Competing in the Age of Wal-Mart: A Boutique Business Case Study
This case is intended for use in undergraduate marketing, management, fashion merchandising, entrepreneurship, or retailing courses. The purpose of the case is to demonstrate how small boutique businesses can compete against large discounters and chains. Particularly, the concepts of key client management and customer delight are highlighted. Students are encouraged to evaluate the company's strategy, tactics and uncover areas of potential customer delight. Additionally, students should attempt to provide thoughts on other strategic and tactical activities the business should pursue considering the recent economic downturn. The case is designed for a one-hour class and should require two hours of outside preparation.
The Thomas Shop is a women's clothing boutique located in Effingham, Illinois. The business was started in 1936 and has since been handed down through the family with the second and third generations currently handling operations. Originally, the business offered approximately 2000 square feet of space, but was doubled in size in the early 1990's to accommodate shoes and other accessories. The store moved to its current location (owned by the business owners) with 4000 square feet of retail space located in the downtown shopping district of Effingham. The town's population is approximately 20,000 and is the main shopping district for the surrounding county of approximately 35,000 residents, and further, draws customers within a fifty-mile radius. The nearest major city, St. Louis, Missouri is 100 miles to the west.
The demographic breakdown of Effingham County (Table 1) shows that it is predominantly white, (98.7%) and has a fairly equal split between males and females. Additionally, the vast majority of residents have at least a high school education, (87.7%) and approximately 20% have at least a bachelor's degree. Finally, the income statistics reveal that while over 27% of families earn less than $35,000, 45% make more than $50,000 annually.
The store carries a full selection of merchandise for women from teens to seniors (approximately 75% of the female population). Product lines include slacks, blouses, jeans, dresses, lingerie, costume jewelry, hand bags, hats, jackets, and shoes (Table 2 gives a sales breakdown by line). The focus has always been to provide mid to upper level merchandise for the style conscious woman. In the words of Yves Saint Laurent, "Fashion fades, style is eternal." The style conscious woman wants to make her own unique style and looks for clothiers who can help her accomplish this page 36 Allied Academies International Conference New Orleans, 2009 Proceedings of the International Academy for Case Studies, Volume 16, Number 1 task. Therefore, The Thomas Shop provides brands and services to assist women in reaching this goal (Table 3 shows major brands by line).
Staff includes the owner, (Kathy) who is also involved in the day-to-day operations, (including sales, displays, cleaning etc…) her daughter, (Stacia) and one part-time sales clerk, (Vickie). In addition to her daily duties at the store Kathy also does the daily bookkeeping, seasonal merchandise buying, payroll and taxes. She is assisted in the daily activities and merchandise buying by Stacia. Kathy has been involved in the business for nearly forty years, while Stacia has been with the store for approximately 15 years. When asked to describe a typical day Kathy responded that the reason she liked retailing so much was that there is no such thing as a typical day. She went on to explain that when customers are in the store her only concern is servicing their various needs. Slow times are opportunities to re-do window displays, (usually done once a week) change in-store displays, and take care of general maintenance.
Allied Academies International Academy for Case Studies International Spring Conference (IACS)
New Orleans, LA
Thomas, Michael L., Linda G. Mullen, Michael P. McDonald.
"Competing in the Age of Wal-Mart: A Boutique Business Case Study."
Marketing Faculty Presentations.