Category Killers (2005)

CKThe book Category Killers: The Retail Revolution and its Impact on Consumer Culture (2005) is by Robert Spector, a “a motivational keynote speaker and consultant on world class customer service”. The book discusses how many sleepy small towns in the US have become fertile grounds for large category killer stores. It also traces the rise of category killers when Charles Lazarus founded the first Toys R Us store in Washington DC. It concludes with an aptly-titled section “The winds of change for category killers” where he describes the forces of change that are threatening companies in this retailing niche.

Category killers, as Robert explains, “have dramatically altered our buying experience, becoming the most disruptive force in retailing- and everything else that retailing touches”. But, as a student asked me, what exactly are category killers? Robert provides a good description of these group of stores in his book- These stores have a “mammoth footprint- twenty thousand square feet to more than one hundred thousand square feet” and “specialize in a distinct classification of merchandise such as toys, office supplies, home improvement- while offering everyday low prices and wide and deep inventories”. They are called “category killers” because “their goal is to dominate the category and kill the competition- whether it be mom-and-pop stores, smaller regional chains, or general merchandise stores that can not compete on price and/or selection.”    

The book is certainly interesting to read! Almost everyone of us has shopped at one of the category killer stores at one point or another, but never really thought much about them. Robert’s writing style is entertaining and gentle as he takes the reader through a journey of this part of the retail industry. However, at some places I didn’t get why he said what he said. Consider the chapter title: “Paper clips in Portugal”. I don’t think the chapter ever explained the relevance of this title. But these are minor irritants in what is otherwise a book worth-reading.

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139 responses to “Category Killers (2005)

  1. Lan-Hsin Cheng

    Being an international student coming from a high density country, I was amazed by how large a super store could be in U.S. I remember when I first came here and went to Walmart for grocery shopping, I spent 2 hours in the store and still couldn’ finish it because it was extremely huge. There’s no supermarket could compare with it in my country.
    Walmart is a store that you could buy everything you want. A lot of stores like HomeDepot, PETsMART are also the big specialty stores that design for consumers that could finish one-stop shopping in a place. This kind of stores are especially in US and it’s also a symbol of American culture.
    I am always curious about their business strategies about operating a super store, how did they maintain so many items and how did they choose their locations…etc. And I am also curious about what’s the influence to the small retail store? If I were the small retailer store, how could I survive?
    I can’t wait to keep reading the following chapters and I believe this books will give me more in-depth understanding.

  2. Koichi Tanaka

    Growing up in New York City, I have never really shopped at a big shopping center before. Department stores such as Macy’s and Bloomingdales, yes, but something on the scale of Wal-Mart or Target was something that I have never really experienced until I went to college.

    New York City is a place full of small stores, chains, specialty shops, etc. The culture and climate there is a very cultured – almost elitist, over-educated, well read, and very picky. The economics’ thought that products are just ‘substitutes’ can be easily thrown out here: since NYC is a place where you can pretty much find authentic versions of the world’s arts, foods, culture, languages, etc. There is also a great underbelly of the hard-working blue collar immigrants, and this adds a whole other level of diversity, colors, smells, culture, etc., that no one category, place, food, etc. could fully encompass this great ‘mixing pot’. New York is not just a city of 8 million. It is a city of neighborhoods, where every neighborhood has its own character, its own types of buildings, its own landmarks, and most importantly, its unique offering of stores.

    Now, if a large chain-store such as Wal-Mart or Target comes in, the small stores which supply these diverse groups of people with their specialty needs will become threatened, for they carry the things that Wal-Mart offers as well. The city prides itself on its diversity, therefore a bland, under-priced and over-supplied bargain bins such as Wal-Mart faces stiff opposition when trying to enter the NYC market, as was the case a few years ago (there were protests with people picketing!). However, there are 2 Kmarts in Manhattan, and these are mostly shopped in to buy house-supplies by many, such as light bulbs, big bags of Halloween candies, etc. One wouldn’t try to buy clothes or groceries at Kmart, for there are plenty of grocery stores, clothes stores, electronics stores, etc. that have more choices, better service, and a more unique shopping experience within a radius of 2 blocks!

    As Category Killers explains it, the big chain-stores are mostly spread out through suburban sprawl. It gives customers the ‘one-stop-shop’ opportunity, which is what began to kill competition from the smaller ‘specialty stores’ such as outdoor sports stores, etc. These chains destroy the small businesses, leaving the country with skeletal highways with bits of towns sticking out from them. The automobile lifestyle became associated with the death of a region’s unique offerings (such as local foods, culture, and arts), and instead replaced it with cheaply manufactured substitutes flown in from overseas in gigantic shipping containers. The category killers are a reflection of the intricate and delicate balance that must be maintained between making quality products accessible to the lower-income demographic, as well as the culture and a region’s unique offerings.

  3. David Farber

    Spector starts by introducing the topic of a catergory killer. A term he has used to describe a business whos intention is to “kill off” the existing compeition with prices and product selection that smaller stored can not compete with. Spector introduces a distinct category killer in many differing fields, starting with Charles Lazarus and Toys-R-Us (could not reverse the r). Interestingly enough, he has selected to include both Starbucks and club wholesalers. Although not tradtional big box retailers, Spector felt a discussion of category killers would be incomplete if Walmart was not considered. Afterall, Walmart does better in most industries than the category killers themselves.
    Perhaps the most interesting thing to come out of the first part of this book is the interrelation between the founders of many of the category killers. It seems that many of them have collaborated with each other to the extent that some serve on the boards of other category killers. For example, Charles Lazarus was on the board of Walmart. This is not nearly an exclusive example. Otherwise, I believe Spector is doing well to keep his bias (if indeed he has one) secret. He is careful to mention both the critical and positive influences of category killers, which is a bit too extensive for this blog. However, the point remains that he does well to provide facts from differing perspectives. As a final point, some of the category killers seem to be drifting to more service oriented company. Perhaps this is an effort to give an added advantage over Walmart?

  4. JYUN-TING HUANG

    Through several decades, from 30’s to now, customer behavior and buying experience have had significantly changed because of category killers which are also known as “big-box” stores. Category killers or so-called chain stores try to dominate the whole market, offer attractive discounts, and even destroy small and independent stores by using economics of scale to reduce prices of goods and services. Afterwards, some category killers gather together and share a parking lot to become a powerful shopping plaza with more than one hundred thousand- square-foot.
    Actually, not only the United Stated has category killers, but also my country, Taiwan has or more specially, they come from the USA but the difference is that no plazas with several stores grouping together. However, chain stores did switch customer behavior and attributes. For instance, whenever we want to buy electronic products, we will go to big chain stores instead of independent or local retailers since we are concerned about customer service, lower price, and high quality.

  5. Fatos Bektas

    Category Killers is a book about retailing and consumer culture. The book thoroughly examines these two main concepts as paying attention to the fact that those are ever growing concepts rather than stagnant. The environment surrounding the two are always in motion including locations, people, brand names, preferences, etc. The immediate implication of this is that the current success of a retailer does not mean the future success, so the key to permanent success is being able to stay up-to-date.
    The book is mainly consisted of three parts and I just finished the first part where the author sets the stage for the theme of his work. When you start to read the book, you first witness the amazing fact of lots of most famous category killers of USA to be located in 8.3-square-mile city of Tukwila. The north, south, west and east of the city are full of those stores such as Toys ‘R’ Us, Target, Bon Macy’s, etc. This fact is surprising for one who is not familiar with such a culture since this stands as a picture of a city which is only reserved for business, like a huge factory built in a city and nothing else save for trade activity. This kind of beginning is impressive since the reader’s attention is achieved to be drawn at the very beginning and the course of the book is uncovered. As being in harmony with the beginning, in the first three chapters the book talks about the beginning stories of the widely known category killers such as Home Depot, PETsMART, Costco. It talks about their founders, how they were founded, what they are specialized in, and their marketing strategies.
    Apart from these apparent facts, what have struck me most is the author’s uncovering of secret marketing strategies of these successful brands. For example, Toys ‘R’ Us used TV ads for some time when TV was most popular. The children who watched these ads went along their parents for these specific toys that are advertised to buy. This created a different way for consumer behavior in those days, that is to say, consumers who are highly motivated to buy a specific product X, rather than any other in the same category. Lowe’s strategy of attracting women to their stores by designing charming stores is also another example of the same idea. To wrap up, learning how to look at the consumer world is so crucial to the heart of the business life. The more marketing strategies you learn, the more expert you become in business. The author as giving many key strategies of the type related to already successful business triggers a potential business person to start to think and see differently.

  6. Josh Clough

    Category Killers by Robert Spector is a book which is separated into three distinct sections. In the first section titled “The Colossal Competitors” Spector goes over what a category killer is as well as some interesting historical background on several “big box” stores such as Toys “R” Us, Wal-Mart, Barnes and Noble, Borders, Home Depot, Lowes, and PETsMART. The basic model behind these stores is to sell brand name products in large stores at a very low price which could not be beaten by smaller retailers… hence the name category killers.
    I found the portion about Starbucks interesting because it was different than the “big box” retailers yet they are still a category killer. This means that Starbucks was able to take on the coffee industry and simply drive competition out of areas which it resided in. However, Starbucks strategy is not low price, large buildings or large parking lots. Starbucks simple strategy is to saturate areas with their stores which creates free advertising (the stores themselves) and drives competitors out.
    The U.S. retail industry really has evolved over the years and this book starts to point out (in the first section) some of the historical events which have caused this change. It’s interesting to read some background about these “big box” stores which have received so much negative publicity. One thing that really struck me upon reading this first section was how negatively I personally see some of these companies but not others. For example, retailers like Toys “R” Us, Barnes and Noble, and Home Depot I have never had a negative association with… but others such as Wal-Mart, Sam’s Club and Circuit City have always had some negative view to me. This book implicitly points out that all of these retailers are essentially the same type of company which I found to change the way I view some stores.

  7. Mark Ryan

    “Category Killers” by Robert Specter explores the social and economic impacts “big box retailers” have had on the changing retail landscape over the course of the last century. From the rise of the department store over the local mom and pop stores, to the eventual destruction of these department store giants by the even bigger and more influential “category killers” Specter explores some interesting changes in society. The book is split into three parts which describe who what and how big box retailers have come to dominate the market.
    As of now I have only finished the first section of the book. To this point it has been an interesting read. While Specter explains the background on many of the big box retailers, by the time the first section of the book was complete I was left with the impression that these retailers are really all the same. They seek to dominate their chosen niches by reducing prices and offering tremendous volume to consumers. This seems to be a weakness in the design of the category killers, as most seem to be using the same business model (at least at this point in the novel). As the history of many of these companies explained, many founders came from department store, or small mom and pop, chains. This seems to be an early form of disruptive innovation, where a new, but in the beginning not necessarily a better, form of business technology was developed that eventually supplanted the old way of doing business. In this case well established department stores, with knowledgeable sales staff and a multitude of different products, were replaced by large, impersonal stores that sold one particular category of products, albeit very well. Another thing that struck me was the cyclical nature of the laws that were used to first try to prevent department stores from spreading across the nation in order to protect independent retailers, and then the laws that were again used almost 50 years later to try to protect department stores from big box retailers.
    The constant expansion of the category killers is by no means secure. Even diversification and continued growth in sales does not mean that you will not be supplanted by a larger and superior competitor. The novel illustrates this with its example of Toys “R” Us, the very first category killer, being supplanted by Wal-Mart as the largest distributor of children’s toys in the nation. Further reading should hopefully help clarify how big box retailers, let alone independent retailers, can compete in an increasingly competitive and global market.

  8. Jun-Ming Chang

    The term of “category killers” means that their goal is to dominate the category and kill the competition. At the beginning, Robert introduces the category killers by describing the growth of one region in Seattle. Later, in chapter 2, the author talked about the discounting and the birth of the category killer-Toys”R”Us. The success of Toys”R”Us is attributable to two factors: one is TV and the other is Mattel. In addition, centralized buying and computerized inventory management were not only to Toys”R”Us, but to every other category killers such as Wal-Mart, Target and so on.
    The key factor leads to the success of category killer is computing power. Although the discounting and one-stop shopping idea are extremely important. However, the category killer cannot succeed without computers. By modern powerful and cheap computing technology, category killers can easily establish a integrated supply chain and know when and what to replenish. Besides, through inventory management and their channel ( purchasing power), they can dramatically lower cost to provide goods at competitive price.

  9. Ilana Roth

    Growing up in suburban America over the last two decades, I have been an ardent supporter of category killers without even knowing it. Until I began reading this book, I had never heard of the term, much less understood what it meant and why exactly it applies to the stores I frequent. As a long time retail employee and business student, I have been fascinated by the picture Robert Spector is painting about consumerism and retailing in “Category Killers”.

    Spector starts off by defining a category killer as a store that has become so large within its chosen industry (or category) that it has effectively killed off all competition, from mom and pop stores to smaller chains. These stores have become dominant because they offer a selection so large at prices so low that other retailers cannot realistically stay in business and be profitable. He goes on to describe a commercial area in Washington that is so like what I’m used to that I can picture it in my head: mile after mile of road with huge, colorful stores line up on either side of it, one after the other. Every single store he mentions I have heard of or been to, and I can tell you their location and give directions to each one in each of the three cities/geographic areas that I have lived in. His descriptions are so eerily right on that I can almost hear “The Twilight Zone” music playing. He also provides a detailed history of many of the stores, describing their beginning and ascension to the role of category killer in a way that makes it seem almost natural they have turned into the behemoths they are.

    After reading the first part of “Category Killers” and learning the history behind all of these retailers, I am eager to continue delving into the book and learning more about this phenomenon. Already, Spector has made me more aware of the American consumerism that is a part of my daily life and more conscious of the underlying consequences that my retail habits have on the overall retailing landscape.

  10. Allie DeMartino

    ‘Colossal Competitors,’ Part I of “Category Killers,” discusses the history and background of the big-box retailers in today’s retailing industry. Spector goes through how and why discounters, big-name retailers and warehouse-type stores have all come into play in today’s market. From Macy’s to Toys R Us, to Wal Mart and other big-box retailers, Spector describes the evolution of the retailing industry and how discounting has become much more widespread and accepted. He looks at the actual founders of these institutions and how they developed the operational strategies of their respective companies, and eventually, how these stores succeeded in become big name category killers in the retailing industry.

    Delving deeper into the repercussions of these category killers, we must question what exactly they are doing to society today. Will this newfound homogeneity of retail options prove to be detrimental to consumers, or can we consider them to be a benefit—due to the cost cutting and availability options these stores offer? I’ve always heard about the controversies being discussed in terms of these big-box retailers, such as the strict opposition WalMart has to unions within the company, even though it would mean fairer wages/benefits for employees.

    The book also discusses the wiping out of smaller, locally-owned businesses by the category killers. Yes, category killers are able to bring in more products at a potentially lower price, and, yes, they are able to create new job opportunities. But these advantages come at a cost. Once the local businesses have been destroyed, much of the money that was being circulated back into the community by them is now leaving the community, and going to the large corporations. One could argue that these companies are essentially stealing wealth from the local communities. I am curious as to what new insights Spector is going to elaborate on it terms of these controversies throughout the rest of the book. Clearly, there is much to be debated and learned from examining these category killers.

  11. Felix Hernandez

    Category Killers so far has been quite a surprise. I have been reading about companies I know today but don’t necessarily know how they got there. From the rise of Toys R Us and Home Depot to every other “Category Killer” out there, the author does a good job of painting the picture and telling the story. So far the Chapter on Toys R Us has been the most eye catching, it is quite fascinating how he was able to convert his Dad old store and adopt to the changing needs of the baby boomers. It took a very smart man to recognize the opportunity and be able to come up with a store/idea to fill and create a need for toys using the baby boomers to capitalize on his products.

    The book so far is pretty good, the author does not stay in one topic, and he jumps around with different ideas and applies them to different companies bringing in different perspectives. In a way I like his method because it keeps me engaged, however, I’m not sure that at the end of the day retain as much information because he feeds a lot of background of different companies at the same time.

  12. In the first three chapters of “Category Killers”, author Robert Spector essentially lays the groundwork for his findings and research into the worldwide retailing industry.

    He describes first what companies qualify as category killers, and how they came to be. As has been mentioned, many of these pioneering individuals, because of either common values, or because they suffered from the same set of obstacles, worked together and supported each other in establishing, and expanding their respective businesses.

    Spector goes company-by-company in discussing early category killers, from Toy R Us, to Home Depot, and Staples, and spotlights the people and actions that brought them into being. It is fascinating to come to understand the conditions and motivations that helped spawn such operations, and also to learn about the challenges they face as they develop and grow.

  13. Cory Johnson

    For September… pardon my tardiness

    For this month, I read Part I, which is comprised of chapters 1-3. In the introduction, Spector introduces the reader to the concept of the category killer, and explains his motivation for such a description. He also gives a brief summary of how the remainder of the book will be laid out. In chapter 1, he gives a history of how the category killers came to dominate an area south of Seattle, WA, which now houses almost every category killer in one of the many “power centers” (a concept explained later on). Chapter 2 looks at how discounting came to be, specifically with the rise of Charles Lazarus’ Toys R’ Us store, one of the first discount-centered category killers. Then, in chapter 3, he discusses how other companies took the Toys R’ Us initiative to expand the category killer genre to other markets, such as office, pet, and home/garden supplies.
    When reading this book at first, I must admit that I was not wholly enthused about reading it. The introduction seemed a bit weak for what I now consider to be a very interesting book. I did enjoy the history of the area south of Seattle, for it really goes to show how nothing can become everything in only a few short decades… it would have been a nice real estate investment there. I also enjoyed the description of Charles Lazarus’ beginnings… amazing how a $5,000 investment into a bike shop could somehow become Toys R’ Us. It just goes to show how being adaptive and creative is the key to success in the business world, something Spector points out many times throughout the course of the book.

  14. Cory Johnson

    For October, I’ve read Part II, comprised of chapters 4-7. Chapter 4 discussed the concept of discount pricing, a strategy employed by nearly every category killer nowadays. This includes Wal-Mart, the Internet, and some of the strategies used in addition to discount pricing, like private labels, strict inventory management, and the introduction of self-service. Chapter 5 discusses the birth and death of department stores, why they failed, and what they did in an attempt to remain competitive with the “big-box” category killers. Chapter 6 talks about the state of expansion for these stores, and some of the strategies they are using to reach out to new markets, including power centers, smaller store formats, and the jump to urban areas. Chapter 7 wraps up this section by discussing the ways that some of the category killers are looking to expand to overseas markets.
    So far, I feel like I’m getting a better understanding of some of the problems faced by both the category killers, and their competition. It surprised me that Spector really hits on the idea that category killers must grow, or they will die. I had always assumed that given the size of your average Home Depot or Wal-Mart, growth was not such a necessary mission. I had never really given any though to the fact that nearly every category killer is sharing their market with at least one other major player. However, this idea becomes apparent after learning about the death of the department stores, once considered so large and unbreakable that malls would pay them million of dollars just to open a new store in their mall. Now, only a few decades after the era of department stores, they have lost nearly all of their influence when compared to the category killers. Makes me wonder if the category killers could meet a similar demise in the future at the hands of some new store format.

  15. David Farber

    Comment #2

    Although burried in the midst of other topics, the most important point Spector attempts to make in the second part of this book is the need for growth among category killers. He pointed out that the ever increasing intellegence of the average consumer had increased the need for lower prices and scale economies. That need threatened the once all powerful department stores. Department stores began to combine and/or merge with each other in order to try to capatlize on these economies, only to become so homogenious that customer loyalty has become a thing of the past. As for the category killers themselves, they have experimented with smaller store formats and overseas expansion, only to run into even more problems, such as imitation.

    It is interesting to note the irony of what happened to the department stores. In order to keep costs down and continue to grow (necessary for survival), department stores ended up essentially digging their own graves. The mergers trandformed department stores into clones of each other. Further need to cut costs involved cutting staff, reducing customer service, a once popular draw of department stores. What makes this so interesting is now that category killers are facing similar growth issues, one must wonder if they are digging their own graves too. Will category killers soon be replaced by yet another new type of store?

  16. Josh Clough

    The second section of the book “Category Killers” by Robert Spector is titled “ How and Why They Dominate”. Wal-mart has the low price strategy down to a formula. They do it so well that and so efficiently that other retailers can not catch up. Technology advances, such as up to the minute pricing adjustments, online shopping, self service, and inventory controls, retail shopping has become very advanced and much more efficient which equates to lower prices.
    To be completely honest, before reading this portion of the book I had no idea why anyone would shop at department store when there were so many stores that provided better prices, inventory, and in some cases better quality. In fact, that is what this portion of the book addresses. A department store is simply a store which sells many different “departments” of items… from clothing and appliances to electronics and hardware. Now I realize that with the coming of category killers, it’s no wonder that department stores have become a thing of the past. Prior to big box stores, department stores ruled the retail industry. They provided all the products that a person needed right under one roof. One may think of Wal-mart as doing this same thing but department stores don’t have the warehouse feel and have higher quality goods than the low price Wal-mart provides (plus Wal-mart wasn’t around during the early to mid 1900’s). A good example that Category Killers brings up is the comparison of a department store to the modern mall. It could be argued that the modern day shopping mall is what started the slow death of the department store. This happens because when a person goes shopping and they know what they want they simply go to the store which provides that type of product (in a mall). In a department store, the shopper must wade through the different departments and the massive sized store to finally find the product, which may even require a sales associate. Inevitably, it seems that unless the department store business model changes the death is coming. Spector actually says “…but I’m still looking for the model. Where is it?” saying that the department store model is foolish if existent at all.
    When building malls they used department stores as an anchor to draw in customers to the other stores. As malls were built more often the department store companies didn’t need any more stores and they ended up getting huge incentives to build these unnecessary stores. However with the department store going downhill it’s easy to say that these anchors may be ineffective and essentially unnecessary. Supercenters filled with many big box stores are becoming more popular and more common. However, there is still a market for smaller stores in rural areas where companies like Home Depot are seeing profitability. Ultimately these big retailers are looking for anyway to grow to meet wall street’s demands.
    Expanding internationally is another challenge for big box stores. Even those retailers who expand internationally must change their strategy to adapt to the market they are targeting. Often this means that stores are much smaller than the stores in the United States. International expansion becomes necessary to drive profits up as the US market is saturated… after all the big box strategy is no longer a secret. While some international markets are fairly easy to enter for some retailers other markets may be nearly impossible. For example, a company called Hornbach has made it nearly impossible for Home Depot to expand into Germany due to their massive expansion and longtime presence in the market. U.S. categories must be very witty to make the proper move when expanding into new markets as we see a push for international expansion in the future.

