Tutor profile: Jessica J.
Explain markup, and what the difference is between initial markup (IMU) and maintained markup?
Markup is the difference between the cost of product from the manufacturer and what the retailer sells it at, usually evaluated as a %, but can be evaluated as $. The original markup is the difference between retailer cost and initial selling price. When you start to factor in shrinkage, markdowns, and promotions, the difference between the final selling price and the retailer cost is the maintained markup , which is often referred to as gross margin.
In the rise of digital, is influencer marketing relevant? If so, why?
Market analysts predict that the influencer marketing industry will be worth north of $15 billion by 2022, a rise from $8 billion in 2019. It also gives companies who sell products options on who they can work with based on budget. Nano Influencers and Mass Influencers have a wide range of followers and reach, dependent on the target follower to influence a product purchase.
Recently, retailer favorite, Forever 21, filed for Chapter 11 bankruptcy. What do you think caused their filing, and how do you think is the best way for this retailer to turn their business around in order to offset their profit loss?
Their filing was caused by several reasons and are the same reasons they need to turn around in order to bounce back. They are facing what many retailers are facing, the rise of ecommerce, and opening too many stores during the peak of store retail before the ecommerce age, becoming over penetrated in the market. They need to re-evaluate best performing doors, and close doors that are not productive. For the over performing doors, they need to also evaluate lease agreements, and for leases that are not conducive to their new strategy needs, they need to build into and renovate updated stores. Next, there has been an exponential shift in changing trends and consumer wants in product that the company did not rise to the occasion for which caused a decline in consumer demand and want for Forever 21 product. With competition keeping up with trends and demand, the fast fashion retailer fell behind in product differentiation, clarity, and the ever evolving experience to bring the retailer into modern retail. To expand further on that, they lack the ecommerce sophistication for a full omni channel experience that has begun to cornerstone the industry and give the customer the flexibility they want.
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