AWA – Argument #2
On average, middle-aged consumers devote 39 percent of their retail expenditure to department store products and services, while for younger consumers the average is only 25 percent. Since the number of middle-aged people will increase dramatically within the next decade, department stores can expect retail sales to increase significantly during that period. Furthermore, to take advantage of the trend, these stores should begin to replace some of those products intended to attract the younger consumer with products intended to attract the middle-aged consumer.
The argument that replacing the inventory catering the young consumers with that catering to middle aged consumers just because the latter’s percentage spending is more is not entirely based on logical facts. There are many holes in the arguments that need filling to support this conclusion.
Firstly, nothing is mentioned about the absolute number of young people with respect to middle-aged and how will that change in the next decade. Currently, it is possible that the total number of younger consumers far outnumber the middle-aged consumers. The percentage figure may not give the right picture. If such is the case, then it is wrong on the part of department stores to think that most of their products and service are bought and utilized by the middle-aged group. Also, no mention is mentioned about what would be the relative growth of these groups. If the younger age group is going to increase faster, say because of baby boom, then the forecasts made by the department stores would need correction.
Secondly, the fact that trends in shopping change with time as well as innovation in products has not been taken into consideration. What is true today may not be so tomorrow. Moreover, like the department stores, other stores may at be focusing their energy as well to attract more middle-aged customers. If this effort is successful, then the department stores could see a decline in the middle-aged expenditure levels at their stores. We know, for instance, that in today’s world, people are more attracted to specialized stores for their purchases than towards a have-all department store. They expect to get better range of products as well as expect better service and assistance. For eg, Wal-Mart sales have fallen within the last quarter because people are moving on to more focused stores like Best Buy etc. for their purchases.
The most important fact that is neglected in this argument is that replacing products may result in department stores losing the younger consumers all together and if the trends with the middle-aged group changes then the stores will be left with inventory that they may have to liquidate or sell at very low price to make place for new inventory. It can be too risky for the department stores to specifically cater to one portion of the demography and neglect the other half completely. Essentially, they would be placing all their eggs into one basket which is not a clever strategy. The argument should provide evidence through statistics/surveys to enforce the fact the middle-aged consumers will continue to shop at the department stores and that their percentage is liable to increase.
This, the argument is not entirely convincing. To strengthen it further, the argument should all talk about the net quantity involved and should not just talk in percentages. Also, the argument should present analysis of the trends in marketing to make a calculated discussion. They should talk about their competitor’s strategy to fine tune their own decision.