  17. JYUN-TING HUANG

    Comment #2

    To be category killers and big-box retailer, companies use many methods to achieve this goal such as centralized buying, computerized inventory management, and so on which are related to information system. Companies track each supply chain process to make it optimized or get some signals to readjust their strategies.
    Today, category killer does not necessarily mean physical stores, on the other hand, it switch into Internet business, which originates from customer behavior changed. There is a good example, Amazon. Amazon offers diversified products just on line with low prices, high quality, and good customer service. Consumers only stay at home, but still can enjoy shopping and most importantly, receive excellent service. As a result, category killers are everywhere; it’s always around us, even you surf on line. In particular, we can shop not only in our own countries, but also other countries, no matter how far it is. It is a worldwide trend.

  18. Lan-Hsin Cheng

    I’ve finished reading the chapter 1-5, which gave me a comprehensive view of the history of the raise of category killer and the reason why category killer could dominate the market.

    Category killer are everywhere and in your everyday life; I am amazed that there are so many “category killer” in Binghamton area, such as Sam’s club, Wal-Mart , Target, Best Buy( it’s newly opened in October, 2009), Lowe’s, Home Depot, Toys “R”Us, Staple, B&N and Starbucks….etc.. According to the books, since the appear of the big-box stores (i.e. Category Killer), it dramatically change the way how people shop, where they shop and how much are they willing to pay for a commodity. People enjoy the low price that brought by the big-box stores and take it for granted. Price seemed to be the most important factors that decide if you can be the leader in the industry. And thanks for the booming of e-commerce, it also helps consumers can easily search for the product they want and compare with the price until they find the lowest price.

    The more I’ve read, the more I find that I need to discover. It’s kind if embarrassing that I’ve lived in Vestal area for a year but I’ve never been to some stores. Just like professor Gupta mentioned before “you could never write a good industry report if you’ve never been to these stores”.

  19. Part two of the book describes in more detail just how category killers that dominate today came to power in the marketplace. First, he details the rise and development of department stores, the predecessors to the Walmarts of today.

    It was very interesting to hear about the decisions and mistakes that these department stores made to bring them to where they are today, and especially interesting to consider their prospects for a somewhat grim future. Also, having worked a time for one of the declining firms, I enjoyed hearing about their position in the marketplace from a big-picture, objective point of view. It is surprising to consider that companies that I grew up with are facing bankruptcy and inevitable struggle going forward.

    Spector also illustrates how modern retailing giants grew into new markets and new locations to be able to maximize each dollar. He includes a chapter dealing with efforts of individual companies abroad, and what has, and has not, lead to success for each of them. He provides insight into copy-cat international retailers, and the obstacles in dealing with overseas governments.

  20. Ilana Roth

    The second part of “Category Killers” is entitled “How and Why They Dominate”, and it goes through the history of pricing, department store competition (or lack thereof), and growth, both domestically and internationally. The pricing chapter discusses how big box retailers and discounters are able to price their products competitively and increase their profits at the same time. The department store chapter follows the rise and fall of the great American department store, and how their own growth ironically has led to their failure. Chapter 6 explains how these retailers must grow in order to remain in business, and how they are doing this by adopting new store formats, expanding into new geographic locations, and expanding their product offerings. The final chapter in this section explains category by category why some retailers have been successful expanding overseas while others have not.

    The chapter that really struck me was chapter 5, the department store chapter. I can still remember as a child following my mother through the department stores in our local mall, when Macy’s was our ultimate shopping destination no matter what we needed. As I’ve gotten older, the department stores have been less and less of a draw, especially as they have gone through consolidations and closures. Even at the malls in Albany, where I spend most of my time now, the department stores have gone through several changes over the past few years. It has been almost painful to watch what happens to a mall when the large anchor stores sit vacant. The larger mall in Albany has lost some of its department store anchors, and the mall has taken a turn downhill: there are more “seedy” customers who hang out instead of shop, and lots of cheap (and usually temporary) stores come and go. The mall by my parents has taken a different route, after succumbing to the inevitable downturn for many years after closing some of its anchor department stores. It has recently been renovated, new stores have been added, and a higher end clientele now frequents the mall. It has been interesting watching these malls adapt to the changing times, and it will be even more interesting to watch what happens as department stores continue to lose their relevance.

  21. Mark Ryan

    One of the things that really struck me while I was reading the book is the overall change in how business has been changed by category killers. Department stores used to be famous for there personalized service, and the depth of knowledge every individual worker displayed. I remember going to Boscov’s in Binghamton and having someone take care of you the entire time you were in the store. This was especially true in more specialized departments like shoes and dress clothing.
    With the rise of the big box retailers, I am struck by how impersonal service has become. According to Spector self service is a very efficient way of reducing costs, and most category killers take full advantage of this. Another thing I was struck by was the ever increasing level of technology needed to run a efficient Category Killer. As prices come down to compete with other large retailers, a more efficient inventory and product tracking system is needed. This alone means that many of the smaller retailers cannot compete just due the the giant costs involved with continuous modernization.
    Spector said that loyalty to Category Killers is rather low, as due to the internet and every lowering in store prices customers have the freedom to shop for the best deals. It makes me wonder how a Big Box retailer would do if they reintroduced personal one on one service in key departments.

  22. In the final chapters of Category Killers, the author discusses the resistance that powerful corporations like Walmart and Starbucks have faced and will continue to face as they attempt to maintain, and even gain market power. He describes different methods that local businesses, as well as politicians, and even just upset citizens have taken to resist or deny big-box retailers. These tactics range from legislation and spirited gatherings, to more creative tactics like silent shopping cart protests in Walmart stores around the nation.

    Spector states that even the most powerful retailers feel an enduring need to “grow or die” because of the nature of their competition and the industry, and his conclusion centers around what the future will hold for each of these firms. They will certainly face threats from the internet, they will face threats from governments and they will face threats from each other. He underlines the need for continued progress and innovation for even the largest companies because the business landscape is always changing, and the future belongs to those who best anticipate that today.

  23. Jun-Ming Chang

    The most appealing topic is “category killers everywhere”. Indeed, Wal-mart, Best buy, Barnes & Noble and even Starbucks are kind of category killers. However, category killers still need to face problems, one of which is thinner margin. Thanks to high technology-Internet, EDI, RFID, category killers can squeeze the most profit. In addition, self-checkout helps reduce the labor cost and increase the quality of customer services. Private-label goods also contributes to greater profits margin because category killers do not need to pay shipping, marketing advertising cost to brand-name manufacturers. The trend of private-label goods is steadily keep upward.
    I think that since private-label products can provide customers much lower price goods to choose, department store business should think about how to face such challenges. Because our project is about Nordstrom, one of department stores, I am interested to know how department store business could react to category killers’ challenges. By the way, it must be an interesting issue that how do manufacturers solve this dilemma: to produce private-label good for big-box retailer with a thinner margin or to keep produce brand-name ones with higher profit margin?

  24. fatos bektas

    The part of the book I will be talking about now mainly concerns with pricing and competition. The pricing issue is closely tied with how the fact that the cheaper the better became people’s primary criteria for shopping. This obvious fact has caused retailers and even wholesalers to change their cost and price strategies. They started to work on driving the costs and prices down and down in every part of supply and demand chain. New systems and technologies have been adopted by the retailers to have a better understanding of people’s buying patterns and product movement on the shelves. They started to use price optimization software for price adjustments and examining competitors’ prices. Retailers became more self-service oriented for the customers, in other words, they have cut the in store costs by reducing the number of people serving the customers. For example, Circuit City is one of category killers which is of 100% self-service type. Competition aspect of the section explores how some companies became successful and some were doomed to failure. The main story underlying competition is the big failure of the department stores. Department stores were once successful due to the fact that they served middle class urban shoppers, they were located in convenient place, they had a wide selection of superior goods at affordable prices, etc. Yet, they were defeated by category killers since the latter has better prices, better customer services and free standing locations.
    The whole book always keeps one alert of the fact that consumer market is always changing and if one does not take the right actions to adjust itself to the changing conditions it becomes doomed to failure, in other words, the past success does not guarantee the future success. A way for companies to be competitive and successful can be extending their established brand to other products. Starbucks achieves this in number of ways, which smell genius. Starbucks follows this strategy with other companies which are expert in their sector. For example, it produced Starbucks ice cream with Dreyes Grand Ice Cream Corporation. It has a deal with Pepsi Company to produce bottled frappucino coffee beverage. The example of Starbucks is important since it proves that not always offering the lowest price receives appreciation. If you offer something more valuable than the ones your competitors offer, you have a high probability of success.

  25. David Farber

    Comment #3

    This section of the book begins with a description of present issues facing big box retailers and follows up with a brief look into their future. Spector initiates the discussion with his take on eminent domain, a law that allows corporations to buy out private property in blighted areas. Spector points out that companies such as Costco attempted to abuse this power in order to move in cheaply to attractive areas. It is probably no coincendence that Spector introduced the problems with eminent domain to lead into a discussion about how opposition to big box retailers has emerged in greater numbers recently. The opposition emerged through legal means such as zoning laws, as well as guerilla “resistance” groups. The final chapter of the book points out that the big box retailers are not omnipotent. If they do not wish to go the way of the traditional department stores, they will need to continue to evolve, grow and customize themselves to be even more vital to consumers.
    It is interesting to note how some big box retailers are willing to use eminent domain, knowing how it would result in harsh negative press. This is especially true given the already lingering resentment that many have for big box retailers. The resulting loss of sales that could potentially result may be more then enough to offset any gain received by using eminent domain. In any case, the fact that companies are willing to go to such extremes is symbolic of the need to cut costs at every point and achieve greater value for consumers. After all, if big box retailers want to stay around, it seems like they will need to take drastic measures.

  26. Ilana Roth

    In the final section of the book, Spector focuses on some of the current issues facing category killers and how they are affecting their business. Chapter 8 concentrates on the backlash against category killers, in particular Walmart and Starbucks. While many governments like them (they bring taxes, jobs, development, etc.), there are grassroots and citizens organizations revolting against the companies for their impersonal nature, inattention (perceived or real) to environmental and human rights issues, and their destruction of locally owned businesses, among other things. Chapter 9 provides a wrap up of the book and takes a look at how category killers will fit into the future of retailing, if at all. Spector provides some insight into the potential retail landscape down the road and how category killers will have to adapt to remain relevant.

    In chapter 8, Spector mentions a group that protested outside of a Seattle Starbucks against certain practices such as not promoting fair trade coffee, not certifying their coffee meets particular safety standards, and not providing high enough wages to the coffee growers. However, as he mentions and as we’ve learned in other classes, Starbucks has stringent policies in place to ensure their growers are treated fairly and that their coffee is safe and high quality, and they do in fact sell a high volume of fair trade coffee. It seems as though people are so eager to revolt against these large corporations that they’re getting ahead of themselves and not checking their facts. As a company, what should Starbucks (or any other company) do when they are being attacked for issues that they are taking care of? I think providing more consumer education would be a good first step, but I’m not sure how effective it would be against the people who just want to protest whether or not they have good reason to. From a consumer standpoint, it’s great to have groups that check up on category killers and hold them accountable for the negative things they do, but from a business standpoint, it seems like an uphill battle to protect your company from undeserved negative attention.

  27. fatos bektas

    The Growth chapter of the book starts with the story of the fall of department stores and malls, and continues with the growth of category killers as making use of this situation. The reasons for the emergence of such a circumstance had already been told in the previous chapter, that is to say, the inability of the department stores to adopt themselves to changing customer needs and demands. From here on a new concept for shopping had appeared, that is, ‘power center’. Power centers had been the new hope for the sector to grow. Power centers are located in large empty areas. In a power center there are many category killers such as Wal-Mart or Target. The parking lot, too, is huge and getting in and out of the center for a customer is pretty easy, which made these centers more and more attractive to the shoppers. Another option for growth was opening smaller sized stores by the category killers to meet the customers’ needs. The reason for such an attempt was that category killers were needed by inner city areas, too but in a more convenient shape. Different category killers followed different paths for pursuing the goal of opening smaller stores such as Wal-Mart owned Dollar stores. Growth in the national borders is very crucial yet is not the only way for a category killer. The following option is competing in international markets. However, this is not an easy task to achieve. Competing in an international market necessitates a deep understanding of the local culture and local needs. While some of the category killers such as Starbucks achieve to compete in those markets, some of them like Home Depot failed. Here the issue with competition in international market is not only being successful or unsuccessful but also sustaining the competitive edge of the business. The companies abroad adapt the strategies that US based category killers had created and beat them in their local market. The book talks about this copy cats issue yet does not talk too much about how those category killers deal with that issue. Although Starbucks was once beaten by the local market competition in Japan, it is now the leader in its sector in most of the international markets. There are many companies doing similar kind of business yet not beat Starbucks. Some clues about how Starbucks or any other successful category killer has done would have been invaluable.

  28. Felix Hernandez

    From the previous post the book has taken off. It has taken all the category killers introduced in the first few chapters and used them as examples and supporting points to each argument. From the pricing and how they were able to accomplish the “everyday low prices”. He used Wal-Mart to illustrate the big effects that these low prices have on the consumers, estimated to save them about 25 billion per year. He also brings up the effects of the internet and price cutting. He then goes on to going more into depths about the strategic moves that these chains undertook and made them successful. From carefully placing each store in a specific town or area, depending on the demographics and population in a few mile radius to calculate how big a demand they might have and build a store of appropriate size. It is really quite a process that I have been always fascinated with where developers build around these big companies in order to get traffic through their development. At the same time the stores use this as leverage to get the best deal possible on their leases. I was surprised to learn that at one point developers were offering so many perks to allure companies in that 1 company was bought inventory for 2 years from the developer. All these effects are also ill effects of the struggling department stores that are leaving the big malls and developers need to fill the space at any expense.

    My favorite chapter so far has been the chapter on expansion. I think this was attributed because I read it right after the lecture on globalization in class. This made the book a lot more interesting because I already had an idea of the strategies that companies use during class. The professor actually made it really interesting in class and painted a good picture that was later reinforced by the book. The other reason I found this chapter helpful because it went into detail of Staples’ expansion, which I also had been doing research on because Staples is the company that my group was assigned. So far the book has a been a good read and has a good flow to it, look forward to finishing it up in the next few days.

  29. Josh Clough

    The third and final section of the book “Category Killers” by Robert Spector is titled “Categories of Change for Category Killers”. The chapter starts off with a very interesting discussion of sales tax for products which are purchased on the internet. I have personally been online shopping since back in 2002 and I’ve never really fully understood the issue of sales tax when purchasing items online. That is, why do some companies charge it and other don’t? Why are some companies for it and others against it? Why did it take so long for the government to finally step in and make some real “ground rules” on how this whole online tax thing works? Spector does a great job of addressing these questions. I thought it was very interesting how he points out that companies like Toys R Us and Wal-Mart (who have an online store) were very much for tax on online purchases. However, Amazon.com and other online retailers were opposed to it. At first thought this really makes no sense… why would anyone who does business in an online market be for sales tax on internet purchases? It really all comes down to one thing… in-store returns. The companies which do business online and in store have a big advantage if they can allow the customers to return their purchase in the local store. However, without charging sales tax it can be a very thin line between what can be legally done and what cannot. It also makes sense for these companies to support the tax because it levels the playing field for all online retailers. However, the one exception is that online retailers with a local store now can benefit from offering in-store returns.
    Next, “Category Killers” goes into a very interesting section about eminent domain which is where a piece of private property is condemned by the government for public use. It gives several examples of cases where very large companies use their power to get government action to gain sought after property. Some examples include Berman v Parker and Poletown Neighborhood Council v City of Detroit. Some more cases are given regarding Costco, Wal-mart, and Home Depot. Eminent domain is becoming a more common occurrence as these big box retailers expand and they are willing to admit that it is something that is necessary. However, there is a major push back from the smaller companies to remove these big box companies from their communities. Obviously the case of eminent domain is the most extreme case of a big retailer taking over a smaller… but isn’t it just as bad if the category killer puts them out of business? Communities are rebelling against these big companies including Barnes and Noble, Home Depot, Wal-Mart and Starbucks. Communities can sometimes be successful (but rarely) in pushing the companies out or never letting them in at all.
    I thought it was interesting that some of the smaller local retailers that are keeping their sales up are those who are diversifying from the big box stores. It’s mentioned in the book that many smaller local companies simply try to follow what the large retailers are doing and they ultimately fail. The best way to compete is to offer a different selection of products, even if that means offering high end. Another way is through the atmosphere and the layout of the store. This is the case with a book store called Wild Rumpus which offers kids a unique atmosphere which Barnes and Noble has tried to duplicate but cannot figure out the proper formula. Simply put, “a small specialty business competes by being special”.
    “Category Killers” mentions that when large malls come in they can generate a lot of sales tax for the local community. However, what most people don’t think about is the expense that is required to support the infrastructure of the large mall or shopping center. For example, in a small community mentioned in the book it should only require about 10-15 policemen but because of the tourism for the shopping center the city has to support 40 policemen. We could see how this could spread rapidly and cause a city to incur many costs which were not seen ahead of time.
    The book dedicates a section of the concluding chapter to the “Wal-Mart Effect”. After all, what’s a retailing book without mention of the Wal-Mart effect? I won’t go into detail on this topic since there is another entire book covering this.
    The book concludes by looking to the future of the category killer. Spector seems to think that there is a possibility for category killers to go the way of department stores if they do not watch out for other channels of distribution such as the internet. What will happen? I guess we’ll just have to wait and see.

  30. Allie DeMartino

    Part 2

    The second section of “Category Killers” discusses why exactly category killers are trumping department stores in many different competencies. These competencies include pricing, competition, growth, and expansion. Spector looks at different category killers and how they have strategically created an environment that allows for drastic price cuts, an innovative operational model, the ability to increase the number of stores by creatively adapting their original models, and a global-looking outreach.
    In this section, Spector delves into the specific histories of the retail world, and the evolution of specific companies. I found his discussion in the “Competition” section interesting when we look at Sears, a company that in the past had such strong brand equity, but was able to lose such control of its image and business strategy/vision so easily. It makes one question what exactly the leaders of this company were thinking. Perhaps they did not suspect the entrance of viable competition, but I am hesitant to believe this—as I’m sure any top business executive has this in mind at all times. Perhaps they felt they could rest on their laurels, as they were once at the top of their industry. Whatever the case may be, I would have like to know more about exactly what happened to case Sears’ ultimate demise.
    Another topic I found interesting was the ease (or difficulty) category killers may have in entering different markets. The Canadian versus Japanese markets, for instance, are so vastly different, that no one singular approach could be used to start looking outwardly. This, as discussed in class, represents the difference between the multi-country strategy and the global strategy in terms of a company’s approach to globalization. While the global strategy may work for some companies, the examples we were given in this book strongly back-up the concept of a multi-country approach. If the businesses who were trying to move into Japan had considered the endeavor more effectively, they may have made a different decision as to whether they should enter that market or not.

    Part 3

    The last section of Category Killers talks about the aftermath of the advent of these companies. Spector talks about eminent domain and how it has “helped” many of the big-box retailers accumulate land within cities that may have previously been unavailable to them. This is done through governmental intervention, oftentimes simply to placate the retailers, which give major tax revenue back to the communities that they are in. Next, it talks about the competition of small retailers to category killers, and how they must differentiate themselves in some way in order to survive. Lastly, this section touches on the future of category killers- the challenges they may face and the changes they may need to be making.
    What I find most interesting in this section is what I see as an overarching theme in the changes of our society today. To compete with the category killers, according to Spector, a small retailer must go above and beyond what the category killers are offering: a specialty service or product, a new store format, or distinguished employees. Later in this section, Spector quotes John Eyler, former CEO of FAO Schwartz: “All of retail has become more theatrical” (Spector pg 183). This reminds me of my E-Business class, where we’re learning more about web 2.0. Basically, all of these shifts in cultural needs and desires are not just specific to one aspect of our lives: it appears that today, consumers want more. Whether it’s an impressive ambiance at your local bookstore, or a more user-oriented website on which you would purchase your books, shoppers seem to want an experience that goes above and beyond just shopping. These changes seem to have developed because of the feverish competition among all of the retailers today to give the consumer something that no one else is giving them (even if the consumer doesn’t really need it).

