How the Retail Environment is Changing

Social values, the economy and technology were the three vehicles for change that caused the most disruption in the retail environment. Nike once had a bad reputation because they were accused of poor, sweatshop factory conditions in third world nations. However, they are now making substantial efforts to treat their employees well by offering them a variety of benefits as highlighted in their “Competitive Rewards” section of their sustainable business report. Nike workers are compensated with a fair salary based on their skillset, medical insurance, and paid time off, just to name a few perks. Also, it is not just Nike workers, but employees in their contracted factories are receiving incentives as well as they are testing out new compensation models and systems. They want them to experience a positive work environment and culture, and with the implementation of this system 22% of workers felt they were valued more (Nike, 2016). Since Nike has changed their moral standards, their sales have increased.

The reasoning for the change in the retail environment due to the economy and technology overlap. As of January 2018, the Consumer Confidence Index is 125.4, which is very optimistic for the retail environment (Conference-Board, 2018). This shows that consumers are willing to spend, however they are driving traffic online. The economy has impacted the retail environment because since the recession, people are cautious about how they spend their money. They are delaying their purchases in anticipation for the holiday season when they know prices will be slashed. Consumers want to find the lowest price possible for a product and with technology, they can easily find the product they want through multiple online sellers to compare prices. Also, based on a survey by the National Retail Federation, during Black Friday 2017, 59% of shoppers had planned to shop online, as opposed to brick-and-mortar stores such as Walmart and Target (Wattles, 2017). This made it the first time that more consumers were going to shop online, rather than in-store. As a result, cyber Monday 2017 sales were up 16.8%, making it the largest US online shopping day in history (Baird, 2017). Some retailers have noticed this, such as Best Buy which is why they are offering to price match in-stores. Consumers are driving traffic in-store, while still ensuring they are receiving the lowest price. Overall, consumers’ social values, the economy and technology have impacted the retail environment.

Baird, N. 2017. Black friday weekend and cyber week: Roundup of results. Forbes. https://www.forbes.com/sites/nikkibaird/2017/11/30/black-friday-weekend-cyber-week-round-up-of-results/#4b74550e7e7b

Conference-Board. 2018. Consumer measures.

https://www.conference-board.org/data/consumerdata.cfm

Nike. 2016. Top things to know about sustainable innovation at nike. https://news.nike.com/news/sustainable-innovation

Wattles, J. 2017. Online sales boomed on black friday. CNN.

http://money.cnn.com/2017/11/25/news/black-friday-holiday-shopping-foot-traffic/index.html