidator firms do is increase the price of something, say from $100 to $300, then do discount from the $300 down to, say, $150, and put up signs saying "50% DISCOUNT!", which is technically not fraudulent misrepresentation, since the discount is from the heavily marked up price.

That sounds like the sort of dumb loophole a stoner would make up where they think they can hire hookers because they brought a camera and that makes it pornography if you think about it.

Doctor Butts
May 21, 2002

I used to love going to K-Mart in middle school because we'd just moved to a development that was practically in the middle of nowhere (even though it was in the same county/only a half hour drive from downtown). K-Mart was the only thing to do, even if it was still a 15 minute drive away.

SubponticatePoster
Aug 9, 2004

Every day takes figurin' out all over again how to fuckin' live.
Slippery Tilde

JonathonSpectre posted:

Anyone here old enough to remember when K-Mart had "blue light specials?" They'd roll out a rack of pants or plates or some other loving thing and turn on a blue light and make an announcement over the loudspeaker that began with the famous, "ATTENTION K-MART SHOPPERS... there is a blue light special in... AISLE SEVEN!" and there would a God-damned stampede towards that flashing light.
I am. And K-Mart was always considered a low-rent place, even in its heyday. It was for people who couldn't afford to shop at JCPenney (already a low bar) and there was a stigma attached to having gotten things from there, even if they were Levis or Legos. Children being children, you would refer to the store as "Came Apart" and the "Came Apart special."

karlor
Apr 15, 2014

:911::ussr::911::ussr:
:ussr::911::ussr::911:
:911::ussr::911::ussr:
:ussr::911::ussr::911:
College Slice

JonathonSpectre posted:

Anyone here old enough to remember when K-Mart had "blue light specials?" They'd roll out a rack of pants or plates or some other loving thing and turn on a blue light and make an announcement over the loudspeaker that began with the famous, "ATTENTION K-MART SHOPPERS... there is a blue light special in... AISLE SEVEN!" and there would a God-damned stampede towards that flashing light.

I used to tease my younger brother that our parents bought him as a blue light special (I was an rear end in a top hat kid). That K-Mart has been a car dealership for well over a decade and the building sat vacant for several years before that.

V who's to say Calvin's dad wasn't copying me? V

karlor fucked around with this message at 21:27 on Jan 12, 2017

PT6A
Jan 5, 2006

Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

karlor posted:

I used to tease my younger brother that our parents bought him as a blue light special (I was an rear end in a top hat kid). That K-Mart has been a car dealership for well over a decade and the building sat vacant for several years before that.

Good job on copying Calvin's dad.

OwlFancier
Aug 22, 2013

JonathonSpectre posted:

Anyone here old enough to remember when K-Mart had "blue light specials?" They'd roll out a rack of pants or plates or some other loving thing and turn on a blue light and make an announcement over the loudspeaker that began with the famous, "ATTENTION K-MART SHOPPERS... there is a blue light special in... AISLE SEVEN!" and there would a God-damned stampede towards that flashing light.

I don't think we have had anything like that in the UK but I think there is ground to be broken in the combination shopping/gameshow experience in the digital age.

Perhaps we could televise the whole thing and also introduce inflatable obstacles for the shoppers to overcome in order to get at the deals.

OJ MIST 2 THE DICK
Sep 11, 2008

Anytime I need to see your face I just close my eyes
And I am taken to a place
Where your crystal minds and magenta feelings
Take up shelter in the base of my spine
Sweet like a chica cherry cola

-Cheap Trick

Nap Ghost

OwlFancier posted:

I don't think we have had anything like that in the UK but I think there is ground to be broken in the combination shopping/gameshow experience in the digital age.

Perhaps we could televise the whole thing and also introduce inflatable obstacles for the shoppers to overcome in order to get at the deals.

I take it you've never seen Supermarket Sweep

OwlFancier
Aug 22, 2013

exploded mummy posted:

I take it you've never seen Supermarket Sweep

No I know there's actual shopping gameshows I mean making normal shopping like a gameshow.

Like, you've been framed combined with its a knockout but for shopping.

blackguy32
Oct 1, 2005

Say, do you know how to do the walk?
I want to say that we used K-mart's bluelight internet service for a while, because it was one of the easiest to get rid of the banner on screen for and it was free.