  31. Jun-Ming Chang

    Even if the category killers used to be big-box stores which have a lot of parking lots, spacious aisles and singles-level store, they still need to consider customers’ needs. For penetrating into downtown and suburban area, they have to adopt abandoned facilities and become smaller, multi-level stores and narrower in order to the needs of those who are time-pressed want to look for specific products. In addition, dollar stores are emerging. Although dollar stores are viewed as attraction for lower income level families, they are drawing more and more affluent customers. Since the domestic market is getting saturated, category killers need to seek opportunities outside the Unites States, especially Europe and Asia. However, other countries may not welcome those category killers which may endanger indigenous retailers. Thus, it is also challenging to enter other regions.
    Here, we need to think about those category killers’ strategies. The author mentioned the failure of Office Depot in Japan. Office Depot neglected Japanese customs and needs, and therefore it led to failure. Sometimes, early success cannot guarantee later success. To take Starbucks for example, it faced declining sales in 2002. This situation forced Starbucks to provide small kiosk-sized in subway and train booths for commuters. Thus, we can understand that the market is always changing. Businesses should smell the change earlier and accord with customers’ need and then sustain competitive advantage.

  32. Lan-Hsin Cheng

    The impact of Category Killer over the whole retailing industry is apparent. Department Stores are now struggling with the decline of sales and further consolidation is unavoidable for those survivors. For category killers, they also keep seeking for other possible opportunity for them to grow as well. Not only do they start to take different strategies by either building larger stores in undeveloped areas or by building smaller stores in downtown areas, but also expand globally to Canada, Europe and Asia. Besides the opposition and backlash from the public and the government, category killers also face the challenge brought by Wal-Mart, a mega-billion monster that steps in every category of the retail industry and gains more market share than many category leaders.
    The author didn’t mention what the future if these category killer will be, but he believed that
    the one who truly understand customer’s need will survive.

    I’ve read the book for more than twice, everytime I’ve read, I could find something new and that could shed the light on me.
    This book is overall a good introductory reading for people who want to have a basic understanding the retail industry of U.S.

  33. JYUN-TING HUANG

    In Part Three of Category Killers, the author talked about an major topic, eminent domain which means that government takes the private property for public use. As a result, this will lead benefit to big-box retailers since “location” is the most important criteria in retail industry and they can approach it through eminent domain. Of course, category killers also contribute huge commercial taxes to government or municipalities as well as reward community. Hence, all of them can gain advantage evenly.
    Moreover, “Wal-Mart” effect is a pretty interesting case, mentioned in this book. ” Whenever the Wal-Mart SuperCenter goes, then the other big boxes follow….” said Malcolm R. Riley (p. 157). Apparently, Wal-Mart SuperCenter brings government excellent returns. Despite, some opponents debate that “Wal-Mart” effect causes more costly expenses on infrastructure which does not profit the local government.

  34. Cory Johnson

    Part 3 of Category Killers deals with a rarely-seen aspect of these seemingly unstoppable forces: their opponents and competition. The law of eminent domain gives smaller groups one more reason to protest the arrival of a large retailer, and environmental issues are increasingly becoming a concern to stores looking to level acres of land for building upon.

    It is interesting to note that while the growth of category killers remains on the rise, so does their opposition. It seems that the inevitable clash will stall either one or the other. One possible end to this battle is the fact that category killers are trying to improve their images like never before, especially given the grass-roots opposition which is constantly on the rise, and many are opening smaller stores or allowing more customization in existing stores. While these large chains are attempting to mimic some of the attractive qualities of smaller independent stores, it seems that their size will prevent them from ever equaling the personal feel of locations such as the “zoo” within a bookstore, Wild Rumpus, located in Minneapolis (p. 170).

  35. Koichi Tanaka

    Part II of Category Killers is a abridged history of the retailing industry in the modern age. Starting from scattered local shops selling general goods, then to clusters of local shops around Main Street and downtown areas, then to department stores that sold many things, then to the malls, the big-box retailers, and finally super centers. There seems to be a trend within all of these changes, in that there is a great movement towards locating all of the items into one convenient area, where shoppers will be able to buy everything in one stop. Starting with the movement of scattered local shops and peddlers towards Main Street and the downtown areas, the retail industry has always felt the need to move closer together and centralize the shopping experience, while taking advantage of the sales traffic. The shifts in the form of retailers have changed, yet their overall mission seems to be the same: centralize in clusters, and try to create as much sales traffic as possible. This is all a part of the natural progression of the retail market.

  36. Koichi Tanaka

    The third part of Category Killers focuses in more on the negative response received from communities and groups towards the big-box retailers. While the wealthier suburban and urban communities have tried to ban the entry of these retailers from their neighborhood, it is usually the neighboring poor need the services the most: “While many upscale suburban and urban communities have lined up against retailers and developers, there are also many communities – particularly in underserved, under-stored urban (read: minority) areas, that are welcoming big-box category killers with open arms”(p.143).

    I remembered reading an article about Kurt Cobain, the lead singer of Nirvana, and how he dealt with censorship from Wal-Mart. Nirvana’s music is catered very much towards the angst-filled teenage rage, where many of the songs are about withdrawal and rejection of social ideologies – basically some version of punk music. Therefore, everyone was surprised when Cobain agreed to changing the title of his song ‘Rape Me’ to ‘Waif Me’, since many expected the rock-star to spit it back into Wal-Mart’s face. Cobain explained that when he was younger, he came from a very poor logging town in the outskirts of Seattle, so when he was a kid, the only places where he could go get records were at Wal-Mart.

    I share this story with you because it highlights the fact that there are actually people who need these discounters very badly. In the circles of academia and the media, these big-box retailers are something to be studied, criticized, and picked at – to talk about how Wal-Mart is destroying the world and the social effects of mass discounting, etc.. However, considering how many people are benefitting from the company’s existence, I believe that that is a very one-sided bourgeois way of looking at the scenario.

  37. Small appliances necessary for all the efforts necessary for the work necessary for the house takes. I am also extremely efficient and cost-effective and instrumental in reducing fatigue and stress. Their small size, minimal power consumption and a reasonable price makes them an irresistible deal any time a new device on the market. While the house can be full of these places points conveniently located close to sale of electricity, making the workload easier.

  38. Rachel

    Part I of this book discusses the history of the growing trend of the “category killer” – big box chain stores capable of selling name-brand goods at lower prices due to low overhead costs and high negotiating power with suppliers, driving mom-and-pop operations out of business. These so-called “Colossal Competitors” make a habit out of transforming any available green space into a paved paradise for shoppers, often setting up shops right next to each other. For this, one can thank Charles Lazarus, the founder of Toys ‘R’ Us and the genius who coined the term “Category Killer.” With his business savvy he was able to build an empire on a simple concept: Become the largest retailer in children’s toys in order to have more bargaining power with manufacturers and therefore force any other major retailers (such as Macy’s) to either carry a large stock of toys all year round and lose shelf space and keep a high inventory, or reduce the amount of shelf space dedicated to toys in order to make room for more profitable items. Indeed, the majority of toys only sold around the Christmas holiday, and the rest of the year retailers struggled to move them off the shelves. Toys ‘R’ Us was able offer the widest selection year round at the lowest prices due its groundbreaking strategy, and so the choice for the competition was obvious.

    What surprised me about this first part of the book was the number of Category Killers mentioned that are in place in the Binghamton Area. As I read, I envisioned each of these major retailers in its respective area on the Vestal Parkway, in the Oakdale Mall, on Harry L. Drive and elsewhere. It was as though the author were speaking about MY home. This made me realize the truth to his words: These Category Killers had created an industry of such enormous size and power that they were even present in small cities such as Binghamton. Even though some of these stores, such as Toys ‘R’ Us, Office Max, and Montgomery Ward are no longer present (they failed just the way the book discussed), the impact of their presence is always tangible. One can hardly go anywhere in the Southern Tier without having access to a big-box retailer. It saddens me to think of the history of this area and how it was founded on mom-and-pop shops and small local businesses, such as Endicott-Johnson, that have inevitably been forced to close due to the power of these Category Killers.

  39. Markus

    Part I of “Category Killers” is subdivided into three parts. The author starts with a brief history of the retail business, moves on to describe what he deems the first category killer, and closes with brief profiles of the most eminent category killers in the US.
    Robert Spector lets us know that President Eisenhower’s highway program set off the rise of the retail industry in the US, because the new road system created a connection between people and newly created shopping centers.
    The author attributes the rise of the very first category killer, Toys R Us is, to two factors: TV, and the founding of Mattel. The manufacturer, the new retailer, and the new media outlet complemented each other, and reinvented the toy business. Whereas toys used to be a strictly seasonal sensation, almost exclusively sold around Christmas, the industry is now running all year round.
    Part I closes with profiles of the most important or most eminent representatives of category killers. This is done by industry

    Although the author mentioned Wal-Mart already a couple of times, and although Wal-Mart will become one of the focuses of this book, we are not given a profile of that company. Something else that was missing in the profiles themselves was a standardized structure. We learn about this and that, but do not have the same level of knowledge about the companies. Why is bookselling worth four and a half pages and home electronics less than one?
    In his introduction, Robert Spector describes the 1948 comedy “One Touch of Venus” as a possible inspiration to him. He states, if this movie were remade today, it would be set in a Wal-Mart, just like another movie called “One From the Heart”. It may be correct that Wal-Mart is a cultural icon. That may be true; however, it is also a very controversial icon. If any movie captures the post-modern ambiguity and criticism towards the retail industry, it is the original “Dawn of the Dead” from 1978. The movie was remade for modern sensibilities in 2004.

  40. Markus

    While part I introduced the reader to the business, its history, and the major competitors in the market, part II tries to explain why and how category killers dominate the retail industry. This part is the longest of the three parts of the book.
    Abandoning sales in favor of everyday low-pricing strategy comes at a cost. The convenience of earlier days is gone, and many tasks are passed down to the consumer. Private labels are replacing national brands, and the power of manufacturers is fading away even quicker.
    The rise of the category killers came at the expense of the owner-operated store, the department stores and eventually the shopping mall. This also meant the decline of a certain aspect of regional identity. Many observers expect Sears and Penney to merge within the foreseeable future.
    Looking for further ways to expand, category killers consider foreign countries, and new formats. The way is rough and full of setbacks, but even the category killers will fade away, if they do not find ways to sustain their growth.

    By calling part II “How and Why They Dominate”, the author is taking on a task worth of a Heracles. Robert Spector tries to analyze the dominance of the large chains in less than ninety pages, a task that is bound to fail. The author never goes into detail, analyzing what is beneath the surface, or behind the scene. I could not help but feel being paraded round in a Hollywood studio backlot.
    The author makes some blatant mistakes when addressing the cause and effects of everyday low pricing. On page 68, Robert Spector states that consumers’ demand for low prices depresses wages. I do not know of an industry where consumers demand high prices (except maybe for the iPeople; the cult that buys Apple products). Compensation on the job market is defined by supply and demand, by scarcity, and by meddling of the federal government. Anybody can shelf products at Wal-Mart, there is no economic incentive to pay a premium for such an activity.
    A huge part of these 83 pages deals in some way with Wal-Mart. Yet, I do never learn how the system Wal-Mart works. The reader never learns what defines the actual information system, or how Wal-Mart’s superior supply chain functions. We are only told, they are there, and they do a great job. But why? And how?
    On pages 133 and 134 the author touches on U.S. office-products firms’ expansions into Japan. He mentions the US firms were outmaneuvered by the local Japanese firm Askul, and that the company has proven itself to be a worthy adversary. Again, we never learn, why and how exactly.

  41. Markus

    The third and last part of the book covers the controversy surrounding the concept of the category killer, and the continuing evolution of the retail business.
    Whereas politicians often embrace the idea of a category killer establishing a store in their constituency, communities are frequently opposed to the idea. Often an unholy alliance between national chains and local politicians sparks the misuse of eminent domain, a legal measure originally intended to develop blighted areas. Businesses and people are driven from their property in best robber-baron fashion to make way for a new branch of category killers.
    Independent stores must find ways to adapt to the changing landscape or wither away. Further specialization seems to be a good recipe, and so seems being a true part of the community. An excellent example is the bookstore “Wild Rumpus”, which has animals running around in the store, and offers courses for children and parents. Such a course of action roots the store in the community.
    Like the category killers entered a changing landscape and ended up dominating the industry, new business ideas will rise and marginalize the today dominant category killer. This may happen by demographic and geographic changes, changes in consumer preferences, or – as was the highway system – by new technological developments.

    On page 175, Robert Spector chooses to quote Edmund Burke to introduce chapter 9: “You can never plan for the future by the past.” However, this is what the author does. Not exactly, though, but while these last pages should constitute a glimpse into the future shape of the retail industry, the author reports briefly on the latest developments. That is not an outlook into the future.
    We started the book with the highway system, and how it transformed America. Why not do something similar here? The author mentioned RFID. Why does he not think this development through to its logical conclusion? Why not take a look beyond the boundaries of the US? Why not look at the hypermodern parts of East Asia?
    The reader may have the benefit of hindsight, but to present Robert Nardelli as the savior of Home Depot was more than a little ironic. Robert Nardelli alienated everyone during his tenure, left the company under heavy dispute about his compensation package, and did not even improve the numbers effectively. His next stop in 2007 was Chrysler, and we all know where that will take him.
    The author’s most ludicrous prediction was that by 2010 there would be too few people to qualify for a position in a Wal-Mart, Toys R Us, or any comparable store. With almost 20% underemployment, shortage of labor is the very least of all the problems imaginable.

    Overall the book left me disappointed, and with the distinct feeling of not having gone beyond the surface anywhere. The author failed to provide the reader with a look behind the storefront of category killers. I do not recommend the book.

  42. Joseph Tabone

    Robert Spector begins Category Killers in Seattle where there is a familiar site of today’s category killers such as JC Penny and Toys ‘R’ Us. He explains the history of this region from 1850 to today and how the area has transformed, like many similar areas around the country have, into a place we have become so accustomed to. Toys ‘R’ Us was the first category killer to emerge onto the scene and fully take advantage of the discounting methods that are ever so popular today. Many other category killers soon followed such as Home Depot, Staples Wal-Mart, and others. They all understood the concept of buying in bulk, storing inventory right on the shelves, and using minimal décor in order to sell at the cheapest price possible. It was important to appeal to the customers needs, as they were more interested in the price than the look of the store (excluding category killers such as Starbucks and Barnes & Noble).
    One thing I found very interesting was the connection between many of the founders of the category killers. One example was how Charles Lazarus was also on the board of Wal-Mart. It seems that the same core group of people are responsible for shaping the retail industry to what it is today. While Spector briefly talks about the opposition to category killers, such as Wright Patman, he tends to talk mostly about the positives that they bring and fails to bring up the negatives. This is one thing I would like Spector to discuss more as the book progresses on.

  43. Brad Cramer

    The first third of Category Killers begins with a brief look at today’s (or 2005’s) retail landscape – a vast pavement expanse dotted with big box stores and chain restaurants. The author sets out to explain how and why we have arrived at this point. He explains how Mom and Pop establishments gave way to department stores in the early 20’s and how the Defense Highway Act of 1956 brought retail hubs to the suburbs (as Markus mentioned). The decentralization of the retail industry in America was immediately preceded by the rise of discount retailing, a no-frills approach to sales pioneered by Charles Lazarus and Children’s Supermart, the first category killer. The reader is then shown how discounting spread beyond toys to wholesale, home improvement, pet supplies, office supplies, and electronics industries.
    I found the author’s description of Starbucks to be the most interesting portion of the section. Unlike the other categories this one is eponymous and indicative of Starbucks peculiarity among the category killers. Starbucks has eschewed the impersonal nature of other chain retailers by emphasizing ambiance and atmosphere over low margins. By doing this they have popularized the notion of a coffee house as a “third place” between home and work. Furthermore, by choosing a large number of smaller locations, Starbucks appears less imposing within its communities and is often frequented (ironically) by demographics generally opposed to big box retail and other category killers. I find it interesting and impressive that a retailer can dominate and mold a category simultaneously.

  44. Arthur Kolomeysky

    Part I of Category Killers by Robert Spector starts off by giving a history of Parkway Supercenter and the Southcenter Mall, both of which are just south of Seattle, Washington. Spector explains how this once natural landscape transformed from farm land to a mecca of shopping. The combination of the interstate highway system, vast acreages of land, and low taxes encouraged department stores and category killers such as Toy R Us, Target, Barnes & Noble, Circuit City, Home Depot, Lowe’s, Bed Bath and Beyond, Office Depot, and many more to set up shop. He talks about this area south of Seattle because a similar chain of events has taken place in hundreds of places throughout America, and even the world. Spector then moves on to talk about some of the major category killers and gives a brief history about them. This is a good idea because it is probably important to know where they all came from to get a good understanding of what the rest of the book will talk about. It is in this section of Part I that, in my opinion, most of the interesting things were mentioned. One thing that struck me is the constant references to how Sam Walton (before WalMart was WalMart) tried to gather as much information as he could from the CEOs, founders, and leaders of the category killers that were already established. It is clear that he wasn’t necessarily the smartest founder of a category killer and clearly didn’t come up with too many new ideas, but he was clearly persistent in his desire to learn as much as he could and figured out a way to put it together in a very successful way. Another thing I found interesting was that Starbucks was grouped as a category killer, which it certainly is, but after talking about the size of both the stores and parking lots the other category killers require, as well as the way they are designed to look inside, it’s clear that Starbucks is certainly a different kind of category killer.

  45. Joseph Tabone

    Part II of Category Killers begins by discussing how the big players are trying to optimize operations and cut costs. Products are being imported from overseas in low-wage countries, such as China, in order to lower prices and beat the competition. Price optimization software is being used to make “minute-by-minute” price changes based on specific variables such as customer patterns and competitor prices. Even inventory is being made more efficient as Electronic Data Interchange enables manufacturers and retailers to accurately track products to the distribution center. All of this is leading to more power for the category killers and to the decline of department stores and subsequently malls, which rely on big department stores to anchor and draw in a large crowd. As these category killers defeat their competition they must continue to expand, or they too will decline, and they are looking international as a way to satiate that need. However, expanding overseas has brought new cultural challenges (as Starbucks figured out) that they must solve in order to sustain their growth.

    For the second part of Category Killers I am somewhat disappointed that Spector still does not go into details and just gives a general overview to the reader. Having a computer science background I was particularly interested on page 58-59 where he explains the “price optimization software” that retailers are employing but fails to mention how they work. He simply states that “Mathematical formulas and advanced algorithms are used to forecast how and when consumers will purchase items…” This is an extremely vague statement, as there exist countless of formulas and algorithms that try to mimic consumer behavior. One thing I found interesting, that has never crossed my mind, is that due to the hard times felt by department stores Spector believes J.C. Penney and Sears will eventually merge in order to combine the hard goods of Sears with the soft goods of J.C. Penney. I am definitely going to keep an eye on this as time progresses because if the two do merge, they could create another big player in the retail industry.

  46. Steven Blasch

    Part I of Category Killers begins by explaining how these giants rose to dominate their respective industries. Spector begins with a brief explanation of the evolution of mom-and-pop stores into discounters, and finally to giant, warehouse-like storefronts that are the Category Killers that we’ve come to shop at today. These ‘Killers’ stock very large amounts of inventory that they sell at very low prices. Spector attributes Charles Lazarus to being the pioneer of the Category Killer sector and describes how Toy’s ‘R’ Us rose to dominate the market. The second half of Part I involves a brief introduction and description of the present Category Killers and their respective industries. (Booksellers, Home Improvement, Office Supplies, Pet Supplies, Home Electronics, Coffee, and Warehouse Clubs)

    One interesting point that I recall reading in Part I was made on Page 42. Spector states that although Staples, Office Depot, and OfficeMax are the three dominant players in the office-supply industry, their combined market share is only 20%! One cause of this is the presence and competition of two other Category Killers: Costco and Sam’s Club, which Spector notes have been able to out compete the 3 specialized ‘Killers’ with profitable products such as printer paper and cartridges. This just demonstrates the amount of influence that these Warehouse Clubs have on so many industries because of their ability to out-compete virtually everyone else on prices. This same phenomenon is true with Wal-Mart in so many of the ‘Categories’ described in the book. It makes one curious about just how much power a company like Wal-Mart has on every American consumer, whether they show at Wal-Mart or not!

  47. Steven Blasch

    Part II begins to investigate the some of the reasons that Category Killers are able to dominate their respective industries. Spector describes some key parts of these companies’ strategies, the first being the obvious strategy of low prices. Clearly the company that can sell at the lowest prices, while still making a profit, will dominate the industry sales. One interesting point that Spector mentioned in this chapter, was the fact that Wal-Mart has more sales than all of the sales of Target, Sears, Kmart, J.C. Penny, Safeway, and Kroger combined. This fact is astonishing, and only further proves the point that I mentioned in my previous blog about Part I.

    Next, Spector talks about competition, and how department stores are presently being replaced by Category Killers. One reason for this involves the lack of customer loyalty to a particular store that existed in the past. Now, every customer will simply shop around until they find the lowest price. Additionally, Spector mentions the conundrum that Sears and J.C. Penny are in currently. It is obvious that these two companies must rethink their individual company vision and mission if they plan to stay in business for much longer.

