Management Issues in WOW Sight & Sound Retailing Company

1.      Introduction and Problem Identification

The purpose of this report is to identify management strategies used by WOW Sight & Sound, and address issues associated with them as they may be critical in the company’s future success. WOW, Sight and Sound was started in 2003, with its first shop situated in Queensland. The shop dealt with office equipment, home entertainment systems, cameras, games and CDs, DVDs, car audio systems, telecommunications, among other electronics. With time, WOW expanded to a company and opened 15 stores across Australia. It was an indication of active management, growth, success and profitability despite the existence of massive competition from Dick Smith, JB Hi-Fi and Harvey Norman. The firm had established numerous shops in different parts of the country, hence attracting a vast customer base. Its uniqueness enabled it to withstand stiff competition from rival firms operating in the area. However, the success of the company was short-lived as severe financial issues started arising from 2011 due to declining sales and profitability. The problem was more critical in the following year, forcing the management to announce the existence of financial strives.

Management strategies are very critical towards the success of a business. With the ever-changing business environment, companies are required to pay careful attention to issues associated with technology, globalization and economic turmoil (Ghahnavieh, 2018). These are issues that have a significant influence on the existence of a business. With the growth of online retailing platforms, shopping behaviors have changed with many consumers shifting from physical shopping to online retailing (Piotrowicz & Cuthbertson, 2014). Furthermore, the offering of substantial discounts for online consumers does have a significant adverse effect on stores with physical shopping as their primary shopping mode. It is seen that the company faces challenges in its management function of organizing its operations and activities. In our case study, WOW Sight and Sound concentrated on trade through physical stores and how the organization of the business runs. The company had 15 physical stores and only one online store, which was launched in 2008. However, WOW failed to tap online consumers despite running online retail for more than four years, and this could be the main reason for the decline in sales and profitability. The aftermath was the closure of the stores in 2012, and take-over of the WOW website by G &M Direct 2 U Pry Ltd. The analysis primarily focuses on the limitation of functions of organizing in the company that gets navigated through the events happening in the company. Also, the reasons why it is challenging to perform the arrangement of the business systematically and in an orderly approach that may help regain success and sales.

Discussion

2.1 Physical Retailing

Shopping in brick and mortar stores dominated the retailing industry before technology and digitalization emerged. It was a type of shopping that utilized stores in fixed locations and retailing from a building or property (Eliasson Sternås & Kamne, 2018). Despite the changes in retailing, shopping in physical stores still exist. These shops are known to provide a variety of benefits to consumers among them, diverse inventory, minimal overhead, and low prices. Besides, brick and mortar stores allow consumers to analyze a product efficiently and fast due to the direct involvement of senses. The firm also offers a wide variety of products, hence allowing customers to choose from a broad list. It is easier for the consumer to perform safer payments, immediate gratification, get a direct personal experience with the product, and no waiting for shipping in physical store shopping (Eliasson Sternås & Kamne, 2018). Although brick and mortar require a higher operating cost, it is a retailing channel with minimal risks.

Concerning WOW Sight and Sound Company, the firm started with a single physical store in Queensland. The channel of retailing favored the business and it was able to expand and open ten other stores in Queensland, one in Victoria, one in the ACT and Northern Territory, and two in New South Wales. Presence of physical stores allowed the company to establish a personal connection with its customers, therefore building loyalty. It is a crucial factor when it comes to management functions of organizing since it provides a compelling performance. Doing business from fixed locations in 15 of its stores allowed customers to check the quality of goods instantly personally. The company faces difficulties in blending the multiple personalities to a cohesive and unified team, which limits the function of organizing in this case. Based on the analysis, the factor limits the functions of organizing as an element of management roles. On the other hand, when a customer is doing shopping from a store, it is possible to check the quality of a product. Personal touch and understanding are also built as consumers frequently visit the shop to make purchases (Rigby, 2011). Besides, there are no delays due to waiting for shipping. However, physical stores are known to concentrate in a few lines of products. They provide customers with a limited number of choices. For WOW Sight and Sound, the company had stores dealing in electronics and music systems. It is the reason such company experience serious setbacks whenever their line of operation is affected (Zhu, Goraya, & Cai, Y 2018). When financial strife hit the electronic sector, WOW and its close competitors were adversely affected. In this case, the companies had poor communication and effective feedback that led to the occurrence of poor performances and the occurrence of the events in the business. It is therefore difficult for the functions of organizing to operate in the business effectively and be fruitful.

Currently, brick and mortar stores may not be the preference of many in retailing. However, this form of traditional retailing still retains dominance in some sectors. Integrating online and offline retailing allows a business to thrive despite changes in consumer behavior. Companies that use multichannel can survive even when there is a shift between online and offline retailing. The current strategy of omnichannel retailing seems like the appropriate solution to retailing as it allows smooth integration between physical and online stores (Piotrowicz & Cuthbertson, 2014). In omnichannel, customers can freely move between online and physical stores using a single transaction process. Furthermore, consumers are provided with seamless and unified experiences despite the channel used. No time will physical stores be eliminated from retailing, and they are expected to continue existing as a competitive weapon (Rigby, 2011). With retailing companies organizing themselves around omnichannel strategy, it will help them continue attracting customers; therefore, maintain their sales and profitability. Hence a challenge for the WOW business to operate effectively which hinders the function of organizing as a management element in the company.

