Each element of a business has its own life cycle, including the business and the industry itself. A retail store, such as a department store, and an individual product in the department store, such as a pair of pants, each have separate life cycles. These life cycles both follow the same basic stages, but the department store itself has a longer life cycle.
The department store may introduce a new style of pants each season. The store constantly introduces new pants styles to its customers, so the life cycle of a pair of pants may be very short if customers don't like it. The department store itself requires a much larger investment to start up, as well as higher introduction expenses such as holding a grand opening, so store introductions occur less frequently.
In the growth phase, the main focus for a product is increasing the total number of units of the product that customers purchase. If customers like a certain style of pants, and they purchase many pairs, the retail store concentrates on ordering more pairs of pants from its supplier. The growth phase for the store itself is different; if a department store has more customers than it can fit comfortably, it can open up another outlet in a mall in a nearby city.
Both individual products and retail stores are subject to life cycles that differ based on customer demographics. A fad product or a fad store has the shortest life cycle, involving a large number of purchases during a short period, and then a steep drop off. According to Cornell University, fads are more popular with younger customers who have extra money to spend. A department store that focuses on selling work clothes may both last longer and stock the same clothing styles for long periods because fashion is not the main concern of its customers.
During the maintenance phase, a store can change its overall style. A retail store may decide to install large windows so that customers can easily see the products inside, or paint the walls a different color to attract more customers. The maintenance phase for an individual product, such as a pair of shoes, usually focuses primarily on price reductions.
At the end of the life cycle, a retail store is more useful than an individual product. The company can sell a department store that has few customers to a more popular retailer, or rent the store out because the building and the real estate retain value. If a product such as a pair of pants has declining sales, each pair of pants in the retailer's inventory is much less valuable, and the company may have to sell the pants at a large discount to eliminate its excess inventory.
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