    Finally, Spector writes about how the Category Killers are expanding nationally, as well as into foreign markets. One issue that is discussed regarding global expansion is the fact that these companies are running into previously established companies in foreign markets that are often better suited to cater to their local customer’s demands. This will be quite a challenge if the Category Killers are to succeed abroad.

    One very interesting quote that I recall from this section was on page 57: “The “Wal-Mart Effect” has exerted a tighter reign on inflation than a truckload of Alan Greenspans.” This quote is referencing the fact that companies like Wal-Mart are constantly keeping the prices of goods low for the average consumer, thereby preventing price inflation. This is just proof that actual market interactions are better suited, and perhaps more capable, to adjusting prices and interest rates in the economy than a government institution.

    Another point in Part II of the book, and perhaps the most interesting to me, was made on page 68. Here Spector mentions that the hourly wage for typical department sales associates in 2002 was $8.79. (which is equivalent to $18,280 yearly) Additionally, the poverty level at this time was $18,850 for a family of four. Compounding this issue further, Spector notes that one third of working Americans living in poverty are employed in the retail sector. He then rightly mentions that the consumers demanding ‘everyday low prices’ are partly responsible for depressed wages. Perhaps we need to think about some of the externalities of the operations of companies like Wal-Mart and many of these Category Killers. While there are a few exceptions, many of these stores do not pay their employees very good wages, or give them any further benefits; and there is rarely much opportunity for advancement. Additionally, there are other externalities besides poorly compensated employees that derive from these companies cutting costs. Some of these include environmental damage via careless cost-cutting procedures, savage attempts to wipe out competition in new market locations, and even misrepresentation of the goods that a company sells to its customers. All of these issues should be considered when a cheap item is bought from one of these Category Killers, just like the health implications of an individual should be considered each time one buys a fast-food cheeseburger.

  48. Rachel Daddezio

    Part II of Category Killers discusses the evolutions in the retail segment. Chapter 4 deals with the fact that price has become the factor on which most retail firms have chosen to compete; and in addition now that it has virtually become an almost completely universal practice, firms need to find other methods to gain market share. Take Best Buy, for example, that decided to cut employee commissions based on sales in order to provide the customer with a better shopping experience from always knowledgeable and helpful salespeople.
    Chapter 5 discusses at great length the history of shopping malls and centers, and how department stores are the “anchors” for these retail paradises, because they will bring in foot traffic. Over the years this has changed, and one sentence from this chapter really sums up what the author took two dozen pages to say, “Consumers tend to buy products at retailers that demonstrate a long-term commitment to the product, which means lots of inventory, sharp pricing, and the occasional knowledgeable salesperson. Department stores can no longer offer any of those selling points.”
    Chapter 6 talks about domestic growth and the different kinds of expansion that fall into this category, such as building “power centers” wherever space will allow or building smaller “lite” versions (as in Home Depot’s case) to tap into the urban and densely populated markets. The Dollar Store idea is also strongly catching on, especially with large firms like Wal-Mart and Target who are looking for even more ways to offer the lowest prices.

    Chapter 7 delves into international expansion and discusses the issues that go along with this. Various laws and regulations in each country can strongly influence what retailers can and cannot do, and in addition each retailer must consider the country’s population and buying habits. This makes one of the subtitles of the chapter “lost in translation” especially appropriate, because so many things done domestically simply cannot be copied abroad.

    The author suggested in Chapter 5 that a merger between Sears and JCPenney was probable. I found this interesting because the book was written in 2005 and now being in the year 2010 we can say that there indeed has not been a merger. While there is nothing wrong with making such inferences I don’t feel that the author adequately backed up his hypothesis; nor did I ever see any kind of news or hear any talk about this possibility, neither then nor now. I also found it hard to believe that JCPenney committed such a huge faux-pas when entering into the Japanese market as to not research the characteristics that home and bedding products needed to have. While to many people it may seem that there is no difference, a firm needs to do its homework before making such a huge investment into international markets. As a result of its lack of research JCPenney’s home products could not sell in the Japanese market.

    The second part of this book was great with providing numbers and statistics, but I felt that this aspect was the greatest flaw. One could easily find such numbers in various sources; so part II really should have focuses on what could be done to overcome the obstacles that are presented with expansion and competition. Perhaps part III will discuss this; I am looking forward to reading to find out what insights the author may have to offer since up to this point I do not feel like I am gaining anything from this book that I couldn’t find anywhere else.

  49. Ting Ju Chen

    As an international student, it is my first time to learn about this phrase “category killer”. The author, Spector, uses very clear points and different examples to present. It inspires me a lot and makes me learn the history and revolution about American retailers. Spector starts by introducing the main idea of a category killer. Category killer is a term used in marketing and strategic management to describe a product, service, brand, or company that has such a distinct sustainable competitive advantage that competing firms find it almost impossible to operate profitably in that industry. It is just like to “kill off” the existing competition with prices and product selection. Then, he explains the background and the birth of category killer. It is surprised me that Toys-R-Us created the template for category killers because Toys-R-Us at my hometown, Taiwan, are not big and not so famous. Toys-R-Us became the first category killer, presenting to consumers big-box stores with an emphasis on self service, big selection, low price and lots of parking and became one of few category killers to successfully expand into international markets.
    Then, Spector introduces various category killers in different fields, including bookselling, home improvement, office suppliers, pet supplies, home electronics, and warehouse clubs. Although the products categories were different, the approach was very much similar, opening store with huge size and low price products. And the most interesting thing is that Spector also includes Starbucks as sort of category killer. The size of individual store is not as big as other category killer, but the number of stores is ubiquitous everywhere. While reading, I found that each category killer has its own way and its own spirit to differentiate from others in industry. For example, the chairman of Starbucks popularized the idea of “Third place” and said that Starbucks is in the people business, serving coffee. The main point is that creating the cozy environment to serve customers is the success of Starbucks.
    After reading the first part of “Category Killers” and learning the history of these retailers, I am eager to continue delving into the book and learning more about retailer revolution.

  50. Ankita Manoth

    Robert Spector, starts the book by explaining the growth of retailers in downtown seattle, Washington. Then he talks about the background and history of some of the category killers like Wal-Mart, Toys”R”Us, Barnes and Noble, Lowes, Starbucks etc. He talks about how discounting has become so important in retailing business today and different strategies were being used to attract customers. Not only did these big retailers attract customers but also removed small stores out of business, by using large inventory selling at lower prices.
    So far this book has been a good source to provide information about how these retailers were born. I feel except Starbucks, all other retailers have similar strategy to grow, that is to provide products at as low price as possible. This is fascinating to know that Starbucks, which used completely different strategy, selling at high price and not having big stores instead having stores near by and still make so much profit.

  51. Rachel Daddezio

    Part III of Category Killers discussed legal, environmental, and social issues surrounding the tactics used by these big-box retailers. The focus on Eminent Domain in the first chapter of this part was especially rich in factual information and examples of legal cases, while in the other chapters there were a variety of environmental and social issues covered. Some of these included the “green” trend, hiring practices, and comparisons with local retailers.
    I appreciated the discussion of eminent domain because this is a topic that I had heard of but didn’t know much about. Reading the examples that the author provided was very useful to improving my comprehension on this subject. However, I felt that he did not dedicate as much time to discussing the social and environmental issues as he did to eminent domain. These issues to me are just as important and I would have been interested to read more. I also felt that the structure of this final part of the book was looser and less organized than the previous two sections, something that caused me to lose interest as I neared the end.
    This book was an easy read and at times provided me with some facts that were surprising or useful. But for the most part, the book did not teach me anything that I couldn’t learn on my own. I am unimpressed by this book and would not recommend it.

  52. Steven Blasch

    Part III of Category Killers touched on some of the techniques that today’s Category Killers are using to promote their agenda. Some examples that are given include the tax revenue leverage that Category Killers have when they enter a new town, and the use of Eminent Domain to forcibly take desired land from private owners. Spector also mentions a bit about the rising opposition to today’s Category Killers from both activist groups and also local governments. Finally, Spector talks about how the retail industry is constantly changing and mentions that even today’s giant Category Killers must be ever-adaptive in order to stay competitive in today’s industry.

    One interesting part that I recall from Part III is when Spector talks about the emerging small businesses that are able to stay profitable even against the Category Killers. Spector elaborates on the unique products, services, and business environments that these companies (like Wild Rumpus and Sullivan’s Hardware) create in order to draw customers to their products. It is clear that tomorrow’s retail business owners and entrepreneurs will need to be innovative and think of unique and legitimate ways to set their product apart from one being sold at a much cheaper price by a Category Killer.

    Overall, I felt that Category Killers was a good read. While it didn’t elaborate on many of the details, I would still recommend this book to an average person that is curious about the general trends in today’s retail industry.

  53. Lauren Hazucha

    The first part of Category Killers described the growth of main category killers, including Toys R Us, Barnes and Noble, Borders, Home Depot and PetsMart. The author begins by explaining the rise of discounters and the negative effect they had on mom and pop stores. He credits Charles Lazarus with revolutionizing the retail industry and developing the first category killer. Charles Lazarus utilized centralized buying and a computer inventory system, which was then used in future category killers. His idea of a big box store spread to other industries, such as home improvement, office supplies, pet supplies, bookselling, wholesale, and electronics.

    I found this reading very interesting and informative. I was surprised that Toys R Us was the first category killer. I also found it interesting how interconnected the founders of these category killers were. Charles Lazarus worked on the Wal-Mart board of directors, and many of them crossed paths throughout their careers. This is just another example of the importance of networking. It’s is also interesting to read about Sam Walton’s appointment with the founding director of the discounting industry’s first trade group, and the impact he had on people even before Wal-Mart. He was very prepared for that meeting, and Kurt Barnard knew even then that Sam Walton was one of the most extraordinary people he would ever meet.

  54. Brad Cramer

    The second part of Category Killers describes the growth of retail both domestically and internationally. The rise and fall of the department store was chronicled as well as the issues facing discount retailers as their search for opportunity overseas. Technological advancements from the advent of fixed prices at Bon Marche to digital inventory management at Sears are also discussed. Perhaps the author spends the most time illustrating the simultaneous success and failure of category killers abroad. Spector explains the importance of understanding new markets. Office Depot, for example, suffered in Japan because it failed to realize the nation’s penchant for smaller aisles, smaller stores, and two-ring binders.

    It was interesting to hear about foreign markets and their reaction to American industrial models. I was surprised to learn that native businesses have been fairing well against the category killers. It makes sense, as Spector said, how foreign chains have been monitoring their future competitors from abroad, assessing their strengths and adjusting accordingly. However, I do have one point of criticism about this section. The author discusses the decline of customer loyalty in an industry increasingly concerned with price. I would then like to hear about companies such as Apple and Wegman’s that survive on returning customers and brand loyalty. It would be interesting to see how the business models of these two organizations seem to balk this trend.

  55. Arthur Kolomeysky

    Part II of Category Killers by Robert Spector is called “How and Why They Dominate”. Things he talks about including Pricing, Competition, Growth, and Expansion. Pricing talks about how we live in an age where “everyday low prices” exist on almost everything. Spector explains techniques used to obtain these low prices such as relying on manufacturing goods in low income countries and retailers becoming smarter about how they price things by using computer software and data collection about customers and buying patterns. Also, retailers have become much better and organizing inventory which cuts costs significantly. The competition chapter focuses mostly on department stores and how category killers have been a major factor in their decline. Spector explains how department stores were once where everyone went to shop but that has since changed as category killers offer far greater prices and have much better models for making money. Department stores inability to adapt has meant the end of many of them and many of the ones left are struggling to define their brands. Also, department stores used to rely a lot on brand loyalty, which according to Spector, is a thing of the past. Part II continues by talking about Growth and how it is essential for category killers. It is essential if they want to keep up or stay ahead of their competition as well as the fact that Wall Street demands they have growth. Potential areas for growth are Power Centers, smaller store formats, and the dollar store category killer concept which is becoming very successful. Wal-Mart is now attempting to try out the small store concept in cities, which is completely out of the category killer’s usual domain of large stores in rural and suburban areas. The last chapter in Part II talks about expansion. This chapter gives brief examples of what some different category killers have done in their attempts to expand outside of their home countries and some obstacles, and successes, they have faced.
    The thing that struck me most about Part II is the part where Robert Spector was going into detail about the past, present, and future of department stores. It really shocks me how far they have fallen. It is interesting that he says that the department stores themselves are the biggest reason for their failures, not the competition they receive from category killers. The decisions that some of these retailers have made simply don’t make sense, and believing that the way they went about business would always be successful is foolish. It really is their own fault that they can no longer compete with category killers. I think it will be interesting to see what happens of these stores. It would be strange to see the demise of a company such as sears that has been around for so long, but it certainly seems possible if they don’t think of some new ways they can bring customers back into their stores.

  56. Lauren Hazucha

    Part II discuses how category killers dominate their industries. The author first mentions the importance of “everyday low prices”. Customers prefer to get low prices each time they shop, and this extends to the wealthy. Pricing has been greatly influenced by the internet, more specifically eBay and Amazon.com. In order to keep costs low, discounters and category killers need to control inventory and the goal is to eventually have “just in time” inventory. Other methods of keeping costs low include self-service and the use of private label brands. The author continues by discussing competition and the growth of these category killers. For Example, Wal-Mart tried to expand by operating Neighborhood Market Stores and dollar stores in order to attract more customers. When expanding into other countries it is important to research the market, because some category killers will not be successful in certain countries.

    I found it interesting how category killers often face difficulties in other markets, despite their successes in the US. Home Depot for example could not succeed in Germany because of competitors such as Hornbach. Ironically Hornbach studied Home Depot years earlier and copied the way they do business. It’s crucial to constantly innovate and adapt in order to stay ahead of competitors as illustrated by this example. Home Depot has been successful in Canada however, and learned to take into account how sales differ by region. This all makes sense, but I would have liked to see more examples of category killers expanding internationally.

  57. Lauren Hazucha

    Part III discusses how these category killers are able to open new stores, opposition they face and the changing retail industry. A few ways they are able to convince local governments to open new stores in their towns include tax incentives and eminent domain. These category killers are often met with opposition, especially from activist groups and local communities that greatly value their small businesses, and worry about the consequences of allowing them into their town. The retail industry is constantly changing and heading more towards open air formats and lifestyle centers. The author also discusses the Wal-Mart Effect, and how this retail giant greatly influences every retail store.

    I found the examples of eminent domain very surprising. I didn’t realize how often this occurs when a category killer opens a new store. I find it ridiculous how some big box retailers manipulate the situation in order to take land/businesses from people. There have been several law suits as a result, and one reason could be that “public use” is not clearly defined. It is also unbelievable how Wal-Mart “moves more groceries, dog food, toys, socks, gum, apparel,…diamonds, furniture, toothpaste…than any other retailer worldwide.” Wal-Mart is such an influential force in today’s society and it is impossible to ignore. I found Part III, as well as the rest of the book extremely informative and am glad we had to read it for our class. I wish the author could have gone into more detail on certain topics, but definitely learned valuable information about the retail industry.

  58. Scott Geiger

    Part I of Category Killers by Robert Spector defines what a “category killer” is, the history of the group and some key moments in that history. Spector begins with the department stores of the early 1900’s that dominated toy sales. He takes us to the beginnings of Toys “R” Us; the first category killer created by Charles Lazarus. From there he follows the growth of the discounter and legislation aimed to curb it; an echo of many modern legislative attempts to limit the influence of today’s category killers. Spector finally gives us a brief overview of several distinct groups of category killers; Bookselling, Home Improvement, Office Supplies, Pet Supplies, Home Electronics, Warehouse Clubs, and Starbucks (which is, in many ways, its own category).

    There were two items that struck me in reading. The first was the policy that Lazarus instituted regarding returned items; an no-questions-asked. He had learned early on that this was more effective, and in fact better for business. “The customer who raised his voice generally got his purchase taken back anyway”. I was also struck by how early Lazarus began using computerized systems, as early as the last 1970’s, to track sales and manage inventory. Both of these may seem almost common sense, but in many ways I think Lazarus was ahead of his time.

  59. Arthur Kolomeysky

    Part III of Category Killers by Robert Spector is called The Winds of Change for Category Killers. This Part focuses on the things that are facing category killers right now and what they might face in the future as they try to expand. Spector explains the backlash that some retailers are facing now from consumers, specifically Wal-Mart and Starbucks. He also goes into detail about “eminent domain”, which is the condemning and taking of private property by the government for public use and how category killers are teaming up with governments seeking increased tax revenues and using eminent domain to secure rights to develop new stores pretty much anywhere they want. Spector gives a few examples of category killers blatant attempts to take advantage this law and put out of business economically viable companies for their own gain. In conclusion of the book, Spector talks about the future of retail and category killers and how certain new stores are finding new and interesting ways to compete.

    In my opinion, this was the best of the three parts of the book. The other parts were interesting as far as learning where category killers came from and how they changed the entire retailing world. However, this chapter is more eye opening, especially the part about eminent domain. I’ve never been one to criticize the things that people hate category killers for (destroying mom-and-pop stores, paying low wages, etc.), but eminent domain is certainly something that shows that these companies have so much power that they are willing to take advantage of any law and use any means to get what they want. The examples of what Costco did were to obtain more floor space are pretty shocking. The fact that the government has gone as far as condemning perfectly viable businesses is also very shocking to me and shows how much people have given into the lure of these category killers. I also liked the concepts Spector mentioned about how to compete with category killers. He gives an example of a children’s book store and a hardware store. Personally, I think it would be great if we had more stores that gave a better shopping experience like these stores are doing, and I would certainly be willing to pay a little more for the goods in them in exchange for the better experience.

  60. Joseph Tabone

    The final part of Category Killers discusses eminent domain, which is “the condemning of private property by the government for public use…” and how local governments are abusing their power in order to give cheap real estate to category killers in exchange for a substantial increase in retail tax revenue. However, this misuse of eminent domain has been met with strong opposition as smaller businesses aren’t willing to take this lying down. In the court case of the city of Lancaster vs. 99 Cents Only, Judge Wilson argued that Lancaster’s only reason to condemn 99 Cents Only was to appease Costco and that such conduct is unconstitutional as it is being taken purely for private use. While certain cities are trying to appease and convince big retailers to build, others are vehemently against category killers trying to expand into their city. Spector specifically discusses how Wal-Mart and Starbucks have been met with extreme opposition. Lake Minnetonka, a town just west of Minneapolis, has billboards stating “Secede from Starbucks Nation” as Starbucks has come to symbolize commercialization and uniformity, which is exactly what this town is not. While the battle against big box retailers continues to wage on and mom-and-pop stores find their niche, category killers will continue to shape the future of the retail industry.
    For the third part of Category Killers I found it very interesting how local governments are abusing eminent domain in order to attract category killers. While the idea behind eminent domain is just, I believe it needs to be defined more clearly as the term “public use” can be extremely ambiguous and it has thus far allowed certain cities and towns to get away with unjust acts. I also found it interesting how certain category killers are replacing their entrepreneurial founders with professional managers. The idea here is that since these category killers are maturing, it is hard for them to grow and these professional managers can make the company more efficient and squeeze out higher profits. Overall, while the book fails to go into specific details, it is a good read in order to get a general understanding of the retail industry today.

  61. Brad Cramer

    The third and final section of Category Killers serves to frame the modern retail industry. As the romance of low prices wear off we are confronted with urban sprawl, cumbersome infrastructure, and political conflict. As a consequence of their size chain stores are increasingly threatened by small-scale innovation and the internet. In addition to this, wealthy communities such as Birmingham, Michigan, are reinventing Main Street by constructing city centers to serve the needs of consumers weary of retail ennui. Amidst this chaos, Wal-Mart, the proverbial 800lb Gorilla, is supplanting category killers like Toys-R-Us in an effort to dominate multiple markets. In his conclusion, the author presents the future the industry as speculative, with the public acting as “the final arbiters of retail.”

    My biggest criticism of the book is its assumption of perpetual retail growth. Spector suggests that 500,000 new positions in retail will be needed by 2010. Market turmoil in the latter half of the past decade has clearly invalidated this claim. The retail industry is arguably the hardest hit by recent events. Although I did not expect the author to foresee coming disasters, a discussion of retail’s dependence on macroeconomic factors may have depicted the future of the category killers more accurately.

  62. Craig Broccoli

    Robert Spector uses the first part of “Category Killers” to describe the historical backdrop for the Category Killers to grow from. From rural land outside of Seattle, Washington to a large urban hub, from small mom and pop retailers to super efficient warehouses and from department stores to a single category store, Spector gives a historical view on how category killers rose to power. There is a significant section devoted to Charles Lazarus, the creator of Toys “R” Us, and how he essentially created the templates for many category killers to follow by taking advantage of the growing demand for discounted merchandise. Part one goes on to highlight the creation of other category killers such as Home Depot, Office Depot, PETsMART, Barnes and Noble and many others. All of these category killers took advantage of the consumer culture in the mid to late 1900s with stores in rural areas, offering discounted goods, and selling exactly what the customer is looking for.

    The most interesting discussion in part 1 is about Starbucks. The name category killers usually implies large warehouse that encompasses 50,000 square feet or more and sells retail items pertaining to a specific market: home electronics, home goods, books, pet products, etc. Starbucks however is a small store, widely spread, coffee company that is dubbed a category killer for coffee cafes. The discussion about how Starbucks expanded as a local gourmet coffee shop under the direction of Howard Shultz by saturating one area at a time. Starbucks claims to be in the people business serving coffee and uses its stores as marketing tools to promote the company. Their idea of saturating one area at a time makes sense and it is intriguing to think why other companies such as small take-out restaurants and specialty goods stores haven’t used this model to become a small store version of a category killer. The best example of a company that has done something similar is Dunkin Donuts by having a bagel/donut/coffee shop in what seems like every town. I am waiting for a small scale pizza place or fresh fruit store (with all the healthy eating trends currently) to pop up everywhere.

