A strategic merchandise mix for Malaysian department stores

Abstract

"Malaysian department stores under-performed', preliminary desk research says. "Department stores need to monitor the consumers and use merchandising as a competitive tool", practitioners and academicians advise. Within this parameter, the thesis examined the relationship between consumers, department stores and retail merchandising. First, the author explored the impact of the changing market on this `universal provider' and underlined how the latter had coped (successfully/unsuccessfully) with these changes through its merchandising activities. Second, she investigated on the multifaceted dimensions of retail merchandising and established a framework for strategic merchandise decisions. Third, she tested this framework in the Malaysian market. Given that the key to effective merchandising depends heavily on defining and understanding the target clients, to test the above construct, a consumer survey was undertaken. Likewise, since fashionable items made up the bulk of department stores' merchandise, the research instrument was constructed towards uncovering the shoppers' attitudes towards fashion. The gathered responses were then subjected to factor and cluster analysis. The former technique was used to identify the fashion lifestyle orientations. On the other hand, the latter method was used to classify the `cases'. Through these techniques, five fashion lifestyles orientation were uncovered and seven types of customers with fashion lifestyle orientations ranging from as few as two to as many as five factors were underlined. Further analysis established that local department stores should concentrate on three clusters, which made up 77 per cent of the total market. A broad overview shows that although they are department store shoppers, they shopped in other store types as well and engaged in extensive cross shopping. Moreover, when making purchases, their main trade-off was `quality' and `price'. Although they generally did not seek the cheapest price, there were on several occasions that quality was compromised for a `better' price. This behaviour was mostly evidenced in the cluster that made up of many Chinese. Another significant discovery was, wide assortment, an attribute most notable in department store retailing, was not distinctively important to these target markets. At the end of the investigation, a strategic merchandise mix - set of merchandise that meet the needs and expectations of these three clusters, was offered. It is only through this attainment (a strategic merchandise mix) that local department stores can realise their true potential.