Proud Christian Mom
Dec 20, 2006
READING COMPREHENSION IS HARD

exploded mummy posted:

I take it you've never seen Supermarket Sweep

this show and Shop 'Til You Drop are hilariously representative of America

OhFunny
Jun 26, 2013

EXTREMELY PISSED AT THE DNC
http://www.wkbw.com/news/national/american-apparel-stores-to-close-after-buyout

No one here will be surprised, but it's now confirmed all 110 American Apparel stores will close by the end of April.

edit: Gildan Activewear will also stutter American Apparel's clothing factory, one of the largest in the United States, production will be transferred to Central America.

OhFunny fucked around with this message at 00:56 on Jan 16, 2017

Nonsense
Jan 26, 2007

OhFunny posted:

http://www.wkbw.com/news/national/american-apparel-stores-to-close-after-buyout

No one here will be surprised, but it's now confirmed all 110 American Apparel stores will close by the end of April.

edit: Gildan Activewear will also stutter American Apparel's clothing factory, one of the largest in the United States, production will be transferred to Central America.

there was already a clearance, since the end of December at the local store. Time to get some USA Flag shirt and never wear it

glowing-fish
Feb 18, 2013

Keep grinding,
I hope you level up! :)

DrNutt posted:

The appeal of Kmart is that if you are ever feeling good and optimistic, you can go and get a big dose of despair absolutely free.

The last few times I've been in a K-Mart it was...well, mediocre, but not terrible? Like, they had cheap stuff, it was a little disorganized, but they had at least a little bit of what I needed. I would only go to K-Mart every three months because I needed a pair of shoes, or some sweat pants or socks. Once I bought a 20 dollar digital camera there. And then while I was there I bought myself some granola bars and goldfish crackers or something. It was a perfectly mediocre retail experience, but nothing that made me feel despair.

ToxicSlurpee
Nov 5, 2003

-=SEND HELP=-


Pillbug

glowing-fish posted:

The last few times I've been in a K-Mart it was...well, mediocre, but not terrible? Like, they had cheap stuff, it was a little disorganized, but they had at least a little bit of what I needed. I would only go to K-Mart every three months because I needed a pair of shoes, or some sweat pants or socks. Once I bought a 20 dollar digital camera there. And then while I was there I bought myself some granola bars and goldfish crackers or something. It was a perfectly mediocre retail experience, but nothing that made me feel despair.

That depends on the K-Mart. Some of them are just a decaying wreck. The one near me has a parking lot that has neither been patched nor paved in what has to be 20 years and it never has more than like ten cars in it. The building it's in has a couple other storefronts in it but they're empty and abandoned.

Then again it's also near a mall that used to be a big deal but now its parking lot is never more than 10% full.

withak
Jan 15, 2003


Fun Shoe

OhFunny posted:

http://www.wkbw.com/news/national/american-apparel-stores-to-close-after-buyout

No one here will be surprised, but it's now confirmed all 110 American Apparel stores will close by the end of April.

edit: Gildan Activewear will also stutter American Apparel's clothing factory, one of the largest in the United States, production will be transferred to Central America.

I am eagerly awaiting a response from the president-elect on twitter.

PT6A
Jan 5, 2006

Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

withak posted:

I am eagerly awaiting a response from the president-elect on twitter.

If anyone has a right to be pissed, it's Canadians since Gildan is a Canadian company -- we could have factories here!

On the other hand, no one in Canada wants to make cheap-rear end clothes, so Central America is probably a good call.

RBC
Nov 23, 2007

IM STILL SPENDING MONEY FROM 1888
gildan is one of the worst companies in canada

OhFunny
Jun 26, 2013

EXTREMELY PISSED AT THE DNC
Business Insider has a piece on retail. It's very grim.

The Limited: Closed all of it's 250 stores.

Macy's: Closing 68 stores this year and ultimately 100 stores over the next couple of years.

Sears: Closing 108 Kmart stores and 42 Sears stores by April. Bankruptcy predictions flying around like buzzers.

Wet Seal: Closing all 171 of its stores.

BCBG: Closing 120 stores, primarily in the U.S. Out of 175 US-based stores.

Bebe: Closing 25 stores. Which doesn't seem that bad?

Payless: Could close as many as 1,000 stores as part of a debt restructuring plan.

fishmech
Jul 16, 2006

by VideoGames
Salad Prong

OhFunny posted:


Bebe: Closing 25 stores. Which doesn't seem that bad?

The chain only has about 310 stores, so closing 25 of them is a pretty serious chunk.

