Declining foot traffic and slumping profit margins are forcing several brick-and-mortar retailers to shift into survival mode. Consumers are doing more of their shopping online, lured by the convenience and great deals offered by Amazon and other competitors. As a result, the stores are tweaking their strategies, hoping to rake in big sales in the process. For one, Wal-Mart has been forking over cash to increase sales online, buying discounter Jet.com and building out its distribution system. It's also invested in remodeling hundreds of stores, reducing inventories, and pushing down prices. Target will forego $1 billion in profits by lowering prices and pushing digital sales with lower margins. It will also spend billions to renovate roughly 600 stores and open 100 smaller ones over the next few years. As part of its ongoing effort to get smaller to combat losses, Sears will be closing another 100 Sears and Kmart stores in 2017. Having already sold off its Craftsman tools b...

In a recent post, I discussed how Macy's holiday sales fell well below expectations, prompting it to close 68 stores nationwide. The Limited, a once-popular women's clothing brand that offers workwear and casual attire, has met an even darker fate: It shuttered all of its stores around the country. Only its website will remain up and running, and it will continue to ship nationwide. Despite owning such popular companies as Victoria's Secret and Abercrombie & Fitch, the brand fell on hard times in the mid-2000s. Sun Capital Partners, a private firm, took over its management in 2007. Still, like Macy's and other brick-and-mortar retailers, The Limited has had a hard time fending off e-commerce giants like Amazon, not to mention fast fashion stores like Forever 21 and H&M. The news comes as a shock to many people who have been shopping at The Limited for a long time, including my sister and wife. In my view, The Limited and Macy's chief problem bo...

Who would have thought that Macy's would be in such a slump? The department store's shares dropped over 9 percent following the market's close Wednesday after it posted disappointing holiday sales and released the locations of 68 stores it plans to close nationwide as it aims to turn its fortunes around. Macy's comparable sales tumbled over 2 percent in November and December; it expects full-year diluted earnings to be in a range of $2.95 to $3.10 -- considerably lower than the $3.15 to $3.40 it was hoping for. In an effort to cut costs and streamline operations, Macy's said it will eliminate layers of management and will work to reduce other non-payroll costs. As a result of these steps, the company expects its work force will shrink by 6,200. Plus, some 3,900 workers will be displaced by the store closures and some of these employees may be reassigned. The store closures reflect an attempt to reverse slumping sales at its established shops, with the de...

On Thursday, Los Angeles prosecutors sued four national retailers for deceiving shoppers into believing they got bigger discounts than they actually did. The separate lawsuits alleging deceptive advertising were filed against Sears, Macy's, Kohl's, and J.C. Penney. The retailers falsely advertised higher regular prices for merchandise so customers, leading customers to think they were getting bigger bargains. California law bars retailers from promoting a higher original price unless the product was sold at that very price within three months of the ad. The lawsuits seek civil penalties up to $2,500 for each violation and injunctions to cease false reference pricing to bolster sales. As it turns out, thousands of "sale" items were advertised at false reference prices. One of the lawsuits asserted that J.C. Penney was selling a maternity bathing suit top online for $31.99 earlier in the year, down from the original price of $46. The top was later marked dow...

Just when you thought most major retailers planned to close up shop on Thanksgiving, Macy's said "not so fast." Not only does the department store plan to open on turkey day, it is looking to do so an hour earlier. Several stores have prioritized their employees' desire to spend time with their families on Thanksgiving over making a quick buck, including IKEA, Crate and Barrel, Dillard's, Home Depot, Lowe's, Marshall's, Sam's Club, and Publix. Unfortunately, Macy's has yet to jump on the bandwagon, doing anything it can to reverse six consecutive quarters of revenue declines. While some consumers are sure to rejoice at the prospect of snagging big bargains on Thanksgiving Day, others fret at the company's seeming indifference toward affording employees the opportunity to spend more time with loved ones. What companies don't recognize is that forcing these people to work through the holiday results in low morale and, in many cases, a...

Guess what's in style again? That's right -- shopping. CNN Money reports that retail sales rose 1.3% in April compared to the prior month -- the largest monthly gain in over a year and a promising sign that the U.S. economy is improving after a disappointing first quarter. But people aren't opening their wallets and swiping their credit cards for everything. Right now, beauty products, sporting goods, cars, and eating out at restaurants is the rage. Clothes and electronics, on the other hand, aren't as popular this spring. Investors fear that buyers just aren't excited about new clothing and accessories. Consumers also have a clear preference for shopping online, as evidenced by Amazon, whose stock hit a record high this week above $700 a share. Traditional big box stores like Macy's, whose stock tumbled 18% this week, are in dire straits. Some economists say that people shouldn't read into the bump in sales too much. They say the gains in April sa...

Have you been yearning to buy a new Mercedes for years?  Maybe you’ve thought about stopping by your local Macy’s store on the way home from work and snagging that posh Michael Kors watch you spotted there last month.  Or, you’ve contemplated replacing a dingy pair of sneakers ensconced in your closet with a new set of Sketchers you instantly became smitten with after seeing them in a newspaper ad.  According to psychologists, this zeal to acquire products is only ephemeral, as consumers derive more pleasure from desiring them than they do from actually owning them. Human beings are known to long for the unobtainable – whether it’s an old flame who got away after high school or a snazzy smartphone that’s a bit out of our price range. Once the object is ours, that seemingly unshakable sense of yearning and excitement that we felt earlier dissipates, and it does not resurface until we set our sights on a new object of desire. If you think about it, this makes complete sen...

How many times have you gone into a store and seen signs that say something along these lines: "Supplies running fast!" "Buy them before they're gone!" "Only 5 left!" "Sale ends soon!" Now, be honest: How many times did you go through with the purchase because you believed what the signage said to be true? Yep, even I've fallen for it myself, and I actually majored in marketing and minored in psychology! In marketing and consumer psychology, it's what we call the scarcity principle : Consumers attach more value to things that are few in quantity and thus feel more compelled to purchase such items. But this isn't limited to brick-and-mortar stores -- companies also use this marketing tactic online. Take Amazon.com. At some point, you're bound to come across an item whose description includes "Only 3 left in stock. Order soon." Companies seldom run out of inventory, unless we're talking about much...