  63. Craig Broccoli

    The second section of the book goes into detail about how each of these categories discussed in part 1 are so successful at what they do. One main reason why the category killers are so effective is their pricing. Robert Spector goes into detail about the variety of pricing schemes that allow the retailers to provide “everyday low prices,” such as inventory control, the impact of the internet, self service, standardized pricing, category management, brand extension and the extension of private label products. Chapter five goes into the rise and fall of the department store. During the 1980s the mergers began and department stores began to lose their grip on the consumers. Big box retailers won over customers as customer loyalty disappeared. Chapter 6 discusses the growth and chapter 7 discusses the expansion of category killers. In order for these large retailers to survive they must grow, become more agile (fit into spaces other than suburban sprawls) and expand into other markets overseas.

    The most interesting discussion Spector brings up in this section is the growth of category killers into the inner cities. This was an abrupt turnaround from their typical strategy of residing in rural or suburban areas. A move to the cities will certainly bring direct competition to the much smaller privately owned companies located in the cities. This move will also likely increase the cost of doing business. I am not sure if large scale category killers will be able to compete sufficiently in a tighter setting. The reason smaller, niche, and private retailers are in the cities is because that is what they are better at. Category Killers (excluding Starbucks) belong outside of the cities where they can run efficient stores with smooth distribution processes. It is interesting to note that the most successful big-box retailer, Wal-Mart, has decided to enter the NYC market with a small store concept. Only time will tell if this is a good idea.

  64. Craig Broccoli

    Part three of Category Killers goes into details about the current state of the retail industry and how there is growing competitiveness from independent retailers. Spector devotes a lot of discussion to eminent domain, where governments intervene on the behalf of the general public good by declaring who has the right to develop certain properties. Often the large retailers are granted rights to build over blighted lands, or, in some cases, potentially future dismal land. This would allow big companies to gain access to private land it would not typically have the ability to get, and will also provide the community with tax income to offset personal taxes. The section continues with how certain communities are battling back at large retailers, challenging eminent domain and promoting smaller, private retailers. The book closes with the future state of category killers and some keys to their future success. There is some discussion on the Wal-Mart effect, how Wal-Mart is forcing even the most niche market category killers to become even more efficient and smart about their businesses practices. The last section gives hints on how large retailers will have to continue to do as retailers have done in the past: meet the demands of the consumers.

    The section titled “Declaration of Independents” about how private retailers need to find specific ways to compete is very interesting. This section is key to the success of specialized stores and indicates why category killers will never completely wipe out small businesses. Not everyone will be satisfied by supercenters that provide low priced products. There are a few examples provided such as Beverly’s Pet Center which offers many different pet species that a consumer can’t find at PETsMART, and Pat Sullivan’s Hardware that decided to sell high end paint products that can’t be found at Home Depot. These businesses concentrate on niche markets that give them a competitive advantage over the larger category killers. My father’s company sells high end roofing and building material. Metro Roofing Supplies has two stores located in a very affluent area of Connecticut and Westchester County, NY where customers are more interested in service and high-end, quality roofing products. This niche market gives a small company such as Metro a way to outcompete companies such as Lowes and Home Depot on a specialized product grouping. This section is very important for all small, specialized retailers who want to stay competitive in a merger happy world. Bigger is not always better and concentrating on what a company does best is vital – appealing to customers’ tastes is essential. If customers want specialized service and product offerings, there exists a market to take advantage of and large, category killers will likely leave it alone.

  65. Zongxu Han

    the first part of the book, the author introduces the concept of a “category killer” and describes big box retailing as it exists today. It is the first time I learned this term although I have been to so many “category killer” stores. At the beginning, I wasn’t quite sure about whether I am getting the true concept. While reading further, I got the idea why it is called “category killer”.
    I remembered he used Toys “R” Us a lot in the book, especially in the first part. Because the company had a great control over its inventories, it had a great success in maintaining in the toy industry. Moreover, many department stores had to either match Toy “R” Us prices or move out of the toy industry. It actually “killed” other companies in the same industry, so it is called a category killer. And later Toys R Us moved into children clothes to cover a larger categories. This made me think of my home country, China. It seemed that we have a lot of category killers. but they are only in the local district, such as several cities, or within one province. They have very intensive competition among areas. Maybe this is the reason that Wal-Mart could not succeed in China.

  66. Ankita Manoth

    Part 2 talks about how and why they dominate. In chapter 4 the author talks about how price has become so important and what all things retailers were doing to keep there prices low and compete with other retailers. 5th chapter talks about the department store, how they were so important before and how and why they were becoming so less important later on. 6th chapter talks about the growth of category killers domestically. There growth in smaller formats in urban areas.7th chapter talks about category killers struggle to open stores internationally and the problems they had to face going international.

    I feel the overall overview was good, but it would have been better if it was bit more detailed. So far i liked the fact that retailers copy each other even internationally..lol..its a good strategy though. but at the same time i feel its not about copying each other, its just about learning things and as it is basically everything is so straight forward. “There are some basic things you need to do, to improve your profits” and everywhere retailer do more or less everything same.

  67. Ting Ju Chen

    The second part introduced the ways how category killers keep competitive and survive. All of these category killers share in common way to keep themselves competitive in terms of pricing, competition, growth, and expansion. Since consumers became used to compare shops either in person or on the internet until they find the best price, category killers need to cut down their costs to provide “everyday low price” through controlling inventory, self service, category management and so on. In order to fit in different location of market and to seek growth opportunity, they moved in the mall, opened smaller stores and expand oversea. Category killers take advantage of any opportunity to grow and survive or they will be killed, just like the first category killer, Toys “R” Us, is gradually replaced by Wal-Mart. I think the biggest concern for each category killer is how to take advantage of any opportunity to expand because the consumers’ shopping habits change all the time. For example, Wal-Mart plans to open smaller-size stores in New York City in order to earn the market in the urban district.

  68. Ting Ju Chen

    The third part of the book mentioned that the most important criteria in retail is location. While category killers find new location, some opponents argue with them over creating traffic and environmental problems, contributing to loss of small retailers and less community focused. However, some category killers indeed help town expand to increase tax and educate the market to both product and price. Some independent retailers keep competitive with category killer by differentiating themselves from products and service. And in response to “time-pressed consumers”, category killers began to develop small shopping concepts. To the extent that they adapt or reorganize, they will continue to be vital and survive.
    The section of this part draws my attention is that Spector described how the small independent retailer to be special in the niche market. For example, the small bookstore decorated the store like the world of children. They have some animals and a small an aquarium. They focused on the children market to compete with Barnes and Noble. In my opinion, it is the best way to keep competitive. In my hometown, although there are so many Starbucks along the streets, there are still many famous coffee bars which are decorated delicately and serve special coffee and pancakes. They are always crowded with customers and customers are willing to line up for couple of hours waiting. They differentiate themselves by excellent food, service, and cozy atmosphere to be much more attractive.
    Although this book did not talk about how category killers operate more deeply, it is still a good reading for me to understand the history and revolution of category killers in US.

  69. YiWei Ho

    In the first part of the book, the author introduced the background of how category killers started and later grew rapidly in the United States. Not only the numbers of the stores increased, but also different specific fields were joined into the market, e.g. bookselling, home improvement, office suppliers, home electronics, pet supplies, and warehouse clubs…etc. It gave the big picture of how retail industry was in the United States. The term “category killer” is totally new to me. I am not sure what this word means until I read the explanation in the introduction of the book. The “big-box” stores, specialized in specific areas like electronic appliances, toys or books, are so big and powerful. They cut down the price in the market and eventually “killed” other competitors then dominated the category, and this is how the name “category killers” came from.

    Although regional chains and general merchandise stores are prevalent in my hometown, Taiwan, category killers like Cosco and ikea could still be found. I personally enjoy shopping at Cosco and ikea, not only because they are huge, contains so many products, but also their prices were lower. Reading the first part of the book had reminded me my experiences goofing around in those big box stores, and I am expecting to read more about their revolutions in the rest of the book.

  70. Sean Ngai

    In Part 1 of Category Killers, Robert Spector begins by giving a brief overview of the change in landscape of Tukwila, Washington, as it shifted from natural farmland to acreages of blacktop and bricks and mortars. Spector attributes a great deal of this transformation to the Dwight D. Eisenhower System of Interstate and Defense Highways, which was responsible for the pavement of approximately 43,000 miles of roadway. For example, Interstate 5 and Interstate 405, which intersect each other in Tukwila, created a convergence of the region’s primary freeways and literally paved the way for the construction of the Southcenter Parkway and was a prime location for various category killers to set up locations there. Spector further explains that what happened in Tukwila is continuing to happen all over the world as category killers continue to expand their domains. Spector then continues to discuss the rise of Toys “R” Us and how the company utilized several discounting methods to rise to the top of the toy industry and become the first ever category killer. Spector concludes Part 1 by discussing a multitude of category killers from an array of various industries including bookselling, home improvement, office supplies, pet supplies, and home electronics.

    In reading Part 1, I was very interested learning about the degree to which Toys “R” Us has influenced every facet of the toy industry. More specifically, many manufacturers designed their products’ packaging based on the size of the Toys “R” Us store shelves, which was shocking to me. Toys “R” Us also influenced what toys would actually be manufactured. I can’t help but wonder if this degree of influence and power in Lazarus’ possession went to his head a bit. Lazarus served as a board of director for Sam Walton, who wanted to “dissect him at leisure.” Obviously, Walton wanted to gain Lazarus’ know-how and ultimately surpass his company as a category killer. Was Lazarus so convinced that no other company would ever sell more toys than Toys “R” Us?

  71. Ryan Gallo

    The first part of Category Killers, The Collossal Competitors, establishes the foundations of the modern retail market. Much of the initial focus of the first section of the book is on the growth of Toys “R” Us and Charles Lazerus, who used extremely large inventories to discount products and create the first category killer. The history of discounting is also discussed, including the political moves against discounting and the growth of Korvette’s, a popular membership store in the 1950s whose founder, Eugene Ferkauf, was dubbed by press “The Duke of Discounting”. The section concludes by summarizing the major category killers in many different industries, including bookselling, home improvement, and electronics.

    I found it interesting to read about how each of the category killers found their footing and established where they are today. Even though the practice of producing products specifically for Walmart has become well known recently, I found it interesting that it was previously practiced at Toys “R” Us. The fact that Toys “R” Us had the power to control manufacturer specifications, from packaging to testing, echoes methods that are widely looked down upon today. The section on Starbucks was also interesting, describing that they would rather spend money on new stores than advertising, letting stores advertise themselves.

  72. Sean Ngai

    In Part 2 of Category Killers, Spector discusses how and why certain retailers have grown to become the category killers they are today. A big portion of his discussion is about various techniques retailers used to achieve “everyday low prices.” Many have begun relying on other countries, the southern region of China in particular, for cheap goods. Retailers have also been keeping better track of their inventories with use of technology, more specifically the Electronic Data Interchange. Additionally, the implementation of self-checkout lanes has also helped retailers simultaneously cut labor costs and improve customer service. Spector then discusses how category killers have collectively contributed to the erosion of the department store business. In essence, customers nowadays browse several stores and only buy when they know they find the lowest prices. This contributed to the lack of customer loyalty to any particular store. Spector also describes another reason department stores are declining is because of the department stores themselves. Spector concludes the second part of his book with a discussion of the importance of growth and expansion for category killers. He talks about retailers’ attempts to expand domestically by introducing smaller store formats. Spector also discusses the challenges and successes U.S. retailers faced as they tried to expand internationally.

    In reading Part 2, I was interested learning about the past and present conditions of department stores. There is an excerpt from page 90 that particularly caught my attention: “[The department stores] also stopped being department stores. Gradually, over the years, they abdicated businesses to specialty stores, rather than compete head-on with the new entries into those classifications. As they kept shredding departments, they were department stores in name only.” I was puzzled as to why the department stores wouldn’t at least challenge the specialty stores.
    I think the department stores essentially conceded defeat by not even challenging the specialty stores and this explains why department stores today are as weak as they are.

  73. Chris Gaube

    In Part I of Robert Spector’s Category Killers, the author presents a historical picture of the retail industry by introducing its major players and how they rose to prominence. He begins his historical construct by likewise introducing the microcosm that has come to personify the term “category killer;” that being the city of Tukwila, Washington. Tukwila has staged what has become a commonplace development where massive retailers have created business models that are so sustainable and so profitable that it has driven most other big time players out of the market. Spector particularly credits Charles Lazarus, the founder of Toys R’ Us, for revolutionizing the term “category killer” and its related implications. In the same way that Lazarus revolutionized the way toys were to be sold, Barnes & Noble and Borders each did the same in the retail book industry. Spector goes on to mention the other dominant players in their perspective categories and how they were able to capitalize and triumph as killers in their categories. The list includes Home Depot and Lowes in the Home Improvement Industry, Staples and Office Depot in the Office Supplies category, PETsMart and PETCO in the Pet Supplies Industry, Circuit City and Best Buy in the Home Electronics category, Sam’s Club and Costco in the Membership Wholesale industry, and of course Starbucks in the Coffee industry.
    The more I read this section, the more I became captivated by the term that has come to reshape the entire retail industry. With so much invested interest in this industry as a result of my research into Walgreen’s for the capstone project, I could not help but compare many of these category killers to the chain drugstore giant. Where Walgreen’s separates themselves from the category killers is through store size and price. Sure their stores are ubiquitous across the nation and can be found within a mile radius of many of its competitors in the same way the category killers are, it has established competitive prices and quality products, but has not differentiated significantly enough to consider itself a category killer. If CVS and Walgreens were too merge, however, a chain drugstore category killer would be born.
    Additionally, I think Starbucks is unique in that it is not a “big box” retailer like a Home Depot or a Best Buy. To maximize its footprint and become a category killer, Starbucks needed to compensate for its lack of size (how big can a coffee shop really be?) by offering stores in almost every neighborhood of almost every major city. This saturation strategy is unique, and I cannot think of another firm who has duplicated such a strategy!

  74. Ankita Manoth

    The last part of the category killer talks about eminent domain, which means that government takes private properties for public use. Category killers attack a lot of private properties in the name of public use and government help them get those properties even when its not that important for public use, just because government get huge taxes from category killers. Category killers do it, because location has become very important in retailing today. Then spector talks about how the retail industry changes according to time and customers and provides knowledge that retailer have to change and differentiate themselves according to time otherwise they might loose.

    One thing interesting I found was eminent domain, which I had no idea about. Thinking that these big retailers use their power to destroy someone’s property creates a negative feeling about them. Like when Costco used eminent domain just to remove 99-cent store, and even government helped them showed how always power wins and little people always gets dominated. Even after knowing what these big retailers do, we always go to their store and shop instead of going to anywhere else.

  75. Sean Ngai

    In Part 3 of Category Killers, Spector discusses how category killers have employed aggressive expansions strategies in order to extend their reaches to rural, urban, and suburban areas. More specifically, Spector discusses eminent domain, which is the condemning and taking of private property by the government for public use. Essentially, the category killers use this strategy to their advantage and team up with the government in order to expand wherever they desire. However, many small, local, privately-owned businesses are unhappy with this concept, and Spector discusses several techniques these businesses use to combat eminent domain. Spector then concludes his discussion by addressing how the retail industry is changing today and how category killers must adapt to the ever-changing needs of the consumers in order to survive in the future.

    In reading Part 3, I was especially interesting learning about eminent domain. It was interesting reading about all of the discussion and controversy that go hand in hand with a new store opening. I would have to say I don’t entirely agree with the concept of eminent domain. I believe category killers are essentially using it as a bully tactic to get what they want. It seems, more often than not, that they are claiming certain areas to be “blighted” (even though they may not be), just so they can acquire the property and expand.

  76. Peter Coyle

    It was not always the case big-box that category killers dominated the American retail environment as they do today. Part I of Spector’s book discusses the beginnings of the “retail revolution” and introduces us to the major category killers. Charlie Lazerus was one of the first pioneers of the revolution. He opened the first giant toy warehouses, now known as Toys “R” Us, and was a runaway success. Although customer service was significantly less in these stores, the deeply discounted prices drove consumers from their traditional buying habits. But Toys “R” Us was just the beginning. Consumer culture continued to change as other category killers brought about major changes in categories ranging from books to coffee to consumer electronics.

    While reading through the third chapter, “Category Killers Everywhere,” Starbucks stood out as the most creative. The effect they have had on consumer culture is also the most profound, given that they essentially offer variations of a single product. They created a market for high-end, high-priced coffee where no market existed. The unique marketing of Starbucks as a lifestyle has captured consumers in ways that other category killers have not. It is quite impressive how Starbucks has remained dominant even though competitors like McDonalds undercut their price dramatically. In my mind, this proves the viability of smaller-store category killers with many locations.

  77. Scott Geiger

    In part II, Spector looks at the current state of the category killers. He looks at how low prices have changed how and what we buy. Spector discusses how the Internet has impacted our purchasing and the advent of self service. Controlling inventory is a key factor for the category killer. He then looks at competition among the category killers and uses the history of department stores as a starting point. He talks about the rise of the department store and the impact the category killers had on the department store. He follows mergers of department stores and the struggles they have in the current environment. The final chapters of the book look at the category killers attempts, successes and failures, in expanding into smaller urban stores and internationally.
    I found it interesting that Wal-Mart has not expanded into more countries internationally than they have. Their major presence is in Mexico and Canada. However, even with only a few countries they have made a large impact. I also found the history of the department store interesting; from their rise to power to their current troubles. I think that there is much that the category killers are repeating that and we may see a similar fate in the future for the category killers.

  78. YiWei Ho

    The second part of the book talks about what makes category killers persistent in the markets. Pricing strategy, competitions among markets, expansions- both international and domestically all contribute to the dominance of the category killers. Everyday low price is what attract most of the customers buying at the big box stores. To keep expanding customers, these stores have to come up with the ways to cut down the cost. Also, the changing shopping habits combine with the big- box stores had great impact on the department store industry. The comfortable shopping ambience is no longer considered necessary as long as the price is good. Specialty stores are preferred because customers could find the product they want without wandering through other departments. The whole environment is changing.

    I feel it is very important to culturally fit in the market while expanding internationally. Otherwise firms might face the situations like Office Depot and OfficeMax did. Ignoring the habits of the users, selling the wrong products eventually leads to the failure of the strategy. Expansion among international is imperative for category killers, and that cost a lot. I believe study and combine the local cultural is necessary.

  79. Chen Iu Chiang

    “Category Killers” started with the description of the changing landscape in the south of Seattle. What happened here was that big-box category killers came to dominate this area and altered consumers’ shopping behavior. Toys “R” Us was one of the pioneers of big-box retailer. Their centralized buying and computerized inventory management made them be able to give consumers varieties of selection combined with low prices. Today, the pattern of Toys “R” Us’ business is essential to every other category-killers who are everywhere, ranged from bookselling industry to home electronics.
    Within this very beginning part, I found that most of the contents are merely some general ideas which give readers a broad basic view of category killers. I feel that the most interesting part of these first three chapters is the discussion about the two main players PETsMART and PETCO in pet supplies industry. To differentiate themselves from other retailers, for instance Walmart, they sell not only the product but also the emotion. This approach reminds me of IKEA, who also tries to create an emotional connection with consumers. The inspiration coming from these “specialty” retailers is that the discounting war may choke you to death but the distinctive value you create would lead you to a new way.

  80. Donghai Mo

    After reading the category killers, I find that change and adaptation is the eternal theme in the history of retail industry, which is the retail Darwinism. From the mom-and-pop stores, to department stores, to regional shopping malls, and to category killers, and even to “power centers”, the success are always who addressed the changes more promptly and more effectively, the populating shift, the flavor change, government regulation alterations, and inner industry updated business model, and etc.
    At the beginning, consumers migrated to the suburbs from urban area in the 1970s; discounted stores took that opportunity by taking the advantages of low pricing freestanding sites away from high pricing shopping centers. When the aging empty-nest baby boomers return to the inner city, the old downtown centers come back again. Lifestyle centers and other small shopping concepts, another example, are being developed in response to “time-pressed consumers” who are buyers, not shoppers, who want to “drive up to the store, get what they need, and get out”. Category killers will have to find their place in the ever shifting landscape of retailing in the twenty-first century, which is influenced by changing demographics, migration, shopping malls, and community and consumer needs.
    I feel truely that the future of category killers not depends on what happens to them, but depends on how they response to these changes.

  81. Gizem

    When I first walked into a Toys’R’Us store as a kid, I had the feeling that this store was a revolution. Robert Spector describes that Lazarus, the founder of Toys’R’Us did in fact start a revolution and this was not just a revolution of my or any other kids’ lives. The new concept that Lazarus introduced, revolutionized every one’s buying experience, the whole retail business and even taxation and landscapes.

    Toys’R’Us was the first stand-alone store with huge parking lots offering a huge selection of products at below list prices. He was able to create huge profits by operating on low margins and creating quick inventory turnover. These new concepts soon became the model for the birth of new category killers which like Toys’R’Us, which not only dominated their categories and killed a lot of the competition, but changed every step of the category from the manufacturing stage until the product reached the consumers’ homes.