Tiny Brontosaurus
Aug 1, 2013

by Lowtax

OhFunny posted:

Business Insider has a piece on retail. It's very grim.

The Limited: Closed all of it's 250 stores.

Macy's: Closing 68 stores this year and ultimately 100 stores over the next couple of years.

Sears: Closing 108 Kmart stores and 42 Sears stores by April. Bankruptcy predictions flying around like buzzers.

Wet Seal: Closing all 171 of its stores.

BCBG: Closing 120 stores, primarily in the U.S. Out of 175 US-based stores.

Bebe: Closing 25 stores. Which doesn't seem that bad?

Payless: Could close as many as 1,000 stores as part of a debt restructuring plan.

Is retail as a concept really threatened or are we just undergoing a generational shift in which stores succeed? Because I look at that list and all those stores sold shoddy, ugly garbage that people can't really be expected to want to buy anymore. They're mostly mall stores, and malls were a bad idea that's rightly fading away. Wet Seal, BCBG, and Bebe all sell teen girl clothing at an awkward price point where middle-class kids can't really afford to buy it without parental help, but it's not nice or stylish enough to attract wealthy shoppers. Forever 21 and Brandy Melville are much cheaper and trendier, and the staple clothing people used to buy at Sears and Macy's people now just by at Walmart and Target, where again it's much cheaper.

Doctor Butts
May 21, 2002

The article brings up the best point of all: retail is just totally over loving saturated. There's just too many retail outlets chasing customers.

Horseshoe theory
Mar 7, 2005

Tiny Brontosaurus posted:

Is retail as a concept really threatened or are we just undergoing a generational shift in which stores succeed?

Probably a bit from column A and a bit from column B - while Amazon is certainly slapping around most chains, a number are making GBS threads the bed because of generational shift, gross incompetence (see: Sears/K-Mart), etc.I imagine that there will be significant consolidation over the next 3-5 years in an attempt to respond to Amazon (how successful that will be is up in the air, though).

ToxicSlurpee
Nov 5, 2003

-=SEND HELP=-


Pillbug

Tiny Brontosaurus posted:

Is retail as a concept really threatened or are we just undergoing a generational shift in which stores succeed? Because I look at that list and all those stores sold shoddy, ugly garbage that people can't really be expected to want to buy anymore. They're mostly mall stores, and malls were a bad idea that's rightly fading away. Wet Seal, BCBG, and Bebe all sell teen girl clothing at an awkward price point where middle-class kids can't really afford to buy it without parental help, but it's not nice or stylish enough to attract wealthy shoppers. Forever 21 and Brandy Melville are much cheaper and trendier, and the staple clothing people used to buy at Sears and Macy's people now just by at Walmart and Target, where again it's much cheaper.

The only thing that will totally kill retail is when we get Star Trek replicators that can just magic anything you want into existence. Internet shopping is hammering retail in the dick pretty hard right now but internet shopping still has its limits. Some things you generally want to touch before you buy it. Clothes come to mind; you want to make sure it fits right and doesn't look terrible so ordering it online is questionable. Chances are if you break a tool you want one right now not in 2 to 12 days so you head for the hardware store. For a lot of things (again, hardware comes to mind) it's very useful to have a bunch of people in the store that know about what you're selling and can answer you questions in person. The internet is muscling in to that territory of course.

OneEightHundred
Feb 28, 2008

Soon, we will be unstoppable!

Tiny Brontosaurus posted:

Is retail as a concept really threatened or are we just undergoing a generational shift in which stores succeed? Because I look at that list and all those stores sold shoddy, ugly garbage that people can't really be expected to want to buy anymore. They're mostly mall stores, and malls were a bad idea that's rightly fading away. Wet Seal, BCBG, and Bebe all sell teen girl clothing at an awkward price point where middle-class kids can't really afford to buy it without parental help, but it's not nice or stylish enough to attract wealthy shoppers. Forever 21 and Brandy Melville are much cheaper and trendier, and the staple clothing people used to buy at Sears and Macy's people now just by at Walmart and Target, where again it's much cheaper.
Retail has always been very volatile and has already weathered a huge number of high-profile closings. It's a fairly inflexible model to begin with because of the long-term leases and the reputational difficulties of changing product categories, so even in good conditions, you're going to see stores close. Remember that Macy's itself is largely built out of bought-out defunct department stores.

