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Systems Map (HBC) Positive & Negative Effects to Recovery Post…
Systems Map (HBC) Positive & Negative Effects to Recovery Post-Pandemic
Demographic
Target Customer
Men and Women (slightly more focused on women)
Household income of $75K+
Single/married
Age usually between 35-55 years
College/university graduates
Usually living in urban cities
Baby Boomers
27% use digital technologies at stores
33% relate to buying clothing from department stores
Only 35% expect delivery within 24 hours
Gen Z
Almost 42% consumers are more receptive towards using digital technologies available in stores like automated checkout, self-guided experiences
Only 20% relate to buying clothing from department stores
68% expect delivery of purchases within 24 hours
Regulatory
COVID-19 Shutdowns
Masks are mandatory province wide
currently in step 2/4 of easing restrictions (Government of Alberta, 2021)
Must limit customer capacity to 25% of the fire code occupancy (Government of Alberta, 2021)
increased cleaning measures
limited store hours (vary by location)
supply chain issues, longer lead times, and product backup
altered store layout, due to social distancing measures
UCP Provincial Gov.
LPC Federal Gov.
upcoming elections in 2023
rent payment disputes (Financial Post, 2021)
or is HBC financially unstable? (Financial Post, 2021)
increased mall closures
fighting to get a fair deal on rent during the downturn
Economic
Slowed economy causing multiple stores closing
Workers/Employee
“Due to these circumstances beyond our control, the company has had to make adjustments
which have resulted in a reduction in workforce.” (The Canadian Press 2021)
600 (5% of employees) employees laid off
Reduced hours and wages of staff
Reduced incomes affecting frequency/volume of purchases
HBC plans to stay open for another 350 years despite the economic crisis(Hudson’s Bay Company, 2020)
Retail economy expected to recover by 2023 (Conerly, B, 2020)
Suppliers/Supplies
Reduced supplies
Suppliers behind on schedule due to reduced work/employees
Competitive
Most progressive Brands
Lululemon
3rd quarter sales of US $1.1 Billion showing increase of 22% as compared to previous year
Creating interactive environment by purchasing mirrors worth US $500 million
Double men's business
Double digital sales
Quadruple international sales
Holt Renfrew
Significant increase of 10 levels as compared to what Hudson Bay is today
Urban Outfitters
More focus towards athleisure and lounge wear
Companies with significant growth that focused more towards online market
Companies like Staples, Grocers, Voila by Sobeys
Nordstrom
Turning stores into fulfillment centres
connecting digital and physical experiences like curbside pickup and returns
Close 16 full-line stores to reduce non-occupancy related overhead expense
TJX
Revenue almost 7 times as compared to HBC
HBC
Tremendous liquidity and assets, strong balance sheet
Brands that led to bankruptcy
U.S.
Neiman Marcus Group Inc.
J.C. Penny Co. Inc.
Canada
3 Popular and established Brands
Aldo Group Inc. Le Chateau Inc. Reitmans
Le Chateau shutting down 123 stores
160K to 225K store shutdowns
Technological
Reduce Costs
Automate inventory control (Government of Canada 2021)
Inventory
Keep track of inventory
Reduce inventory costs
Delivery and resupply speed
Improve forecasting abilities
Increase website views
Customer Service (Marr, B 2019)
Improved customer support
Track purchase history
Improve customer satisfaction
Purchase suggestions
Recording calls to improve future experience and for training purposes
View customer interaction with website
4 P's justin
Price
Reasonably priced and competitive
Well respected brand so HBC can fetch a slight premium over competitive brands
Place
Online
Consumers trends leading to more online shopping
Close store liquidate assets and focus on online department
Curbside pickup
In-Store
Covid-19 Capacity restrictions
Retail store closures mean there is less competition within the market HBC has to compete with
Needs to be very fluent and desirable. How will HBC's offerings attract consumers to come back?
Quick and convenient, no shipping wait time and you can try items on right in store
Product
Offers a wide range of quality products (one stop shop)
Wide variety of designer products
HBC is well-established and iconic Canadian company with roots dating back to 1670.
comfort wear, technology, home office supplies, and home improvement did well during pandemic
Excess inventory because of pandemic
Warranties / easier than returning a product through mail
Promotion
Communication should be focused on experience rather than product features.
Direct Marketing
Advertising
Discounts
Payment terms
Personal Selling
More difficult now that 600 workers have been permanently laid off across Canada
Public Relations
Socio-cultural
paranoia surrounding COVID-19
limited in-store traffic
curbside pickup opportunities
increased online shopping
"one stop shops" favourited
outdoor shopping opportunities
societal changes
support local movements
tipping point in fast fashion (Bhattarai, 2019).
Greater brand loyalty (Levi's, Nike, Adidas, Lululemon, Champion, etc.)
Carhartt transformed from workwear to a fashion staple (Skid, 2020)
importance of sustainability and ethically sourced products
turn towards used and vintage clothing.
technology involvement in shopping
robotics to limit touching of products (Ho, 2020)
by the end of 2025, 580,000 robots will be deployed in warehouses to help fill orders (as cited in Marr, 2019)
self check out
cashless transactions
online rewards programs
Extended Reality where the customer can browse products and virtually try them on (Marr, 2019)
Facial Recognition in-store and online (Marr, 2019)
increased leisure time
opportunity to learn new skills
more cooking/baking from home
Rising DIY projects (DOZR Hub, 2020)
home improvement
yard work
garden and landscaping
sense of accomplishment