Pier 1 Imports
This paper will explain Pier 1 Imports’ merchandise systems, strategic merchandising planning and control, map of product change, and its development. Pier 1 has always proved to be important for those who would buy the home décor. This is because the business venture operates by selling more than 6000 products that are imported from over 50 countries through the more than 1070 Pier 1 imports stores, which are found across North America. The stores provide a greater field of selection for both outdoor and indoor lamps, all kinds of furniture and other accessories that serve a purpose in decoration. Pier 1 also provides an avenue for its shoppers to order and reserve items online and later pick them up from its units. Moreover, the company is Grupo Sanborn stores’ main merchandise supplier; an amount of the retailing places are estimated to be more than 50. The Pier 1 Import company based in Texas has its operation in about 990 stores situated in the US plus another 80 locations found across Canada. The company is responsible for supplying merchandise, as well as licensing its name to the in-store sections at the 47 Seas stores found across Mexico and one that is situated in El Salvador. The company’s sales and marketing strategy through advertisement have over time increased from $76.1 million in 2014 to 62.4 million in 2012 (Vault 2016); thus, it directly indicates the firm’s efforts to realize maximum profits.
Although the company had faced a prolonged stretch that was characterized by a decline in the sales and low profitability, the firm has embarked on a growth mode, as well. The sales grew by a record 4% in 2014 making the Pier 1’s revenue close to $1.77 billion a figure that had never been witnessed for the last eight years (Vault, 2016). With the fact that the net income dropped by 17% through the years to $107.5 million, the retailers were able to log their fifth consecutive year firmly (Vault, 2016). The sales per square foot, a metric which is essential for Pier 1, through stressing the urge for quality rather than quantity in the retail operations, shot to $202 in the financial year 2014 as compared to $198 in the previous year. The flow of cash from the operations of the company realized an increase from %35.2 million in fiscal 2014 as compared to 2013’s $159.2million (Vault, 2016).
This continued improvement in the Pier 1’s financial outcomes can be attributed to the downsizing of the company’s store, as well as its distribution networks. Moving towards the future, the retailer in the fiscal year of 2012, laid down a three-year plan purposed at spearheading the realization of maximum sales and profitability (Vault, 2016). Though short-lived, the strategy has served a long way in ensuring the achievement of its goal through boosting the sales per retail square foot upwards from $184 in 2012 to $200 (Vault, 2016). With a great investment of $200 made in 2014, which helped finance the installation of air conditioning and lighting equipment, Pier 1 Imports upgraded its stores and helped to smoothen its operations (“Indeed”, 2017). The brick-and-mortar expansion plans by the Pier’s 1 will have an exceeding impact due to adding 50 outlets to the store count. The companies major plan is to develop a website in efforts of ensuring that the customers receive maximum service as they will be able to pay the merchandise online and have it delivered to them (Johansson, 2008).
The proper item placement in the market goes a long way in determining the likelihood of if the product attracting customers or not (Rosenberg, 1984). It is the essential factor in a product’s success or failure. Recent developments, however, have witnessed a battle between the manufacturer brands and those from private entities. One of the positive characteristics of private branded merchandises is that they are always preferred by consumers since they are less expensive. The products are cheaper due to reduced advertising expenditures. Furthermore, private labeling gives more control over pricing, marketing, sales, and distribution; thus, making it difficult for the competitors to match and price check similar products. Private branded merchandisers create their own unique image, which begets a marketing identity and acclaims stronger customer recognition and loyalty. Store brands would be more profitable than national brands, as well, solely because private branded merchandise are cheaper to be conducted.
However, private branded merchandises have experienced laud failures over the years. Customers sometimes perceive private labeled products to be lesser quality than the ones from established brand name retailers (Milgrom, 1986). Trader Joe’s and Kirkland Signature are among the top five private brand retailers in the United States. Kirkland Signature was introduced in 2015 by a national brand Costco. They deal with items including organic milk, organic coconut water, organic liquid eggs and light beer. Clearly, they target the entire population of the United States who aim at living healthy. Their sale of such organic products got to USD 3.9 Billion during the Y2015. Furthermore, Trader Joe’s has launched an array of products which includes Cold pressed Watermelon juice, Turkish Fig Bites, Super Seed among others. These are new and innovative products. Trader Joe’s has opened several new stores to broaden its reach in the country. They target the entire population from little children to the elderly individuals, as well. Evidently, Kirkland and Trader Joe’s both target the same segment of customers. The difference existing between the two is that Kirkland is a private brand named and founded by a national company, Costco while Traders Joe’s was not founded by a national brand.
Technology plays a great role in merchandise development; one of its positive effects is efficiency in operations since time involved to perform particular tasks is reduced. Communication within the retailer and with their customers has become faster due to technology. Pier 1’s replenishment system helps them to pin down the quantity of merchandise needed to keep all stores at their optimal stock levels. Therefore, it improves stock accuracy, which, in turn, yields higher sales. Customer and vendor relationship is well protected because the vendors represent the business, and they have direct links to the customers. Technology can be used to track inventory or restock shelves, which helps in merchandise distribution. Finally, as Rosenberg and Czepiel (1984) argue that state of the art technology has also enabled brands to forecast demands, create efficient transportation routes, predict inventory levels, and most importantly, manage positive customer relations. Therefore, investing in technological development is crucial for the success of any firm, and in this case, Pier 1 Imports.
References
Ba, S., & Johansson, W. C. (2008). An exploratory study of the impact of e‐service process on online customer satisfaction. Production and Operations Management, 17(1), 107-119.
Indeed, (2017). About Job1USA. Retrieved from https://www.indeed.com/cmp/Job1usa
Milgrom, P., & Roberts, J. (1986). Price and advertising signals of product quality. Journal of political economy, 94(4), 796-821.
Rosenberg, L. J., & Czepiel, J. A. (1984). A marketing approach for customer retention. Journal of consumer marketing, 1(2), 45-51.
Vault, (2016). About PIER 1 Imports, Inc. Retrieved from http://www.vault.com/company-profiles/retail/pier-1-imports,-inc/company-overview.aspx