There's also a level of general economic malaise among the middle class, consumer spending is still not back to pre-crisis levels and personal debt levels are high, especially among fresh college graduates that have had to contend with rapidly-rising education costs. Places that are on the upper end of the price scale are in a very bad position if people decide that they need to worry about their personal finances, and most mall stores fall into that category, so no surprise that malls are getting hammered. Outlet stores are the only retail category that's growing because people want stuff cheap.

Service-oriented sales and "shopping experiences" are suffering because the Internet is causing a lot of people to do all of their product research before they even come into the store. Online ordering is severely impacting categories driven by specific products like iPhones and media. Sears is committing seppuku at the altar of Ayn Rand. Through all of that, retail sales are down in general.

So, it's partly a generational shift, partly an economic problem, and partly individual cases of stupidity.

I don't know if malls are really a bad idea, but the retail sector is overexposed to Internet competition and needs to shrink, and the parts of it that amount to "upper middle class shopping experience" are in an unsustainable niche unless the economy improves more.

OneEightHundred fucked around with this message at 23:07 on Feb 12, 2017

PT6A
Jan 5, 2006

Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

Tiny Brontosaurus posted:

Is retail as a concept really threatened or are we just undergoing a generational shift in which stores succeed? Because I look at that list and all those stores sold shoddy, ugly garbage that people can't really be expected to want to buy anymore. They're mostly mall stores, and malls were a bad idea that's rightly fading away. Wet Seal, BCBG, and Bebe all sell teen girl clothing at an awkward price point where middle-class kids can't really afford to buy it without parental help, but it's not nice or stylish enough to attract wealthy shoppers. Forever 21 and Brandy Melville are much cheaper and trendier, and the staple clothing people used to buy at Sears and Macy's people now just by at Walmart and Target, where again it's much cheaper.

Is Zara and its associated brands a big thing in the US? They're absolutely loving gigantic in Europe and elsewhere, and the whole business model kicks the poo poo out of all the "mall stores" I used to go to. The quality/price ratio seems decent, too. I bought a pair of 25€ jeans there a few years ago when I was travelling and one of the pairs of jeans I brought on my trip got all hosed up, and they've lasted longer than jeans I bought for twice the price.

They also rotate through stock and designs at a furious rate so there's always a reason to go in and check things out.

fishmech
Jul 16, 2006

by VideoGames
Salad Prong

OneEightHundred posted:


I don't know if malls are really a bad idea, but the retail sector is overexposed to Internet competition and needs to shrink, and the parts of it that amount to "upper middle class shopping experience" are in an unsustainable niche unless the economy improves more.

It's less that malls themselves are bad ideas, and more that there was very extensive overbuilding of malls in the 80s through 2000s. We're seeing a lot of the ones that were never very needed closing down, creating a wave of consolidation into other malls in any given area. A lot of malls tried transitioning to those lovely "lifestyle centers" where all the stores have outside entrances on a fake main street sort of road, but those seem to be doing even worse - and that's for good reason, that was always a lovely sort of idea. All the inconvenience of a place you have to drive out to, none of the convenience of having an enclosed temperature controlled area when going between shops.

The best way to redevelop and extraneous mall, tends to be the projects that are more comprehensive. For example, in the town next to my hometown they knocked down a traditional mall that'd been mostly empty to years, and redeveloped the parcel of land into a bunch of different uses. One section was turned into a processing and shipping warehouse for mail order pharmacies, another large chunk was turned into townhouses and condos. Another large section was turned into a medical center, a branch of the county college system, and a new central location for the town's library. They also made the location a major park-and-ride center for the state and county bus systems. Only after all that was in, did they redevelop the rest of the land into smaller-scale shops in sort of a strip mall layout. As a result, it produced an area that works rather well.

fishmech fucked around with this message at 00:11 on Feb 13, 2017

KiteAuraan
Aug 5, 2014

JER GEDDA FERDA RADDA ARA!


PT6A posted:

They also rotate through stock and designs at a furious rate so there's always a reason to go in and check things out.

See, that's another issue in retail called fast fashion and there is a whole mess of environmental and workers' rights issues wrapped up in that, both in manufacturing and in the disposal of the unsold items.

DR FRASIER KRANG
Feb 4, 2005

"Are you forgetting that just this afternoon I was punched in the face by a turtle now dead?