    With the enormous buying power that these category killers had, manufacturers had to adapt themselves to requirements of the stores. The stores now not only affected the inventory carried in their own stores but what the manufacturers produced. Moreover, competitors had to adopt to these changes because especially with the availability of the Internet, it was no longer possible to survive by offering the same products or even like products at higher prices. The fierceness of this competition can easily be seen through the fact that only a couple of players dominate a huge percentage of each category’s market share.

    While we hear much about category killers’ negative aspects in the media, Spector brings to light some of the positives. He mentions how these companies contributed to turning economically dead areas into centers of economic activity, how they made enormous contribution in terms of government taxes and more importantly how they democratized the consumer culture by “reducing prices and putting most products within reach of average consumers.”

  82. Dan Ryan

    In part one of Category Killer’s, Robert Spector defines a “category killer” as a store which strives to dominate a category by destroying all forms of competition. Those stores which are successful in this endeavor will be the sole retailers which come to mind when a category is mentioned. Whether it be coffee, books, or pet supplies, each category has a “killer” (or “killers”) which consumers associate it with. Spector goes on to discuss the rise of Toys R Us, which he claims “created the template for category killers.” This template, among other things, includes discounting, self service shopping, and large parking lots.

    The last element of the template described above – large parking lots – is one of the key ingredients which spawned the retail revolution of the mid-twentieth century. That, and the interstate highway system. Category killers, in order to succeed, needed large stores in areas where it was cheap to develop. In addition, they needed consumers who lived outside of the immediate area to have the ability to travel to their store. Parking lots and highways allowed for both of these.

  83. Peter Coyle

    Part II of Spector’s book examines how and why category killers dominate the way that they do. Spector identifies four major aspects of all category killers that he determines are the reasons for their dominance. First, category killers have become experts in pricing. They do not stop at achieving the lowest price through market power over suppliers and super efficient supply chains. Category killers creatively maximize their profits through complex inventory management and studying consumer buying patterns. The second section, competition, explains how category killers have picked apart the traditional department store concept. Lastly, Spector discusses how category killers need to maintain growth to survive. This includes finding creative ways to enter new markets domestically and expanding internationally.

    I think that the internet has been overlooked as a major threat to many of the category killers discussed in this book. Spector mentions how many category killers are using the internet to reach new customers. However, online sales offer a completely different value proposition to customers that I believe big-box retailers will have trouble competing with. This is especially true for retailers of items that are non-perishable and not unique, such as books and consumer electronics. As internet retailers become as adept at managing their inventory as category killers I expect them to be able to slash prices lower than physical retailers and pull customers away in droves.

  84. Chris Gaube

    In Part II of Robert Spector’s Category Killers, the author begins to look to the reasons as to how and why specific category killers come to dominate their industries. At the outset of this portion, Spector examines the strategy of pricing. Here, the author extrapolates on the idea of pricing and how big box retailers and discounters have reshaped the retail playing field. He goes on to acknowledge the shift in paradigm among the average consumer; rather than the previous approach where consumers had brand loyalty to their persepective retailer of choice, today the consumer is strictly concerned with acquiring the most convenient items at the lowest price period. Much of this has been exacerbated by the entrance of advanced technology in to the retail landscape, such as advanced information systems practices like Electronic Data Interchange (EDI), RFID, and of course E-Commerce and the Internet.
    In the subsequent section of Part II Spector goes on to explain the effects that the intense competition has had on department stores and why more specifically they are being replaced and wiped out by category killers. He talks about shopping centers and their recent decline in significance across the retail spectrum. Today, Category Killers are capitalizing on some of the minor inconveniences of shopping centers and department stores like having to navigate through stores or departments. The competitive advantage presented by category killers like Best Buy, Target and of course Wal-Mart is the in and out, convenient shopping methods that new aged customers are utilizing. Today customers are concerned with making their purchases at cheap prices with minimal effort or stress. As a result department stores are struggling to keep up, and may have to toy with merging before they are completely dismissed from the retail landscape; Spector predicts the marriage of Sears and J.C. Penney to take place to combat these aforementioned challenges.
    In the remaining two chapters of Part II, Spector investigates the growth and expansion in to new markets executed by certain category killers and the challenges and implications thereof. With the shrinking influence of traditional department stores and their desperate consolidations to stay afloat in the industry, many big box retailers are faced with the challenge of growing to keep pace, while also staying critical of their growth strategies so they do not overgrow the industry the way department stores did. Consequently growth is coming in unexpected ways like expanding to urban areas, or condensing the size of new store formats, or even creating smaller specialty stores within the category umbrella. Likewise, expansion abroad is a hot topic in big box retailing. Some have seen it as essential, others have been myopic or shortsighted of such potential, while others have remained critical of its many challenges. Wal-Mart has effectively expanded to many markets including Mexico, while Starbucks has expanded exponentially as well while struggling to keep their otherwise sterling footprint visible in Japan. Starbucks’ failures in Japan are interesting to note. They failed to examine existing competition. Be it that the best practices for dominant retailers is no longer a secret, it is interesting that Starbucks was beat at their own game in this geographical area. It is almost as though they are too good or too big that they cannot even keep up with themselves, and as a result others are exploiting their success!

  85. Zachary Rubenfeld

    Robert Spector’s introduction to his book, Category Killers, begins with a general assessment of the current American retail landscape, broadly discussing the radical transformations in the retailing industry that have fashioned new customer attitudes and behaviors, as well as innovative business models and competitive strategies. Before getting into the histories and developments of such category killers as Toys ‘R’ Us, Barnes & Noble, and Home Depot, Spector carefully contextualizes his later insights, emphasizing how the “big-box” retail stores of today are viewed as both a “blessing and a curse” by members of the American public. Spector describes this viewpoint of “big-box” retailing as a double-edged sword to ensure that his readers recognize how the “category killer” business model is a “disruptive,” concept in retailing that provides opportunities and challenges to the average American consumer and businessman. On one hand, category killers, such as Home Depot, provide extremely low prices, along with wide and deep inventories, making the retail shopping experience quick, affordable, and convenient. On the other hand, many individuals perceive these “big-box” retailers as giant corporate axioms of evil that solely strive to dominate categories and eliminate competition at all costs. Spector’s Category Killers does not serve as a proponent of big company chain activities, but rather as an analytical assessment of how “retail and consumer culture are always evolving.”
    In the first part of his book, Robert Spector provides a historical blueprint for how big-box category killers came to dominate the American retail landscape and radically transform consumer lifestyles, habits, and preferences. To construct the historical road-map of the disruptive and revolutionary retail concept, Spector begins by discussing how Charles Lazarus challenged the traditional department store template by constructing his Toys ‘R’ Us business model. Offering customers low prices, wide selections, and a location to find the hottest new products advertised on television, Lazarus pioneered the concept of having everything under one giant roof. With Toys ‘R’ Us, and other big-box retailers, the American customer began witnessing the birth of an innovative self-service model that simultaneously minimized the importance of knowledgeable employees and allowed customers to pull merchandise off the shelves. Spector continues Part I by elaborating on the historical developments of Home Depot and Lowes, Barnes & Noble and Borders, Petco and Petsmart, and Best Buy and Circuit City. With each example, Spector illustrates how centralized buying practices, computerized inventory management, promotions, and other innovative resources and methodologies assisted in radically transforming the customer from an individual driven by brand loyalty into a consumer whose purchasing decisions were ultimately shaped by price.
    It is very interesting that Spector utilizes the term, “democratization,” to describe the transformations that took place in consumer culture as a result of big-box retailing. As mentioned earlier, many individuals view category killers, such as Toys ‘R’ Us, as an opportunistic corporate giant that promotes its own self-interests without considering the detrimental impact its competitive activities have on smaller store operations. Throughout the 19th and 20th centuries, Congress has heavily debated the issue, introducing such bills as the 1938 “chain death sentence bill,” which proposed a series of taxes on chain stores to hamper growth and contain certain competitive advantages not easily enjoyed by mom-and-pop operations. Although innovative business strategists, such as Charles Lazarus, assisted in “democratizing,” the customer experience, “reducing prices and putting most products within reach of the average consumer,” the same individuals crippled smaller store operations’ ability to earn a profit. The customer then and now may enjoy the benefits afforded by convenience and discount retailing, however many specialty store and department store owners cannot turn a profit with even the highest quality products and product knowledge. Spector’s chapter’s closing comment mainly acknowledges the liberation of the consumer experience and fails to address the general distaste among smaller retail stores for big business.

  86. Donghai Mo

    In the book, Robert Spector defines the category killers as the most disruptive concept in the retailing—and in everything that retailing touches. (Spector, 2005) The category killers’ goal is to dominate the category and kill the competition—whether it be mom-and-pop stores, smaller regional chains, or general merchandise stores that can’t compete on price and/or selection. (Spector, 2005)

    Spector divides the book into three parts, the origin and the development, the underlying reasons, and the changing landscaping of the retail industry, which requires the evolution of the category killers.

    In the first part, The Colossal Competitor, Spector describes the appearance of the category killers: self-service, big selection, low prices, lots of parking, piles of products beside the wide aisle, and etc. giving the general feeling about this kind of retailers. The father of category killers, Charles Lazarus introduced the idea of Toys “R” us when TV was popular and toy manufactories arrived, setting up a good example for the followers, for example, Home Depot. Pile it high and sell it cheap. (Spector, 2005) Then Spector talks about several category killers in people’s daily life, Home Depot, Staples, Starbucks, etc.

    In the second part, Spector explains “how and why these retailers have come to dominate their categories”, including pricing, competition, growth, and expansion. By making products in low wage countries, controlling inventory, self service and private labels, proprietary brands and Exclusives, category killers using low price to drive mom-and-pop stores and department stores out of scene. In response to increasingly competition and shrinking retail market in domestic, expansion aboard becomes a more attractive but a more complex move ahead of category killers who want to survive and keep their position in the market.

    In the third part, Spector describes the ever-changing landscape in which category killers operate requires the change and evolve of them. Future development of category killers is faced with many challenges, such as strict ordinances, anti-sprawl activists, competing independent retailers, and short of labors. Also some new concepts of retail come out, for example, the hybrid center and lifestyle centers. Therefore, category killers are not ensured of another bright tomorrow. To the extent that they adapt or tweak or fine tool or reorganize they will continue to be vital and important to the consuming public. (Spector, 2005)

  87. Scott Geiger

    The final section of “Category Killers” looks at how malls are struggling to survive and re-invent themselves by adding category killers into the mix. A brief discussion on taxes is presented, as well as the still-undecided state of Internet taxation. The issue and use, or mis-use, of eminent domain is highlighted in the re-invention of the malls. Not only are retailers competing against each other, but communities are competing against other communities for the tax revenue from malls and big box stores. Spector raises the point that enticing a mall into a community is not pure profit, a host of additional costs to the community are added. He goes on to look at the independent retailers and how they are surviving and what they must do; they must specialize more than the specialty stores to compete.
    Spector’s look at the independents and how they are competing was insightful. The example of the small bookstore, Wild Rumpus, that is competing against Barnes and Nobles successfully was a good example of what independents must do and how they must think. Wild Rumpus has done things that Barnes and Nobels cannot and that allows them to be unique in a “sea of sameness”. I think these examples give us some insight into the future; we will see more very unique and specialized independents.
    Although, I have read articles on the subversion and mis-use of eminent domain previously, however it still amazes and angers me that this happens. Today, as so many local governments are struggling to maintain services with less and less tax revenue I fear we may see more of this happen. Spector made a good point when he added that although many communities are attracted to the tax revenue the malls can generate they often forget the additional burden and costs associated with them.

  88. YiWei Ho

    The last part of the books discussed a more dark side of the category killers industry. It talks about the opportunism between government and category killers by using eminent domain. Government which needs taxes badly gives the best location to big-box stores via eminent domain. Because these category killers could bring in abundance of money, and the taxes they paid helps relieved government deficit. Although this kind of cooperation aroused oppositions for big-box stores, these big parties usually get what they want. To compete with those category killers, differentiation is inevitable. To do something different and not to insist on the low price, which small stores would never out competed with category killers, enable small stores to position themselves in the market with competitive edges, just like the books stores and the internet industry examples mentioned in the book.
    The author furthered discussed the future of the category killers. In such a fast-changing world, whether the time of these big-box stores last to the next decades depends on their adaption to the environment. As consumer behaviors vary, these category killers have to leverage the cost and gain of the changes to always be under the spot light.

    I think that how to change the firm into a more efficient system while not hurting the existed culture is very difficult, as these changes are urgent and necessary. These adjustments could become challenges for category killers; though they have been dominated the markets for years. In my opinion, category killers are still growing and playing an important role among modern people’s shopping habit. However, for the future, I am not so sure. Perhaps one day, when people get tired of these warehouse-like shopping spaces, the more delicated and unique stores might take the role of category killers.

  89. Ryan Gallo

    The second section of Category Killers, How and Why They Dominate, deals with the methods that category killers use in order to maintain supremacy. Many aspects of how prices are controlled are detailed, including understanding buying patterns, using the Internet, controlling inventory, using self-checkout registers, and brand extension. The rise and fall of department stores is also discussed, including the ways that Category Killers are taking advantage of this downfall. Also discussed are category killers’ methods of expansion, and the many problems they face when trying to open stores globally. Spector specifies many of the specific issues facing the home improvement industry, the consumer electronics industry, and the office product industry when opening abroad.
    I found the way that category killers are capitalizing on the downfall of department stores interesting, along with many of the last resorts that department stores are using to attempt to stay in business. Spector seems to describe Sears as the most desperate, describing the many products they offer, but never fully succeed at. It seems as though the only purpose of department stores at this point is their use as large apparel stores in shopping malls, though that may also die out if category killers and discount chains continue to create mall-friendly stores.

  90. Scott Einhorn

    The first part of this book deals with the birth of category killers. I have grown up accustomed to shopping at these so called category killers because they truly are the best place to find things that you are looking for. When you are in a rush and need a specific type of resume paper, are you going to go to a neighborhood stationary store and spend an arm and a leg or just go to Staples and get the same paper for half the price. 100 percent of the time I am going to Staples. The first part of the book takes us through a detailed path to the creation of category killers. With department stores dominating the market in the early 1900’s they were the place to shop for everything especially when they introduced toys. However, once Charles Lazarus returned home from war he changed the retail industry. Lazarus took over his father’s store and once he realized that furniture doesn’t wear out he started to sell toys. There are three main points that helped Lazarus create Toys R Us. The first was the 2/3 of all Americans had TVs in their homes and most advertisements were catered to kids’ toys. The next was the creation of Matel, which was the first brand name toy company to hit the market. Finally the third was the creation of the Barbie doll which of course every girl wanted. Lazarus changed the toy industry from a 6 week industry to a year long industry and he changed the way companies would market to consumers. He paved the path for category killers in the home improvement industry, home electronic industry, pet supplies, and office supplies industry.
    However despite the fact that Lazarus changed the way the retail industry operates I truly think that if it wasn’t for him someone definitely would have started selling to a specific audience.

  91. Donghai Mo

    Spector describes the Darwinism in the retail world, origin, development, expansion, and backlash and uncertain future through the whole book. The appearance of Toys”R”Us influences the retail industry and nurtures the idea of category killers, which influence the customers’ lifestyle. On the other hand, demographic and lifestyle changes of customers influence the category killers. Furthermore, the interactions among the category killers influence other members in each sector. Spector mentions the Wal-Mart effect on each consumer and in every sector, which cannot be neglected. The response to these influences decides the future of the retailer. It is not what happens to you that matters, it is how you response to it.(McGregor,2009)

    This book, touching the shopping and talking about retail history in US, is interesting and helpful to a foreign student pursuing study in US to know more about the customer culture and the daily life here. Spector provides a context, in an historical frame-of-reference, within which describes a process of natural selection in the retail industry. He helps me, an international student, understand how category killers such as Toys “R” Us, Barnes & Noble, Home Depot, Staples, Office Depot, Best Buy, Wal-Mart, and so on established, evolved and sustained dominance in the past and currently. Also the book provides perspective that nothing can be kept permanent in business. The players have to response promptly and wisely. Third, industry analysis, competitive strategy options and strategies for expanding business overseas in this book are helpful, especially for a student who studies overseas and holds an idea of running business internationally.

  92. Peter Coyle

    The third section of “Category Killers” discusses some of the opposition forces to large retailers and changes facing the retail industry. Opposition to large big-box stores comes from a multitude of sources and concerns a number of issues ranging from fair wages and environmental impacts to the use of eminent domain for private gain and loss of community character. Spector addresses the claim that category killers stamp out mom-and-pop stores by asserting that such small stores need to be innovative and “do something special.” Spector also addresses the Walmart Effect, how Walmart can and will expand its reach into new categories and profoundly impact all those related to that category, from suppliers to other retailers. Spector concludes by stressing that just as category killers have changed consumer culture, they must be aware of how that culture can continue to evolve and what the possible effects will be.

    Spector mentions that in Seattle, Starbucks has become an “all-purpose target for the evils in the world.” Big-box retailers will always have a difficult time persuading people they are an ethical company. Furthermore, the bigger the company, the more vocal the opposition is likely to be. Still, it is possible for large chains to present themselves as ethical and hence not be seen as evil. Although not category killers, Wegmans and Whole Foods are examples of big-box retailers that have, for the most part, managed to avoid the ire of activists by incorporating strong ethical principles into their core values and strategy. The question that other large retailers must ask themselves is; to what extent can they allow ethical issues to affect their strategy and how will that effect profitability?

  93. Christopher Ng

    The first section of Category Killers serves to introduce readers to the retail industry and provide some history on how retailers became the giants that they are today. Particular focus fell on Charles Lazarus and how he built Toys R Us. It was the first major success story of a focused retailer rising and gaining a stranglehold on a specific market, making it a “category killer” (in this case the children’s toy industry). Success came from Lazarus’s ability to identify growth opportunities and capitalize on them by revolutionizing the way customers shop from self pick-up items, centralized check-out, and specific joint advertising (television and partnering with Disney).

    I find it interesting how so many others from other industries looked to Lazarus for guidance at one point and almost all of which have surpassed his success at this point (Toys R Us is not currently faring too well). How one who was on top and ahead of the league loses that is an interesting process. The book mentioned from Marcus and Blank (Home Depot) that expansion can’t “outgrow the ability of the people to take you to the next level”. They got that idea from Lazarus, but it seems that Lazarus was unable to find those people that the other retailers found to continue his growth.

  94. Scott Einhorn

    In the second part of this book I truly understand the power of category killers. Spector explains “How and Why They Dominate” going into detail by talking about the history of pricing, competition from department stores, and then finishes off the second part by talking about the growth of these big box retailers both nationally and internationally. Chapter 4 shows us how these category killers are able to maintain low prices by using private label brands, inventory control, and the use of internet. Chapter 5 talks about how department stores, once the key to success in retailing was falling out of favor with the general public due to these category killers. Spector then goes into talking about the expansion of these retailers by entering new markets such as “power centers,” smaller store formats, and establishing stores in inner cities. Concluding the second part of this book Spector talks about how these retailers are trying to expand globally.
    I guess growing up as a child I never truly realized what category killers were because those are the places we always shopped at. If I wanted a new video game I would go to Best Buy, if my dad needed to fix the house, he would go to Home Depot, and if we needed an ink cartridge we would go to Staples. However after reading part 2 and seeing how people used to go to department stores for everything I can understand how these category killers hurt small chain retailers and mom and pop shops. Despite that fact, life is a competitive environment and if one place is able to make the same product as someone else at a lower price, then why wouldn’t they. Honestly, if there weren’t these so called category killers today I feel like my life would be a lot slower. I am always running around and if I wasn’t able to just run in and out of a store in 3 minutes I feel like I wouldn’t be able to get half the amount of stuff done.
    A perfect example of how category killers is expanding is seen in the state of Florida. On every corner driving around you will see the Publix Supermarket and I mean every corner. There are about 1 Publix every 2 miles. The reason for this is not because each of them are very profitable, but because they don’t want competitors coming in and stealing their business. Besides a few Albertsons and Wal-Mart Supercenters, Publix is the main supermarket in Florida because they have been able to keep the competition from entering their market.

