Category killers retail

Off price retailers

Bed, Bath, and Beyond would be considered a category killer in home interior needs. Eliminating diapers from a grocery's offerings would make their baby sections unappealing to parents with young children—an attractive clientele. One strategic option is to maintain the status quo with the assumption that the customer base will not move online. Zappos who was bought by Amazon just a few years ago redefined shoe shopping online. For example, TigerDirect has been the leader in electronic sales and parts for its category for quite some time. However, the current recession created many challenges for retailers: overall consumer spending has declined or held flat, and return on invested capital ROIC has suffered dramatically. Space Rentals. Clearly, bricks-and-mortar store productivity declines will likely accelerate over the coming decade; just this week, Gap Inc. These startups are built on a different business model as compared to the earlier category killers, which mainly competed on price. Toys R Us, which pioneered the concept and filed for bankruptcy in September , is an example. In some cases, a retailer may need to concurrently adopt more than one of the following options to respond to these challenges: Do Nothing. Interestingly, these services subsidize the declining productivity of key item and category sales in the store. If it continued to sell them unprofitably, how would it make the math work? As a result, retailers will need to reconfigure as vast spaces become unproductive.

By Matthew Hudson Updated January 31, The phrase "category killer" has been used a lot in retail and has two basic meanings.

Where could it find the items or services to subsidize this important part of its offer? Clearly, bricks-and-mortar store productivity declines will likely accelerate over the coming decade; just this week, Gap Inc. While retailers may think the solution lies simply in forecasting accurately when certain product categories will shift to the web, we believe this is the wrong question to pose.

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Updated May 10, What is a Category Killer? To compete with online competitors, retailers will need to be agile both in eliminating or downsizing categories that do not benefit from their stores' assets, and in introducing new categories that cannot be bought without the help of the core assets of their stores.

For example, TigerDirect has been the leader in electronic sales and parts for its category for quite some time.

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Space Rentals. This has left big-box stores in a very precarious situation. The offerings at these store went beyond products and incorporated experiences, complete with entertainment and fancy promotions and demonstrations of latest technology.

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The final question that all retailers must contend with is whether these trends are material to their business. While many players have entered the tablet market over the years, few have any sustained presence.

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Category Killers