PT6A posted:

Is Zara and its associated brands a big thing in the US? They're absolutely loving gigantic in Europe and elsewhere, and the whole business model kicks the poo poo out of all the "mall stores" I used to go to. The quality/price ratio seems decent, too. I bought a pair of 25€ jeans there a few years ago when I was travelling and one of the pairs of jeans I brought on my trip got all hosed up, and they've lasted longer than jeans I bought for twice the price.

They also rotate through stock and designs at a furious rate so there's always a reason to go in and check things out.

Seattle is getting one pretty soon. I'd never heard of it until recently.

OneEightHundred
Feb 28, 2008

Soon, we will be unstoppable!

fishmech posted:

A lot of malls tried transitioning to those lovely "lifestyle centers" where all the stores have outside entrances on a fake main street sort of road, but those seem to be doing even worse - and that's for good reason, that was always a lovely sort of idea. All the inconvenience of a place you have to drive out to, none of the convenience of having an enclosed temperature controlled area when going between shops.
I've always heard those called "shopping villages" and they make sense in more southern parts of the country with consistently mild climate.

I don't know if it was really overbuilding at the time when almost everything was sold at retail stores, and a lot of mall closures were just due to bets on the local economy that didn't pan out, or newly-developed competition.


As far as redevelopment going forward, I think that there's going to be a huge mess in the next couple years when a lot of malls are left with two empty anchors from Macy's and Sears closures and no clear successor. That'll be completely lethal to a lot of smaller malls that only have 3-4 anchors to begin with. Macy's has been the plan B for years now, but if they fail, then what? Malls that are declining but are in well-developed areas can convert some space to mixed-use, I've seen a few convert lots on the lower-traffic end into office space and professional services. AFAIK another big trend for mall survival lately has been to add more restaurants to promote a sort of shop-and-dine experience, but those wind up having to be new construction due to the ventilation and restroom requirements, so that doesn't solve the problem of the stores doing poorly.

OneEightHundred fucked around with this message at 03:16 on Feb 13, 2017

fishmech
Jul 16, 2006

by VideoGames
Salad Prong

OneEightHundred posted:

I've always heard those called "shopping villages" and they make sense in more Southern parts of the country with consistently mild climate.

I don't know if it was really overbuilding at the time when almost everything was sold at retail stores, and a lot of mall closures were just due to bets on the local economy that didn't pan out, or newly-developed competition.


As far as redevelopment going forward, I think that there's going to be a huge mess in the next couple years when a lot of malls are left with two empty anchors from Macy's and Sears closures and no clear successor. That'll be completely lethal to a lot of smaller malls that only have 3-4 anchors to begin with. Malls that are declining but are in well-developed areas can convert some space to mixed-use, I've seen a few convert lots on the lower-traffic end into office space and professional services. AFAIK another big trend for mall survival lately has been to add more restaurants to promote a sort of shop-and-dine experience, but last I knew converting non-restaurant lots into restaurant lots is complicated due to ventilation and restroom requirements, so that doesn't solve the problem of the stores doing poorly.

Perhaps, but a lot of those Southern places are pretty unpleasant over the summer months, what with the heat and humidity. Really well planned and thought out ones can deal with it, many of the projects don't have that level of care.

It was definitely overbuilding - many of those malls never managed to get close to full occupancy at the best of times, and that was down to a simple lack of customers. They would have required much more population and economic growth in the places they were built in order to keep going.

Yeah converting significant chunks of an existing mall to office space is getting more and more popular, and can often produce a really nice synergy of bringing in consistent customers. Some other malls both do that and bring in a community college branch to one of their empty anchor tenants - though that relies on having a local/county government willing to spend money on expanding education. One major reason those projects succeed is that a shopping mall is often an informal hub or major transfer point for local bus services, where more typical office parks or community college campuses won't be.

PT6A
Jan 5, 2006

Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

KiteAuraan posted:

See, that's another issue in retail called fast fashion and there is a whole mess of environmental and workers' rights issues wrapped up in that, both in manufacturing and in the disposal of the unsold items.

There are still issues but one of the reasons I like Zara over some others in that space is that they manufacture a significant portion of their stuff either in the EU, or in nearby countries (Turkey and Morocco come to mind) where they can ensure proper employment standards are met (theoretically) instead of making poo poo in Bangladesh or Southeast Asia.

It's not perfect but it's a gently caress sight better than a lot of other manufacturers.

KiteAuraan
Aug 5, 2014

JER GEDDA FERDA RADDA ARA!


