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Managing in Troubled Times Case Study

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Case Title:

Managing Downturn: Kmart and Other Retailers Innovate their Operating Model with Click and Pickup Services

Publication Year : 2009

Authors: Vandana Jayakumar, Vara Vasanthi

Industry: Retailing

Region:US

Case Code: TRT0090

Teaching Note: Available

Structured Assignment: Available

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Abstract:
This case study analyses the operating model innovation amidst recession – click and pickup service – of Kmart and other retailers in the US. The retail industry in the US was severely affected as an aftermath of the US Financial Crisis of 2008, with a marked declination in consumer spending thereby triggering the decline in the revenues of retailers. As a result, the retail industry witnessed closure of many stores, unprecedented job losses and folding of some of the erstwhile popular retail stores. Amidst all the commotion in the retail industry, Kmart has attempted innovation in its operating model. Popularly known as the click and pickup service, Kmart is experimenting within this service. Notably, the click and pickup service is one of the many multi-channel retailing methods and is being used by some of the retailers in varying forms. Given the magnanimity of the financial crisis, is it a good strategy to tackle the times of crises by altering the operating model? With many retailers closing down stores, who will survive in the end – those with more stores or those with fewer stores?

Pedagogical Objectives:

  • To understand and analyse the extent of losses suffered by major US retailers
  • To understand the newly adopted operating model of retailers – the click and pickup service – and analyse the pros and cons of this approach both in the short and the long run
  • To explore and debate on all the other possible options available for the retailers to maintain the existing level of business activity.

Keywords : Managing Downturn, US Financial Crisis, US Retail Industry, Operating Model Innovation, Multi-channel Retailing, Online Retailing, Kmart, Wal-Mart, Click and Pickup Service, In-store pickup service, Site-to-store service, Internet Retailing, Recession, Store Closures, Bankruptcy

Contents:

  • Economic Crisis and Retail Sales
  • Multi-channel Retailing
  • Click and Pickup Services: The New Operating Model?

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