Retailing is a dynamic, vital, and important segment in the economy. Almost one in five workers in the United States is employed in the retail industry. Over one million retailing companies operate more than 1.4 million retail establishments. Retailing is defined as the timely delivery of goods and services to consumers at the right price and place. Whether a firm sells to consumers in a store, through the mail, over the phone, through television, door-to-door, through vending machines, or over the Internet…it is retailing. The most common types of retail establishments are as follows:

Department Store: It is a departmentalized retail institution offering a large variety of hard and soft goods, including home furnishings, household linens and dry goods, and apparel and accessories for men, women, and children.

Discounters/Mass Merchandiser: A self-service store displaying and selling all kinds of merchandise at lower prices than other retailers. Their key to success is price and convenience. Mass merchandisers buy in large quantities and sell at lower prices than competitors.

Specialty Store: A retail store concentrating on a limited range of merchandise such as jewelry, books, men’s or women’s apparel, or accessories.

Warehouse Clubs/Superstore: A self-service retailer with cash-and-carry checkout operations. These retailers attempt to minimize all their costs and consumer amenities. The main draw is national brands at low prices. Membership may be required.

Wholesale Club: A self-service retailer which offers nationally advertised brand name goods at wholesale prices to businesses and group members only. These stores have a warehouse environment with little or no frills.

Factory Outlet: There are two types of outlet retailers which are those that use a factory-type location to sell clearance merchandise received from other retailers or manufacturers, and vendors who use a factory outlet store location to sell their own goods (excess stock, seconds, and returns, etc.) at sharply discounted prices.

Catalog: A retailer that displays and sells merchandise through paper magazines sent to customers at their homes.

Expected Growth in the Retail Industry

Many retailers were adversely impacted by the tragic events of September 11, 2001. Since retailing is driven by consumer confidence, the loss of consumer confidence has reduced consumer spending. Shopper traffic took a nosedive causing retailers to downgrade their sales and profit projections for the remainder of 2001. But despite the financial impact of the terrorist attacks, retailing is expected to experience growth this year. Retailing is dependent on changes in the social, political, and economic environment. Therefore, there is reason to expect that American consumers will continue to want more and different goods and services and have more money to spend as their personal income increases. This guarantees the continued growth of retailing. Sales and earnings’ figures offer a glimpse of the future economic health and prosperity of a company.

Top 10 U.S. Retailers in 2001

Wal-Mart and Kroger are the two largest retailers in the United States
(see www.stores.org).

In 2001, Wal-Mart put even more distance between itself and its nearest competition, with sales volume of $193.2 billion and earnings of nearly $6.3 billion. Wal-Mart is second only to Exxon Mobil as the largest company in the world as measured by sales.

Kroger is number two on the top 10 list, with a sales volume of $49 billion and earnings of nearly $1.2 billion. Home Depot is number three with sales of $45.7 billion and earnings of $2.5 billion. Sears, in the fourth position had sales of $40.9 billion and earnings of $1.3 billion. Kmart is fifth on the top 10 list in 2001 with sales of $37 billion and loss earnings of $244 million. Albertson’s reported sales of $36.7 billion and earnings of $756 million.

Target and JCPenney are seventh and eighth, respectively, on the top 10 list in 2001. Target reported sales of $36.3 billion and earnings of $1.2 billion, and JCPenney reported sales of $32.6 billion and loss earnings of $409 million. Costco is the ninth largest retailer in 2001 with sales of $32.1 billion and earnings of $631.4 million. Number 10 Safeway had sales of $31.9 billion and earnings of nearly $1.1 billion.

Top 10 U.S. Specialty Stores By Sales Volume and Earnings in 2001

The top 10 specialty stores on Stores’ Top 100 Specialty Store list for 2001 in descending order are: Best Buy, the Gap, the Circuit City Group, Office Depot, Toys “R” Us, Staples, the Limited, TJX, CompUSA, and OfficeMax. Best Buy, which heads the list, was ranked second in 2000. The Gap knocked off Best Buy and Toys “R” Us to become the second ranked specialty store in 2001. The Circuit City Group ranked third, a noticeable drop from their first place position in 2000. Office Depot, ranked number four, rose from its number five position in 2000. Toys “R” Us slipped from third place in 2000 to fifth in 2001. Staples replaced the Limited for sixth place in 2001, thereby forcing the Limited to seventh place. TJX, CompUSA, and OfficeMax retained their rank of eighth, ninth and tenth positions, respectively, for 2000 and 2001.