PT6A posted:

There are still issues but one of the reasons I like Zara over some others in that space is that they manufacture a significant portion of their stuff either in the EU, or in nearby countries (Turkey and Morocco come to mind) where they can ensure proper employment standards are met (theoretically) instead of making poo poo in Bangladesh or Southeast Asia.

It's not perfect but it's a gently caress sight better than a lot of other manufacturers.

I remember when I was reading up on fast fashion, which was about 3 years ago, with a then 3 year old article, Zara was cited as one of the ones that actually was making major steps towards being less lovely, along with H&M if I recall. The big ones that weren't changing were mostly American companies.

Of course there is still the issue of end of life, but that's really an issue with all clothing discarded or unsold, even before fast fashion trends caught on in retail.

OneEightHundred
Feb 28, 2008

Soon, we will be unstoppable!

fishmech posted:

Perhaps, but a lot of those Southern places are pretty unpleasant over the summer months, what with the heat and humidity. Really well planned and thought out ones can deal with it, many of the projects don't have that level of care.
Yes, but it's not nearly as serious of an issue as rain and snow.

By "southern" I meant pretty much anything at a southern latitude too, they're all over the place in California for completely predictable reasons.

Bar Ran Dun
Jan 22, 2006




PT6A posted:

They also rotate through stock and designs at a furious rate so there's always a reason to go in and check things out.

Zara does well because it's supply chain is able to respond to demand quickly.

The way it gets worded in textbooks is that "desicion windows" are shrinking and that the product life cycle is compressing. Consumers are being pickier, competition is increasing, and margins are shrinking. Zara is able to give up on products that don't sell faster, and scale up on products that do sell faster.

This is a seperate thing from fast fashion. It's happening in most consumer market segments. The companies that are succeeding in this enviroment share two big things in common. The first is kickass tight quick supply chains, lean and flexible are the buzzwords. The second is "customer facing horizontal" that is thier goal is to respond to demand signals from customers, rather than to try to simply manufacture demand by advertising. Successful companies are also tending towards horizontal structural rather than vertical integration (Zara being an exception here).

If these trends continue remains to be seen. The reaction to globalization currently occuring could potentially end both trends.

Tiny Brontosaurus
Aug 1, 2013

by Lowtax

BrandorKP posted:

Zara does well because it's supply chain is able to respond to demand quickly.

The way it gets worded in textbooks is that "desicion windows" are shrinking and that the product life cycle is compressing. Consumers are being pickier, competition is increasing, and margins are shrinking. Zara is able to give up on products that don't sell faster, and scale up on products that do sell faster.

This is a seperate thing from fast fashion. It's happening in most consumer market segments. The companies that are succeeding in this enviroment share two big things in common. The first is kickass tight quick supply chains, lean and flexible are the buzzwords. The second is "customer facing horizontal" that is thier goal is to respond to demand signals from customers, rather than to try to simply manufacture demand by advertising. Successful companies are also tending towards horizontal structural rather than vertical integration (Zara being an exception here).

If these trends continue remains to be seen. The reaction to globalization currently occuring could potentially end both trends.

What's horizontal structure?

Bar Ran Dun
Jan 22, 2006




Think of business moving towards the rhizome and away from the arboreal in terms of the organizational structure of the business.

Instead of having a top down traditional organization structure, the goal is for information to flow upwards to all the different parts of the supply chain automatically, usually through automation and information sharing. Desicions are made based on this information in a decentralized way, across the multiple companies that make up the supply chain. Market competition isn't between the individual companies but between the supply chains made up of multiple companies. The goal is to have even low level employees be able to make desicions based on the real situation they encounter, rather than to have what they should do dictated to them from above by people multiple steps removed. If what they are doing works those actions get passed upwards and then disseminated to other locations. Apply that to the whole supply chain across multiple companies. The unifying factor is that everything needs to be "customer facing".

Bar Ran Dun fucked around with this message at 20:35 on Feb 20, 2017

Bar Ran Dun
Jan 22, 2006




The text on the subject that is probably the best is: Logistics and Supply Chain Management (4th Edition) (Financial Times Series)
ISBN-13: 978-0273731122

What I'm saying is also influenced by my MIS professor and masters program, program head, an IBM industrial systems guy.

Tiny Brontosaurus
Aug 1, 2013

by Lowtax

BrandorKP posted:

Think of business moving towards the rhizome and away from the arboreal in terms of the organizational structure of the business.

