Determining the target market and the positioning for a retail store are very important marketing decisions. In a small

3. Determining the target market and the positioning for a retail store are very important marketing decisions. In a small

FOCUS ON Technology

“Mirror, mirror on the wall, who’s the fairest of them all?” This is no

1. Visit www.ezface.com or www.ray-ban.com/usa/science/ fairy tale feature anymore and can be found online or at a retailer

virtual-mirror and use the virtual mirror to try on makeup or near you. EZFace, a virtual mirror using augmented reality, is

sunglasses. Does this technology help you select an changing the cosmetics aisle in some Walmart stores. A shopper

appropriate product for your face? (AACSB: Communication; stands in front of the magical mirror, swipes the bar code of the

Use of IT; Reflective Thinking)

cosmetic she is interested in, and virtually tries it on without open-

2. Find other examples of how retailers are using digital ing the package. No more regrets about buying the wrong shade technologies, such as digital signage and mobile of lipstick! Self-service retailers are interested in this technology technologies, to better serve customers. (AACSB: because it can reduce damaged inventory from consumers open- Communication; Use of IT; Reflective Thinking) ing a package and then not buying it. This is just one of the inter-

active digital technologies that retailers are experimenting with; keep an eye out for many more!

FOCUS ON Ethics

In the United States, paying for purchases with a credit card is old

1. What are the ethical implications of encouraging electronic news. That’s not so in much of Asia. The United States leads the

payment methods compared to cash payments in Asian world in credit cards per capita—2.01, which is much higher than

countries? (AACSB: Communication; Ethical Reasoning; many Asian countries, such as China with 0.15 cards per capita or

Reflective Thinking)

India with 0.02. But that’s changing dramatically. Between 2004

2. Most stores have eliminated layaway options for customers and 2009, Asian card transactions grew 158 percent, approaching and encourage credit purchases. Should retailers encourage one-fourth of the global transaction volume. Asian governments customers to rely heavily on credit? (AACSB: Communication; are encouraging this growth because it stimulates the economy

Reflective Thinking)

and brings in more tax revenue. Retailers embrace it because con- sumers spend more when using cards as compared to cash. This trend is not without critics, however, given the historical aversion to debt exhibited by Asians.

MARKETING & THE Economy

Walmart

ends of their budgets, they are not ready to increase spending, In tough economic times, low-price leaders generally do well. They

even when something enticing goes on sale. Second, better-off keep existing customers and gain new ones who are trading

customers who traded down to Walmart are now feeling more re- down. That was the case for Walmart throughout most of the re-

laxed about spending. But rather than spending at Walmart, those cent economic downturn. But more recently, Walmart has seen a

customers are returning to other stores they frequented prior to changing dynamic. By late 2010, traffic and same-store sales at

the economic downturn. With a bleak forecast for job growth, U.S. stores had been declining for a year. This is puzzling, espe-

Walmart’s revenue trend is not expected to change anytime soon. cially given that the retailer had been aggressively discounting its

1. Are there any other options for Walmart other than waiting already low prices during that period. There are two possible rea-

out the recovering economy?

sons for Walmart’s declining numbers. First, Walmart’s core shop-

2. What needs to change in the external environment before pers have lower average incomes than typical Target shoppers and

Walmart sees stronger growth?

have felt little relief from the economic recovery. Already at the