  95. Chris Gaube

    In Part III of Robert Spector’s Category Killers, the author explores some of the stiff oppositional forces challenging big box retailers and category killers. Spector articulates the cross section of activists resisting and confronting such category killers. The overarching sentiment is to keep them “out” or at least “severely restrict” their ubiquitous presence. Spector examines the topic of eminent domain, listing several examples of where state, county and municipality governments are claiming areas as “blighted” and taking them over to resell for tax value. Category Killer’s are capitalizing on these real estate gold mines consequently upsetting the once even playing field of free enterprise. As a result, a growing backlash has been born, calling these governments and companies to take more accountability for their business and real estate actions.
    Creative and thriving independent retailers are using their differentiation strategies to combat big box retailers. Often they find ways to offer superior product quality and/or expertise to compete and stay abreast in their respective industries. Consumers are growing more and more aware of the agendas of category killers and are growing emotionally distant in some places, deciding to capture the community feel that many independent local retailers are offering. As a result, big box retailers are attempting to contribute more and more in the communities they serve.
    What the future has in store for category killers like Home Depot and Starbucks is no longer a certainty. Exurbs or suburbs of suburbs are becoming more realistic urbanizing districts for retailers. Also, category killers are abandoning their previous sites and building newer, larger stores to continue to assure growth and expansion.
    Lifestyle Centers have been born and pose a threat on big box retailing. The author says, “They combine that quick-and-dirty in and out shopping experience with a little bit of main street” (180). Spector goes on to talk about the “Wal-Mart Effect” where the retail giant is exercising dominance and buying power in every area of its business, and no one can even scratch the surface of keeping up. Spector closes his narrative by explaining the hierarchical shift in big box retailing where many founders and CEO’s are growing old and retiring; as a consequence, new managers with ulterior agendas are taking over category killers like Home Depot where the highest profile executive managerial change has taken place. Robert L. Nardelli has taken over there as CEO, and has done much to shake up the strategy of that firm, specifically centralizing decision making and shattering the autonomous leadership principles that have grown the firm to its current state. The overarching sentiment in all of these companies is that what has gotten them there, is not necessarily what will take them to the next level, and hence CEO’s and business leaders need to adapt and make adjustments so they aren’t left standing still the way shopping malls and department centers have done in the past.
    When looking ahead it seems difficult to imagine category killers growing any larger. At some point one would presume they will reach their peaks. Of course other channels like the internet may challenge this dominance, but most companies are using the internet to their advantage. It is most likely that at some point in the near or distant future what we have come to know as the ‘department store’ will vanish from existence. Competition will become more and more difficult until some other phenomenon ensues…whatever that may be!

  96. Christopher Ng

    The second part of “Category Killers” describes the methods used by category killers to acquire and hold their positions in the market. The first point mentioned was the ability for category killers to take advantage of pricing. Larger chains have access to economies of scale that smaller firms can’t compare to, so smaller firms can never compete in that sense. They have to focus on other points like customer service to differentiate themselves and add non-monetary value. Spector then went on to describe how the fall of department stores cleared the path for category killers (discount retailers in particular). He talked about how department stores slowly lost their identity over time and how in the end, many will disappear from either losing to or merging with competition. The third aspect was the way category killers have diversified their growth both domestically and internationally. Domestically, these category killers which are used to large single-floor store formats have had to adjust to multi-leveled smaller spaces in urban areas. This allows them to tap into huge markets of concentrated potential customers. They have also done research and expanded into less than obvious towns with relatively low populations, but interests that coincide with what the retailer sells. Internationally, retailers have had mixed results, but the obstacles and methods remain similar. Almost always international expansion involves joint ventures with native retailers offering similar products. And almost always competition comes in the form of emulation (or local competition following them). And further still, some retailers failed to properly adjust to different cultures. Not everything worked like it did in America. But Spector did note that international expansion was not only inevitable but also necessary as the domestic market becomes over saturated.

    I found it a shame how spot-on this section of the book was. Being born in the late 80’s, I can relate to many of these changes described in the book. I personally remember going to malls and having a genuinely good time. They were beyond a shopping center, it was a social experience. But with the rise of e-shopping, category killers, and just preference changes of the populace, malls are a dying breed. Likewise I remember when I was able to explore my hometown of New York City and not see many category killers. It was always a melting pot of smaller stores offering such different experiences. Now even in a city we have Targets, Best Buys, and Home Depots. There is no avoiding it and I foresee the problem only growing with time. On the other hand, there is a certain level of comfort to be found when you go to foreign places and see a recognizable native logo. I gravitate toward it despite my general avoidance of it at home. Perhaps it is not an issue with the category killers themselves, but how space is limited and for category killers to grow (which they inevitably will), cherished smaller stores must go. I can only imagine how other places must feel to see local stores replaced by foreign category killers.

  97. Christopher Ng

    The final section of “Category Killers” looked at the opposition and future of category killers. The opposition against category killers focused on Wal-Mart as an example (it is the largest of them all and the biggest target). Spector talked about government policy like “eminent domain” which was abused by corporations to essentially deem target properties as a “blight” (currently being underutilized, unsafe, etc.) for the public and replace said properties with a new site for a category killer to expand. The problem is that a blight could be loosely defined so corporations could twist the perspective and get any property as long as they had the resources to allow it (which every category killer did). Spector then moved on to describe the general opposition of how category killers destroy culture and smaller mom and pop stores. It was mentioned that for smaller stores to survive, they must truly specialize in something that category killers cannot emulate and become involved with their communities. The final part of the book looked at the future of category killers. It touched on a variety of aspects like the revival of shopping centers (including things beyond shopping), changes in company culture, and future woes (maintaining a sizable workforce).

    The concept of “eminent domain” really piqued my interest. I had heard of the concept by little more than name until now. I am not well versed in my knowledge of government policy or even business for that matter (I’m still getting into it). The concept is sound on paper when used for appropriate action like removing a rundown building used for nothing but drug trafficking and replacing it with a community center, etc. But I see the problem in government corruption twisting everything to appear how they want it so they can get the appropriate funding from a corporation to boost political careers. It is a major issue, but the book frames it as if it is the only option available left for category killers. Indeed all corporations want to grow and as space becomes scarce, category killers turn to any option available, in this case, they essentially forcefully evict current residents of targeted space. Much like our discussion in class, they lay on the side of legality, but their position in the ethics field is not as pure.

  98. Chen Iu Chiang

    Part two of this book discusses about how and why category-killers dominate. There are several factors resulting in their success, including the analysis of optimal price, the impact of the Internet, the application of inventory controlling system, the concept of self-service, and the “commoditization” of consumer goods. Also, the shrinking influence of the traditional department store has opened up a growth opportunity to category-killlers. Power center, for example, is one of the new types of shopping mall which replaces the traditional one. Smaller store formats, on the other hand, is category-killers’ another approach to expand to densely populated urban communities. Besides the domestic maker, to seek more growth opportunities, international expansion of those big retailers would be eventually inevitable.

    Doing business abroad is indeed difficult. As a “non-American” myself, I especially understand that why some of the U.S retailers failed when it comes to international expansion. Take McDonald as an example, had it not position themselves as a playground for children and teenagers in Taiwan, it would have had trouble making enough profits since Taiwanese are more used to eat rice. Hence, the different culture raises the possibility of making wrong strategies which usually lead to category-killers failure.

  99. Chen Iu Chiang

    The final part of “category killers” talks about the opposition forces and the future of category-killers. Opponents fight big-box retailers in some creative way, including environmental impact statements, restrictions on design and store size, and the threatened withdrawal of subsidies. The effort against big-box retailers eventually forced those category-killers to be more concern with communities. As for the future of category-killers, nothing is certain. The only thing is for sure is that all category-killers have find other ways to expand. This is why we can find that some of the category-killers starts experimenting with other retail concept.

    The environment is changing all the time. No one could exactly predict the future trend. Today’s dominant business concept may become old-fashioned one tomorrow. Therefore, what Wal-Mart and other retailers try to do is to ensure of their future. Sooner or later, we consumers will develop another different shopping behavior.

  100. Rachel Fradkin

    The start of Category Killers details the shift in retail from traditional department stores to discounters and category killers. Spector begins with a brief overview of the change in landscape of much of America. Although he focuses on a small valley outside Seattle that has gone from fertile farmland to a massive retail center, he emphasizes that it is the same change going on in “every corner of the United States.” Spector then moves on to Charles Lazarus and the other pioneers of discounting as well as the public and political fire they faced. Finally he finishes Part I with a brief history of major category killers in books, home improvement, office supplies, pet supplies, home electronics, coffee, and warehouse clubs.
    Category killers are based on two things, a deep and specialized inventory and a low price, but I don’t know if these two factors will continue to keep all the killer’s Spector listed going. In the past, while competing with department stores, the differentiation of products and discounted prices kept consumers coming even if they didn’t care for the look or service of the store, but now when the category killers are being beat out on price will consumers still care about having every choice available to them. I think the most telling figure in Part I was that the three largest office supply category killers only had 20% of the market share when the book was published. The category killers are being beat out on price by stores that can still carry a wide enough variety to appease most consumers and are being beat out on choice by online shopping and must find new ways to bring consumers in.

  101. Rachel Fradkin

    In the second part of his book, Spector starts to go more in depth and review the strategies of category killers. He breaks the section up into four sections, pricing, competition, growth and expansion. The pricing chapter, which he titles “The Cost of Everyday Low Prices,” explores the methods and consequences of the continual drive to lower prices. Everything from self-service to private label brands are used to allow the category killer to compete on price. The competition section focuses on the rise and fall of department stores as well as their current state of consolidation. Spector moves on to discuss domestic growth strategies which is mainly about new store formats. Finally, Spector gives a brief history of the various forays into international markets and the challenges the category killers face especially the presence of similarly modeled stores already in place.
    Part II disappoints; instead of moving into more in depth analysis, Spector continues to give a broad history with very little analysis. He introduces so many category killers in part one and must attempt to link each to every topic and then throws in a whole chapter on department stores too. The book should either focus on fewer stores or be longer to accommodate a more thorough discussion on all the points Spector briefly mentions. I feel like I am getting a good background on category killers in general but nothing that insightful. As Rachel mentioned earlier, there is nothing here that couldn’t be found in pieces elsewhere. With that said, I appreciated the section on the commoditization of goods and new store formats. For my project we found Target would like to develop smaller urban stores, but apparently this is nothing new since Spector mentions this exact strategy back in 2005. The competition section was extremely lacking and just seemed like Spector wanted to diverge and discuss the history of department stores. There may be some parallels to category killers and important lessons to learn, but I don’t think department stores are the competition most category killers are concerned about.

  102. Rachel Fradkin

    The final part of Category addresses recent concerns and the future of retail. Part III begins with a discussion of the partnership between big retailers and community officials. Spector says that the two “need each other desperately;” retailers for the incentives elected officials can offer, and officials for the tax revenue that can be generated. His discussion moves into eminent domain and the possibly abusive ends it is now serving. An extensive listing of shady cases in which big retailers were given private land are listed as well as a few cases in which the land holders fought back and won. The backlash towards category killers extends beyond these cases though, and Spector again lists cases in which different grass roots movements, community organizations and independent retailers have fought against category killers. The second half of Part III addresses the future of retail. Spector talks about some of the options both independent and big retailers have for future success. For independent retailers that means focusing on niche retailing and for the category killers it means becoming more efficient within their category to compete with Walmart and other category killers in their field.
    The most interesting section of Part III was on eminent domain. The practice seems to have gotten out of hand and is somewhat disturbing. Another issue that bothered me was the practice of rewarding big retailers to come to a town to get tax money. Spector starts to discuss a potential problem with the increased tax revenue not supporting the increased responsibilities but does not address another obvious concern. It was most flagrant in the case where Costco threatened to leave one community and go to its rival if it would not give Costco the space it wanted. What guarantees does a community have that a retailer will not pick up and move out of that area after the community has become reliant on the tax revenue and jobs and has devoted crucial funds to drawing the retailer in with better roads and services? It seems like many communities will be left back where they started with huge, sparse retail spaces they cannot fill.

  103. Zachary Rubenfeld

    In Part II, Spector begins analyzing the different factors that contribute to a retail company’s sustained dominance in a particular industry. A major reason for why many of the big-box retailers continue to dominate their respective categories is because they are able to effectively price their products in a way that transforms the consumer shopping experience into an affordable and extremely manageable process. Outsourcing labor, manufacturing, and other value chain components, along with utilizing advanced computer technology to optimize product pricing and update individual suppliers about low inventories, serve as important strategic measures that can assist big-box retailers in obtaining and maintaining their positions in a highly competitive marketplace. “The prices found in Wal-Mart Supercenters are, on average, 14 percent below the prices of the competition,” due to the fact that their highly sophisticated computer inventory management systems work to assess the best ways to capture value across distinctive product value chains. Since the product pricing is a major driver of customer traffic in the retail industry, the “deal,” or the low price of a product, not the “dealer,” the brands of the product’s maker and product’s retail distributor, play a major role in communicating value to the customer.
    Another major factor discussed in this section pertains to a company’s ability to grow and expand and how remaining stagnant in a specific location or category can damage a retailer’s competitive advantage in the long run. Starbucks serves as an example of a company that has successfully leveraged their valuable brand equity to expand into international markets, as well different product categories, such as soft drinks made available in supermarkets, convenience stores, and gas stations. By expanding their brand in international markets and different product categories, Starbucks demonstrates how a company must continue to innovate or elserun the risk of being stamped out by another dominant player.
    Innovation is an important concept for managers to understand when analyzing the opportunities and challenges existing within and outside of the retail industry. The ability to create something new and unique, a product that simultaneously offers value to the customer and makes it incredibly difficult for competitive rivals to duplicate certain processes and product features, presents a retailer with an opportunity to differentiate itself from competitors that appear strikingly similar in regards to product selection, pricing, and store location. Although, retailers must continue to search for different ways to attract customers into their stores, it is extremely important for managers to remain wary of the risks associated with brand extension. Companies risk damaging their brand images and communicating mixed signals to the customer if they begin associating with the non-related product categories that cannot carry the brand’s core associate or image. A retailer must also take the time to assess its marketability and profitability in certain indigenous cultures by developing relationships with local firms and suppliers or else risk the chance of not understanding customer preferences in a certain region. Expanding and growing a retail business is strategically valuable and important, however the process must not come at the cost of jeopardizing an already successful and proven business model.

  104. Stefan Boulanger

    In the first part Robert Spector speaks of how discounters and the first category killer came to life and the resistance that followed. There was resistance to the big chains and discounters that were springing up everywhere because their low prices were driving the small retailers out of business. Some people called big chain stores “soulless corporations” and tried to kill them by such acts as trying to pass laws. Although there was resistance, these discounters and category killers were mostly targeting lower income demographics and during these economical hardships that demographic grew, allowing them to beat the resistance. People no long longer valued the warmth and ambience of a nice department store as much, but rather shop in a cold warehouse filled with the same or similar products for cheaper. The reader now learns how easy and powerful this pricing strategy is, by being introduced to all the many category killers, and their categories, that sprang up following this pricing strategy.

    This gives a great introduction into the history of retailing and how it led to how the world is today. It was very interesting seeing how Lazarus took the first step by taking a big risk with his new idea and seeing it succeed so well due partly to the idea itself but due also to the pure luck in timing. It was also amazing seeing how one successful idea spread like wild fire making copycats and category killers in different categories appear everywhere in such a short span of time. One of the most interesting part, was the fact that “Toys R Us” and discounters started off focusing on certain smaller niches of the population, but due to the financial times that niche grew to be much larger and it lead to the strategy becoming a broad one without them doing anything.

  105. Stefan Boulanger

    The second part talks about why they dominate. Category killers changed the face of retailing, because now the customers had a choice between the ambience and customer service of a department store or the low prices of a specialized category killer. The department store has been valued for being a “one stop shop,” but now with shopping centers and malls filled with category killers and new highway systems, customers could do all their shopping in one central location in specialized and cheaper stores. The pricing strategy was a very powerful one but in the next chapters the reader sees how this strategy can easily be copied and the new challenge became about beating all the new copycats springing up. The general tactic of course was to lower prices further, to do this they had to reduce their supply chain costs to be able to sell their products for less without selling under cost. Survival meant being able to adapt and stay ahead. Spector then describes how the category killers and all the reasons they dominate lead to the decline and destruction of most department stores. In the next few chapters the reader now learns of how the category killers not only need to compete in price, but in geographical coverage. To stay ahead they need to expand by not only opening new stores in different cities, states and countries, but by having different store formats such as smaller and larger ones depending on the city and demographics.

    As many have described I found this section fairly disappointing. It was interesting seeing why many different category killers have succeeded and why they still dominate today. These were vaguely outlined in the first part and one could infer many things described in part two before even reading it. I just wish that he would have split this part into more parts going deeper into all the topics he describes briefly. One thing I did feel he described in good detail, was how the domination of category killers linked with other factors, led to the decline of department stores and their inevitable doom if they stay on this path.

  106. Stefan Boulanger

    In the third part of the book the reader sees the backlash that came from the birth and expansion of all these category killers and discounters. We first explore the same resistance from the communities as we have seen before, with people calling them “soulless corporations” sucking the soul from every town they step in. He then describes the governmental influences mainly eminent domain laws. Eminent domain laws play a very critical role in the expansion of category killers and discounters. There is a constant battle between category killers and private businesses and homes for the ability to expand into certain locations, and this is where eminent domain laws come into play. The category killers use many dirty tricks and loop holes to win those battles. Finally the reader is pushed to think of what is to become of these category killers that need to constantly grow and adapt to the times, with the constant new threats such as the internet or other companies such as Wal-Mart.

    I found this section to be really eye opening, especially when describing the eminent domain cases. You always hear about corporate and government scandals, it was really interesting to see specific examples and what lead to them happening. It is scary to see how the sheer size of category killers and discounters like Cost-Co and Wal-Mart, have such a powerful pull that it can make large companies and cities bend to their demands. Even though some of the category killers’ demands are heavily defended against through laws and the peoples’ opinion, they still get through.

  107. Zachary Rubenfeld

    Part III of Spector’s Category Killers focuses on the changing trends in consumer behavior, community and political activism, and the business models and responsive measures used by smaller, independently owned retail stores. The concept of “eminent domain” demonstrates the symbiotic relationship that exists between big chain retailers and local and state governments, allowing big-box retailers to acquire land in the possession of another group or entity to serve the economic and social welfares of the people. Spector demonstrates how the interests of big chain retailers and the political domain constantly intersect due to the fact that funding for many local government projects is generated by the taxes paid by big-box retail stores. In general, much of the backlash against big-box retailing comes from the workers of smaller, independently owned stores, who strongly believe that big-chain retailing creates an uneven and unfair playing field by deploying financial and physical resources to capture market share. National organizations, such as the American Independent Business Alliance and Sprawlbusters, represent coalitions of hundreds of small, independent businesses that work together to protest the activities of big chain retailers. Although many individuals view a general lack of corporate social responsibility on behalf of these mammoth category killers, a lot of these companies utilize their financial resources to boost various activities in local and foreign economies. Starbucks has done more than any other small or large retailer to ensure that indigenous farmers in foreign countries receive fair prices for their coffee beans. By donating millions of dollars to coffee farmers, purchasing millions of pounds of fair-trade coffee, and providing technological resources to growers, Starbucks challenges the stereotypical perceptions of big-chain retailing.
    In the immediate future, big-box retailers will continue to dominate the retailing landscape due to their enormous buying power, product assortment, and effective pricing models; however the future of big-box retailing remains uncertain. The internet has transformed consumer behavior by making the customer experience that much more convenient, easy, and accessible. Charles Lazarus’ pioneering retail model, in which customers scanned through various products lines, picked products directly off the shelves, and waited for service at checkout lines, is constantly being challenged by internet applications that allow customers to pay for a product with a single click. Customers can now browse multiple product categories, analyze buyer and seller reviews and recommendations, and compare store prices without the hassles of searching for a parking spot or finding out that their desired product is no longer in stock. In the face of rising retail expenses, such as electricity, store maintenance, and administrative expenses, managers will need to search for innovative ways to adapt and integrate internet business platforms and consider slowing down the expansion of physical retail stores.

  108. Gizem

    Category killers are not just big monsters who keep growing by eating smaller animals. Spector is trying to keep us away from believing in this oversimplified definition which many people choose to believe. There are several reasons why the category killers became so successful and powerful and Spector summarizes these reasons under pricing, competition, growth and expansion.

    The price advantage of big-box retailers are obvious but they did not earn that advantage quite so easily. Cutting prices required being on the top list in the efficieny game. And this game has grown even more competitive with the Internet becoming a mass product. Retailers operating on thin margins had to create efficient systems of technology, inventory, logistics and labor. It would be naive to disregard the “hows” of efficiency when it required suppliers to reduce costs, which led to low wages and illegal working hours.

    By definition, category killers kill competition and that’s what’s happened with the slow death of department stores and transformation of malls. However, Spector argues that there is also suicide involved in the case of department stores. By trying to compete with discounters, department stores stopped standing for something. As competition grow, financial objectives won over creativity and other forms of value creation and department stores became identical and boring, really offering nothing. As for the malls, it is just a matter of serving people’s needs who no longer want to spend time walking among hundreds of stores when they can just go to a stand-alone shop and get what they need.

    While category killers and big box retailers grow as a necessity of their survival, the decreasing influence of the department stores help this trend. However, they still face challenges, especially as people turn more towards specialty stores. Thus, as to guarantee sustainable growth, the category killers are designing smaller stores to fit these new needs especially in urban areas. Another challenge that these stores have felt the need to modify themselves on is the success of Dollar Stores. As these stores began appealing to more customers than even they had imagined, the category killers have responded by adding dollar sections to their stores.

    Growth has been challenging but necessary but even more challenging and necessary has been international expansion. High land costs, rules on discounting, limits on the hours operation are some of the challenges that Spector identifies. The most interesting challenge probably comes from the local competition, especially since some of those competition have copied everything, including the color of the logos the category killers.

  109. Michael McElligott

    In part I of Category Killers, Robert Spector examines the history of the retail industry, beginning with mom-and-pop stores, followed by department stores, malls & discounters, and finally the “category-killers.” Spector highlights that category killers receive this title as they dominate their category and “kill” their competition. Over time, category killers have rewritten the rules of the retail industry and reshaped the United States consumer market. Robert Spector next introduces Toys ‘R’ Us as the first category killer to emerge in the United States. Toys ‘R’ Us was propelled to the top of the toy industry by founder Charles Lazarus. Lazarus implemented computerized inventory management systems, enacted a lenient returns policy, and altogether drove out costs. In doing so he took a once-expensive product and offered it an affordable price to the average customer. Spector describes this as the “democratization of the consumer culture.” Finally, Spector points out some of the major category killers and talks about their history: Home Depot, Barnes & Noble, PETsMART, Circuit City, Starbucks, Walmart, etc.