Instead of having a top down traditional organization structure, the goal is for information to flow upwards to all the different parts of the supply chain automatically, usually through automation and information sharing. Desicions are made based on this information in a decentralized way, across the multiple companies that make up the supply chain. Market competition isn't between the individual companies but between the supply chains made up of multiple companies. The goal is to have even low level employees be able to make desicions based on the real situation they encounter, rather than to have what they should do dictated to them from above by people multiple steps removed. If what they are doing works those actions get passed upwards and then disseminated to other locations. Apply that to the whole supply chain across multiple companies. The unifying factor is that everything needs to be "customer facing".

That's really interesting, can you give an example of this kind of decision-making?

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Bar Ran Dun
Jan 22, 2006




Tiny Brontosaurus posted:

That's really interesting, can you give an example of this kind of decision-making?

Most of my context is the logistics portion of things, the front line retail isn't my personal focus but I have discussed it in grad school. The discussion was on the topic of inventories, yet another related trend is that most companies want to hold as little inventory as possible. The bolded portion is an example of an employee making decisions.

"" posted:

Some of the other costs discussed I think can be thought of in terms of a broader category. It costs money to hold onto physical things. Physical things have to be insured, they have to be housed and protected from damages resulting from the elements. They might brittle with age or spoil with temperature. Things have to be moved. Handling, damage, warehousing, and insurance all of these result from the problem of having to deal with physical objects that make up inventory. But these costs are also going to vary with what the specific inventory is. If inventory, can be stored in a pile, in the open, can transported cheaply in bulk, doesn’t degrade and doesn’t need to be insured it may have very low physical carrying costs. Something like iron ore may would have very low carrying costs. Another material might have to be stored at a cold temperature linked to its usable life span. It might require 3rd party certification of its condition when it is transported. Think the polymers used to make some new aircraft. Analysis of these carrying costs would be very product specific.

Inventory control and cycle counting would seem be about the front lines. How much does it cost to keep the shelves stocked? To keep the store operating and the checkout lines running?
Some else I had in mind while reading that article was that having too much inventory has an opportunity cost of preventing the purchase of more inventory if prices fall. My father has been in front line retail for about forty years, I’m going to greatly simplify an example he has given me. Let’s say you run a liquor store. You have shelf space to keep 5 of any given bottle in a row on the shelf. You don’t want to keep the shelves full at 5 bottles all the time. It’s best order when there is one left and restock up to 3. Because what happens is that distributors often control when a product goes on sale. They sell the product to the stores at a reduced rate when this happens. If the shelves are full the opportunity to purchase stock at a significantly reduced price is missed. During a sale you can stock the shelves fully up to five units and then try to keep them there. When the sale ends you have five units on the shelf that were purchased at the sale price, that now can be sold at the non-sale price. Not overstocking, having too much inventory allows one to take advantage of price fluctuations, in the manner prescribed by Benjamin Graham: “Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and sell wisely when they advance a great deal.” (Graham, B)

I can't remember if I talked about it on SA or at grad school, but by managing his inventory smartly my dad can make the liquor store he runs (attached to the grocery store that he works for) make significantly more money than it should otherwise. Retail store have predictable returns based on the number of people in the stores area in the demographic for the store. So by controlling for the the number of customers stores in demographically differing areas can be compared internally within a company. Dad's practices can have his store generating 150 to 200% above what he should be making for the customer base in the area of his store. That's an example of the effectiveness an employee being able to make decisions based on the real situation they encounter can have. Now in my father's case the company he works for does not encourage this. They go out of their way to make it as hard as possible for him to make his own decisions. He gets a new manager and they tell him to stop doing things like having discussions with the customers regarding what they like to drink and what based on that they might also like to try. They tell him to stock and order inventory according to their standardized methods, ignoring his knowledge of the distributors sales schedules. Eventually the relative profit for his store falls, they poo poo a brick, and let him go back to doing things the way he wants. That's top down. Bottom up would look at his choices and go, holy poo poo we can make more money without more work, and make the customers happier, if we alter the systems we use to run stores with this information.

A more abstract hypothetical example would be a frontline employee discovering that if we do X then we sell more Y. Or an employee finding "that customers seem to like it when we do Z a lot" in traditional business structure those impulses get crushed. The better way to run things is to encourage and reward employees for doing them and to spread those good practices. The thing is for this to work (outside of wierdos like my dad, who persist out of pride in doing his job well in spite of being treated like poo poo) employees have to be treated well and adequately compensated. They have to care and give a gently caress.

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