2.2 Online Retailing

The internet and mobile devices have emerged as the most preferred retailing channel for consumers in the world today. Online platforms are currently recognized as powerful tools with the potential to transform the shopping experience for consumers. According to Nguyen, de Leeuw, and Dullaert (2016), more than 46% of shoppers in Europe bought products via the internet in 2016. Similarly, the European online business-to-consumer’s sales increased by 14% in the same year (Nguyen et al., 2016). The internet is capable of providing information to consumers concerning a product just by a click of a button. Moreover, customers are provided with two-way communication and collect market research data. Retailers, on the other hand, benefit when they use online platforms to sell their goods and services. The set shows an organizing form of the business which is relevant for the management of the business. Amongst the benefits include broadening the target market, improving cost efficiency, enhancing communication with customers, extending product lines (Nguyen et al., 2016). Besides retailers get to deliver customized offers as well as improve the relationship with customers. In this case, the WOW faces the challenge of achieving an effective function of organizing in management of the business. Online retailing becomes more effective if a product being sold is accompanied by some enticing after-sale services such as free shipping, which marks great importance in organizing sector of the business.

The take-over of WOW website by G & M Direct 2 U Pry Ltd indicated new dawn of the company. 2012 was the year online retailing experienced the highest shopping sales and is the same year WOW closed the bricks and mortar stores. Online shopping does not require people to travel and therefore perform shopping at the comfort of their homes or offices. Also, order fulfilment provides channels used in online shopping with a positive reputation, thus impacting positively on consumer behaviour (Nguyen et al., 2016). With the growth and expansion experienced in online shopping for the last ten years, the market is already saturated. A new entrant is, therefore required to utilize a unique strategy that will attract consumers. For the case of WOW, the new management decided to adopt a loss-leader marketing strategy to rebuild the customer base quickly. The company also rebranded in environmental areas of technology and economics to adapt to external changes. The unclear direction of the company in the business marks a great interest for analysis as limit the function of organizing activity in the business.

2.      Conclusion

Failure to adapt to changes in the retailing environment occurs as a significant reason for the closure of many businesses. With the evolutions experienced in the retailing market, flexibility is paramount to enable a retailer to attract or maintain consumers. Its expansion was an indication of active management, growth, success and profitability despite the existence of massive competition from Dick Smith, JB Hi-Fi and Harvey Norman. However, the success of the company was for a short period as severe financial issues started arising from 2011 due to declining sales and profitability. The failure of WOW Sight and Sound Company in 2012 was due to the company’s inability to adopt changes in the retailing environment through the achievement of organizing functions in management. With online retailing appearing as the most preferred mode of buying and selling products, there is a necessity for businesses to select the best approaches that allow them to compete fairly in the market. Any company that fails to change according to the market dictates end up losing its consumer share and eventually closing due to poor organization skills in their management operations.

3.      Recommendations

Regarding WOW Sight and Sound case, embracing online retailing appears as the most appropriate strategy to regain popularity in the market. The fact that people use computers, tablets, and smartphones in buying products make the retailing strategy the most appropriate strategy. Besides, there is a wider availability of products and services to choose from, with prices favouring all people in spite of the economic class. Thus, it should continue providing affordable products that meet all the customers’ needs. Moreover, the availability of related software such as apps, e valets, and digital fliers, mobile payments allows customers to buy anything, anywhere, and at any time. The internet is currently part of people’s lives, and WOW Sight and Sound require taking advantage of that. Thus, the firm should use online platforms such as Facebook, Google, Instagram, and YouTube extensively to promote its products. Lastly, as a way of overcoming the stiff competition in the online platforms, WOW Sight and Sound can utilize further approaches which attract customers into the website. It can offer free delivery, black Friday sales, as well as flat postage rate regardless of the value, size, or quantity of products, loyalty points and cashback offer in their websites. Basically, applying such approaches in the company will create an effective platform for the proper functioning of organizing as a management role in a business.

References

Eliasson Sternås, C., & Kamne, O. (2018). Brick and mortar stores in the 21st century: A customer-centric approach to omnichannel in fashion retail. Retrieved from https://pdfs.semanticscholar.org/9ab7/c876ecd77edafbe2a9ed55d96b4fcf0a3672.pdf

Ghahnavieh, A. E. (2018). The influence of marketing factors on strategic marketing planning in SNOWA Corporation. Business and Management Studies, 4(4), 51-60.

Nguyen, D. H., de Leeuw, S., & Dullaert, W. E. (2018). Consumer behaviour and order fulfilment in online retailing: A systematic review. International Journal of Management Reviews, 20(2), 255-276.

Piotrowicz, W., & Cuthbertson, R. (2014). Introduction to the special issue information technology in retail: Toward omnichannel retailing. International Journal of Electronic Commerce, 18(4), 5-16.

Rigby, D. (2011). The future of shopping. Harvard Business Review, 89(12), 65-76.

Zhu, J., Goraya, M., & Cai, Y. (2018). Retailer–consumer sustainable business environment: How consumers’ perceived benefits are translated by the addition of new retail channels. Sustainability, 10(9), 2959