Job Opportunities for African Americans in the Retail Industry

Retailing is an occupation well suited to African Americans with a competitive personality. It is an industry that seeks workers from a variety of academic disciplines. Cora Davis, (right) vice president and Divisional Merchandise manager for Wal-Mart Stores division of Wal-Mart Stores, Inc., believes retailing is a very viable industry for African-American college graduates. She states, “{Even though} the U.S. economy is presently somewhat sluggish, diversity is a top priority within Wal-Mart stores. Wal-Mart is the largest private employer of people of color with more than 140,000 African Americans and more than 87,000 Hispanic associates.”

Sharon Saunders, vice president and director of Employment, Administration, Diversity and Work-life at JCPenney, states, “Today, companies are looking to reflect the demographics of the communities they serve. There are still strong initiatives in place to recruit more diverse candidates. In retailing, having a diverse workforce helps to provide a competitive advantage in selecting appropriate merchandise, and services in support of the customer base.” Billye Alexander, senior regional vice president for Sears, Roebuck and Co., says, “Retailing is definitely a viable industry for African-American college graduates. Your success is measured by very objective sales and profit results...there is not much subjectivity in analyzing how you are performing.”

Today’s retail industry is more than just shelving merchandise, itemizing inventory, and making sales. Retailing hires numerous qualified individuals in growth positions, from store managers to Internet specialists. At JCPenney, most trainees and/or interns are business, information technology, marketing, retail, and merchandising majors, but any student with strong leadership skills and a flair for retail concepts can be successful, states Sharon Saunders.

According to Billye Alexander, “Retail offers a wide variety of career paths which allows you to have a variety of [job] assignments over the course of your career. With a BA or BS degree, someone interested in being a store manager will find that they have the capacity to reach upper- level management positions. Individuals with degrees in a specialty area, or an advance degree will find career opportunities in finance, information technology, legal, logistics, credit, product repair services, facilities management, real estate, construction, visual, asset protection, marketing, public relations, human resources, compensation, benefits, diversity, and talent management.”

Tips and Requirements for Success in Retailing

What are tips and/or requirements for success and for breaking into the retail industry? Typically, retailing is an industry where one needs some very basic experience. Internships or part-time jobs with retailers are good ways to gain experience, as well as an understanding of the dynamics of the retail business, according to Cora Davis (Wal-Mart), Sharon Saunders (JC Penney), and Billye Alexander (Sears).

Sharon Saunders of JCPenney further stresses the importance of leadership skills (active leadership roles in campus organizations), good communication skills, and good performance in business courses. She also states that a passion for retailing, a positive attitude and work ethic, and the ability to relocate are also qualities that enhance the probability of success.

Is retailing the occupation for you? According to Cora Davis, “The number one tip for success [in retailing] is to be personally highly motivated and have a passion for the dynamics of the industry. Do you enjoy working with people? Do you get excited about the ability to select items and enjoy the satisfaction of watching them arrive, sell and impact a business plan?”

Salary and Wages in Retailing

There is a wide range of entry-level job opportunities and salary ranges for new college graduates in retailing. Salaries are competitive and vary by job title and experience. For example, entry-level jobs in retail, credit and logistics at Sears have starting salaries of $35,000 or higher. The company also has entry-level positions in Audit and Information Technology, with competitive starting salaries according to Billye Alexander. At JCPenney, entry-level salaries range from $32,000 - $34,000 for Department Management Trainee to $40,000 - $50,000 for Information Technology Systems Analyst (with incentives granted on GPA, prior work experience, and higher-level degrees), according to Sharon Saunders. Careers in Retailing 2001 (January 2001) reports retail starting salaries ranging from the low $20,000s for those in a management/buyer training program to the mid $30,000s for store managers. Retail graduates at Purdue University in May 2000 report starting salaries ranging from a low of $22,000 - $25,000 to a high of $35,000 - $40,000, with the average salary being $30,000.

The Future of Retailing

The retail industry can be characterized as a sector riddled with change, and one experiencing a battle for market power and dominance. Billye Alexander of Sears states, “Mergers and downsizing are a fact of life in our industry, as it is in any other dependent on economic factors which impact consumer spending.” Cora Davis of Wal-Mart Stores, Inc., agrees and states, “Retailing is not immune to the downsizing and merger economic trends that are occurring in all industries today.” While Internet retailing is projected to grow, it is not expected that the Internet will ever replace the store. Consumers will always like to touch, feel, smell, see and/or hear the merchandise. Until stores can “beam” merchandise directly to homes, the Internet will never replace the store. The retail winners in the future will be those retailers who offer access to consumers by stores, telephone, catalog, and the Internet, i.e., multi-channel retailers.

Dr. Thelma Snuggs is an assistant professor of retailing at Purdue University.