    The book is intriguing up to this point. I learned a lot in the introduction of the industry as a whole and the history of these category killers, especially Toys ‘R’ Us. A major point that stuck out for me was the fact that Charles Lazarus implemented an electronic merchandise-tracking system in his stores. I was under the impression that companies like Wal-Mart had only begun using such inventory systems fairly recently (within the past 15-20 years or so). Charles Lazarus was certainly ahead of his time with this. We mentioned in class that a successful company remains innovative faster than their competition. This right here is a prime example.

  110. Gizem

    In the third part of the book, we are introduced to how the category killers earned their reputation of big monsters. A lot of credit in forming the reputation goes to the practice of “eminent domain” by which public officials, desperate for tax revenues abuse the ambiguity of the ‘public service’ concept. The public-private partnership in such instances has victimized many small retailers.
    The category killers have been blamed for many other ills such as environmental problems and traffic and have been accompanied by legislation against them in certain cases. However, opposition has not always been just either. Starbucks is probably the most important one of those retailers who has been used as a target not always because it engaged in wrong practices, but mroe because it was a highly visible company through which certain groups could gain attention.
    The most useful part of the book in my opinion was the section where Spector shows those successful independent retailers who not only stood against the competition of giants, but found ways to create value which could not be copied and made cheaper by them.
    The final chapter of the book focuses on the changing retail environment. Malls have started to adopt to this change of “New Urbanism” by creating lifestyle centers. While category killers have successfuly met the challenges from department stores and discounters, they need to fight a new battle againt the Internet. To sustain their strength, the category killers, just like any other business, have to be proactive against the changing consumer culture.

  111. Zongxu Han

    In Part II, the author discussed the concept of discount pricing, why the department stores fail, the growth of the category killers and even going globalization. There are several discounting pricing methods, such as private labels, strict inventory management, and the introduction of self-service. And the category killers tried to reach out to new markets, including power centers, smaller store formats, and the jump to urban areas. And later they were looking to expand to overseas markets.

    I think the category killers all learned from the death of the department stores. The bigger you are, the more possibility you have to survive. This maybe why we see more and more large supermarkets, but less and less department stores. The larger, the better.

  112. Dan Ryan

    In part II of Category Killers, Spector discusses how a change in consumer mentality has led customers to concern themselves not with loyalty to a particular store, but rather with always finding the lowest price. This change was prompted by category killers and discount stores constantly competing for the lowest price. Spector goes into detail about how these store squeeze every penny out of their supply change to ensure their prices stay competitive. Spector goes on to discuss how category killers and discount stores have taken a significant market share from department stores. This shift in market share can partially be explained by a consumer culture which is more concerned with getting a particular product as quickly as possible rather than browsing through several departments to find the desired item.

    Spector gives several examples of retailers having a certain degree of control over their manufacturers. For example, Wal-Mart requiring manufacturers to place RFID tags on products or only allowing them to restock items when needed, forcing them to absorb the cost of inventory. It is interesting to consider if this asymmetric relationship is healthy for consumers. On one hand, it is allowing retailers to make their supply chain more efficient which in turn brings down the cost of products. At the same time though, these retailers could use their strong influence over manufacturers to wipe out the competition, which will result in fewer options for consumers.

  113. Zongxu Han

    The third section of the book is “The Winds of Change for Category Killers”. This part started with a discussion of sales tax for products which are purchased on the internet. The author pointed out —– why companies like Wal-Mart supported tax on online purchases and companies like Amazon.com and other online retailers were opposed to it —- in-store returns. Later, “Category Killers” showed several examples of cases where very large companies use their power to get government action to gain sought after property. After that, the author did some discussion on the “Wal-Mart Effect”. The book, at last, concluded by looking to the future of the category killer.

    From my perspective, category killers will stay in business for a long time. And there will be more and more category killers which will drive the price down and down. Why? First, people enjoy in-store shopping. Second, people would like to shop for lots of things without going lots of places. Third, retailers want to stay in business. They are sensitive to what consumers’ need. After all, we can sit back and see how the “killers” fight.

  114. Dan Ryan

    Part III of Spector’s book discusses the experiences of several category killers who have expanded abroad in an attempt to tap the vast market which lies outside the boundaries of the United States. Some retailers, such as Starbucks, have been very successful overseas while others, such as Home Depot in Europe, have struggled. This section also goes into detail about the love/hate relationship many communities have with their local category killer. Much of the backlash Category Killers receive from communities comes from local groups who fear their presence will hurt small businesses. Spector also analyzes several cases in which category killers have abused Eminent Domain to move into a community. At the same time though, there are several individuals, particularly politicians, who welcome the arrival of a category killer due to the property and sales taxes they will have to pay the city.

    Toward the end of section III, Spector discusses the Wal-Mart effect and how it has Toys R Us, the first category killers, fighting to stay above water. The idea that Wal-Mart has the ability to dominate any category it chooses is one that should be taken very seriously by category killers. By simply expanding its inventory in a certain category, and continuing to offer it consistently low prices, Wal-Mart can take significant market share away from a category killers, as it did with Toys R Us. To protect themselves, category killers must focus on the aspects of their business that differentiate them from Wal-Mart, such as customer service and extensive inventory.

  115. Ryan Gallo

    Part 3 discusses problems category killers face and how they will change in the future. The opposition of Wal-Mart is part of a large struggle in both local governments and the retail industry overall. Many cities have enacted laws aimed at ensuring that a Wal-Mart does not open there. This has been repeated for many different category killers, most notably Starbucks, which has been accused of symbolizing “uniformity and commercialization”. Citizens of many cities would rather keep independent stores in their town than their corresponding big box retailer. The book concludes with a look at the future of the retail industry. Spector states that the future of category killers is not a sure thing, and they must continue to adapt and evolve in order to survive.
    I think the most interesting section of the last part of Category Killers is the section on the “Wal-Mart Effect”. I find it somewhat ironic that Wal-Mart can almost become the category killer of the category killers if it continues to impede on other retailer’s industries. Even though category killers have been able to cause the downfall of the department store, they cannot rest on their laurels. They must continue to evolve, or else face the threat of Wal-Mart’s low prices.

  116. Scott Einhorn

    The third part of the book details the current issues that big box retailers are facing and then gives a glimpse into their future. Spector first focuses on eminent domain and then gives examples of how companies such as Walmart are using this eminent domain in order to acquire cheap property in blighted areas. Even though I think that eminent domain is a tough issue I believe that by using eminent domain companies are creating jobs and offering cheap products that other wise people in these areas would not be able to purchase.
    The final chapter of this book shows how even though these category killers are thriving at the time in order to sustain their success, they will need to continue to develop and adapt to changes that occur in the industry and economy.
    I feel that Spector puts together a good conclusion and would love to see if he has written another book to follow up his predictions and how category killers are doing currently at this time.

  117. Michael McElligott

    In part 2 of the book, Robert Spector explains that there are four reasons why the category killers succeed. These include pricing, competition, growth, and expansion. Big-box stores are able to demand low-price inventories because of their size and drive out costs wherever possible. In his chapter about competition, Spector explains how category killers have been driving out their competition, particularly department stores. In recent retail history, consumers have been swaying away from brand loyalty and shopping based mainly on price. Bargain hunting used to carry a negative connotation, while it is now the popular thing to do. Department stores have been struggling because of their ineffectiveness in catering to these preferences. The final parts of this section discuss growth and expansion. Domestic growth has been commonly performed in the opening of small inner-city stores and the establishment of power centers in scarcely populated areas. International expansion is important for businesses especially with globalization occurring at a rapid pace. Some risks associated with overseas markets include culture differences, language barriers, differing rules and regulations, and in some cases large investments.

    The part that I found interesting about this is the way that businesses are expanding within the United States. The book describes it as a two-pronged approach. It is intriguing how business models differ for the two approaches (small inner city stores vs. large stores on undeveloped property) With small inner city stores, big-box retailers face high real estate and startup costs. They must implement new practices like Wal-Marts over-sized escalator system. From what I have taken away from this section, it seems that large power-centers are easier to implement than small-store formats. However, if a company can effectively enter the inner-city market, there is a very huge of opportunity for sales.

  118. Donghai Mo

    In the second part, Spector explains “how and why these retailers have come to dominate their categories”, including pricing, competition, growth, and expansion. By making products in low wage countries, controlling inventory, self service and private labels, proprietary brands and Exclusives, category killers using low price to drive mom-and-pop stores and department stores out of scene. The impressive impact the category killers have on consumers and other retailers can be felt in a way that once powerful department stores have to combine and/or merge with each other crazily to reduce price to compete with category killers, leading to homogeneous operation and downward. On the other hand, in response to increasingly competition and shrinking retail market in domestic, expansion aboard becomes a more attractive but a more complex move ahead of category killers who want to keep their position in the market.

    As to the way book uses to narrate, it is a little confused to me that when touching on the competition in “why and how they dominate”, he talks about development, the competition among the department stores instead of addressing the competition faced by category killers directly. In that chapter, Spector describes the reasons of the department success, then their downward development. The author may describe the category killers impacts in the light of department stores, but it is not straightforward enough.

  119. Ye Zhu

    The first part includes three chapters that introduces the concept of category killers, the development history of category killers and with the development the category killers are already everywhere. First, the author describes the born of category killers in south Seattle and how the big-bos retail looks like at that time, and Spector explains why this transformation and revolution happens. Then, on the chapter 2, the author uses the example of Charles Lazurus and his Toys “R” Us to describe the rise of discounting in the US. On chapter 3, the author focuses on other big retailers who in some extent copy the development method of Toys “R” Us to establish their own big-box retail shops.
    On this part, I gain a basic knowledge of what category killers is, and I notice that the time when this big-box retails comes up, for example, like Toys “R” Us, Lazurus can success because of the popular of televisions and the marketing is becoming to the customer-oritental market. And at that time, even today, most customers want to find lower price, so big scale means strong power of low price, that is the main reason that those category killers can success.

  120. Donghai Mo

    In the third part, Spector describes the ever-changing landscape in which category killers operate requires the change and evolve of them. Future development of category killers is faced with many challenges, such as strict ordinances, anti-sprawl activists, competing independent retailers, and short of labors. Also some new concepts of retail come out, for example, the hybrid center and lifestyle centers are being developed in response to “time-pressed consumers” who are buyers, not shoppers”. Therefore, category killers are not ensured of another bright tomorrow. Category killers will have to find their place in the ever shifting landscape of retailing in the twenty-first century, which is influenced by changing demographics, migration, shopping malls, and community and consumer needs. (Page 175) To the extent that they adapt or tweak or fine tool or reorganize, they will continue to be vital and important to the consuming public. (Page 191)

    As to the content, Spector may need to talk more about the impact of the internet. It the era of IT, internet will shape the retail industry more severely than any other power. Online Retail Sales have shown a significant growth of 243 percent for the period 2000 through 2004, with sales of $28.3 billion in 2000, rising to $68.9 billion through 2004. (Source: U.S. Department of Commerce Census Bureau.) The response of the IT impact will decide the future of the retailer. It is not what happens to you that matters, it is how you response to it.(McGregor,2009)

  121. Ye Zhu

    Part two includes 4 chapters continues to analyze how and why these retailers have come to dominate their categories, and further explore the whole framework of these category killers. Based on this, the author gets an analysis of the impact that the category killers make to effect the customer culture through the whole US, even on the international market. With the combination of “power centers”, the category killers beat on small specialty stores, mom-and-pop stores, regional chains, small-town downtowns, department stores and traditional shopping centers, even more, they change the habit of most consumers.
    I think that because of these category killers and discount shops, we can live at the times that everyday we can have the low price. And thanks to the development of technology, the category killers can analyze the consumer model of customers and know when should have discount, but as a two sides sword, the online shopping also takes the challenge in front of the category killers.

  122. Michael McElligott

    Part 3 of the book starts off with a discussion about retailers and taxes. The emergence of the internet has led to disputes of how online retailers should handle taxes with purchases. The Streamlined Sales Tax Project is in the process of proposal at this time and would change the application of sales taxes from the point of sale to the point of delivery of the product. Eminent domain is introduced next and is a very controversial process by which governments can take private property and implement projects for “public interest” or “public welfare.” There is incentive for government officials and big-box retailers to work together in ways that might not necessarily be best for the overall good.
    The book concludes with a look at the changing retail industry and what is in-store for the future. Many malls are being shifted towards open-air formats and super centers are becoming more prevalent. Wal-Mart is a retail giant that is increasing yearly. It has already played a part in taking out Toys ‘R’ Us, formerly the world’s leading toy seller.

    This part serves as a useful way to wrap up the book and let us think about what the future entails. We are left with ethical decisions to consider, like the fairness and effectiveness of eminent domain. I particularly like how Spector addresses the future when he states that the success of category killers “will depend on how these retailers meet the challenges of the marketplace.” This is an ever-changing industry that encompasses the entire country. Companies like the big-box retailers must respond to changes in consumer preferences and the overall market if they do not want to get driven out like past sellers.

  123. Ye Zhu

    Part three mainly focuses on change and future development, and points out the challenges that the category killers must face with in order to keep their power of competition. Also, the author mentions some anti-sprawlactivities, the pressure from the government, and independent shoppers have been fighting back by forming grass-roots opposition groups. The author also mentions that if the category killers want to maintain their competitive edge, they really need to think about what should they do and where should they go in the future.
    From my perspective, even if they are category killers, they can not predict tomorrow. The most important thing they need to do is to cater the customers. However, only to catering is not enough. Low price is good, but is not good for everyone. So those category killers needs to find a balance between the customers and other organizations like government and their employees. But according to nowadays’ situation, category killers will still lead the markets at least in several years.

  124. Kathleen Firtle

    In beginning his thesis on the category killers of retailing, Spector describes the plight of the the founder of Toys R’ Us, Charles Lazarus. He created the prototype for category killers with various specializations; following a similar model, firms like The Home Depot and Staples have sustained competitive advantages in their respective categories. The large-store format and accessibility to mass amounts of inventory of Toys R’ Us revolutionized patterns in consumer behavior. Americans were not deterred by the lack of intimacy in store experience; they were enthralled with the array of products offered at discounted prices. The sheer size of the organization enabled it to achieve significant bargaining power with suppliers; considering the dependence of newly established toy brands on Toys R’ Us, the retailer could offer consumers prices far below those of department stores. In setting the precedent for which many other firms would follow, Charles Lazarus understood the customer appreciated inexpensive brand-name goods.
    Relocating to Binghamton this year from life in the major cities of New York and Montreal, I immediately noticed the prominence of big-box retailers in the Vestal, Binghamton and Johnson City areas. As Walmart joins the community, it seems like each and every big-box retailer seeks an opportunity there as well (if the population exists to support it). It is surprising for me to live in a place where the vast majority of businesses are not of “mom and pop” type; however, it is really refreshing to receive such a noticeable discount on goods. Though I am eager to support local businesses, there is a comfort in the standardized goods that category killers sell and the flexible return policies of large retailers. While I was inclined to scrutinize the prevalence of such stores in the Binghamton area, I have become a more price-conscious consumer as a result.

  125. Kathleen Firtle

    In the second section of the book, Spector details how department stores’ success has dwindled at an increasing rate due to the vast expansion of category killer retailers. By offering a large inventory of products at discounted prices, each category killer has effectively taken market share away from department stores. There came to be a large number of big-box retailers; department stores couldn’t compete against large players across so many product categories. Instead, department stores became a random amalgamation of apparel and cosmetics. Having killed the department store, categories are seeking new territories to conquer—expanding both domestically through establishing different-sized store formats and internationally in applying a global strategy that depends on the resonance of large American brands among consumers in other countries. The dominance of the category killer has changed consumer shopping patterns; Americans no longer idle around malls but enjoy the convenience of driving up to a big-box retailer and finding exactly what they’re looking for in as little time as possible.
    It is interesting to observe the change in consumer behavior with the increased expansion of category killers. Though I consider Macy’s to have institutional status in our country, consumers have strayed away from shopping at traditional department stores as they only came to offer a random selection of apparel and cosmetics. However, the experience of entering an American landmark like Macy’s Herald Square is unparalleled by that of any category killer—a relic of a more elegant era in our history. It would be a sad day for retailing to see the end of a much more intimate, classic form of retailing in which products, though offered at a discount, are presented to look valuable (not cheap!). Category killers mostly have a very sterile ambience and lack that sort of character of a personalized shopping experience. Although I haven’t compiled any consumer data regarding this subject, it would not surprise me to find out that there is still a demand for department stores with institutional status.

  126. Jeffrey J. Reale

    Blog Post I:

    Robert Spector begins his book, Category Killers, with a case study of Seattle. Here the author tracks how retail has changed this city with specific details which are in many ways generalizeable to other parts of the country. In the Seattle example, land is constantly redeveloped to increase profitability per square foot. In one age that profit-maximizing use was farming; in another it was manufacturing. Now the most productive use for this highway-accessible land is big-box retail.

    The author then goes on to provide a profile of each major category killer, how they were founded, and what factors brought each to their current dominance.

    One strange duck in this lineup of retail giants is Starbucks, which simultaneously introduced and killed the category of ‘specialty coffee’ in the U.S. in 1971. According to the author, while Starbucks is not a big box retailer, it is a category killer.

    In my opinion if Starbucks is included as a category killer, then this classification must actually include quite an array of other firms that the author doesn’t mention. Starbucks is not a retailer at all; it is in the food services industry. As the author points out, Starbucks is not selling a product but rather “a lifestyle.” This raises a problem, because if we are going to include service firms in this discussion, then Spector’s book has not even begun to tap the large pool of firms that could fall under this broad specification of category killers.

    To cite one example that I am fond of, Industrial Light and Magic recreated the special effects business-to-business service category in 1977 with the release of Star Wars, and they dominated this category for several decades. However, does that mean that ILM was a category killer?
    Of course, ILM is a business-to-business service firm, so we could argue that it is not a category killer because its clients are not the general public. However, could it not also be argued that Microsoft is a category killer because, for whatever reasons, it has monopolized the operating system market? Is Apple a category killer in the MP3 market because of its I-Pod and I-Tunes Store? Is Google a category killer with its extensive collection of search engine and cloud products, many of which are not simply ‘low margin’ but rather free/ad-suported? Companies that attempt to fight these firms in their respective categories do so at their own peril (much as is the case with any retailer attempting to fight a big-box category killer).

    In my opinion the term category killer becomes less useful when we apply it to food service and other service firms. The term becomes equally untenable if we include firms that do not use the overall low-cost provider strategy which typifies nearly all the big-box category killers. If we are not specific enough with the definition, then any company that has taken all the market share for a particular product or service could be called a category killer. All things considered, given the retail focus of this book, Starbucks should have been omitted from this text in my opinion.

  127. Jeffrey J. Reale

    Blog Post II:

    The second act of Category Killers talks about the market trends which affect (or are affected by) category killers. Here, the author explores how category killers generally dominate through the use of the low-cost provider strategy, and that, by using this strategy en masse, they have nearly whipped out the traditional department store retail format. As if to write an elegy to a fallen hero, the author takes the opportunity at this point to give a brief overview of the history of these nearly-defunct retail titans. Lastly, this section discusses what options for expansion remain for these stores who have, in many cases, already finished saturating the U.S. market.

    Of course any book can’t discuss everything, but I wish this book covered more about international retailing. Spector barely has time in just fifteen pages to explore the opportunities that exist in developing markets (for instance), or to discuss at any length the retailing powers that already exist in other countries. This is particularly relevant as more and more U.S. retailers are acquiring foreign retailers as a primary growth strategy.

  128. Jeffrey J. Reale

    Blog Post III:

    In the last section of Category Killers, Spector discusses at length the mixed reaction by various stakeholders to the presence of category killers in the marketplace. One key element to this discussion that the author expounds upon is how retailers have used and abused eminent domain in recent years. The book ends with a discussion of how smaller retailers can survive in the shadow of category killers by focusing on creative differentiation strategies.

    The author’s examination of eminent domain is, in my opinion, the most interesting part of this book. He cites real examples of how this interpretation of the U.S. Constitution has been abused much to the grief of small business, tenants, and even churches that find themselves displaced for the ‘greater good.’

    Category Killers is copyrighted in 2005, but it must have been published before June 23rd, 2005. That was the date when the landmark Kelo et al. v. City of New London et al. case was decided in favor of expanding eminent domain even further. The unlikely bedfellow’s who were dissenters in this case include justices O’Connor, Roberts, Scalia, and Thomas. As O’Connor put it, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner.” Justice Thomas adds that the future abuses of eminent domain will no doubt be in poorer communities who are “not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful.” (KELO et al. v. CITY OF NEW LONDON et al., 2005)

    Using eminent domain for expansion is a great example of an unethical business practice that is in fact legal. Even if we ignore the considerable and, in some ways, overwhelming ethical objection to taking other people’s land for your own firm’s gain, the goodwill costs of such activities represents a long-term PR nightmare for firms that engage in this practice. Wal-Mart, in particular, is already widely despised for a host of reasons; by engaging in this practice as well, Wal-Mart is further engineer negative regard towards itself. Wal-Mart can eat the cost of being despised now, but if the market ever presents another equally attractive approach to retail (and history tells us it will) customers, employees, manufacturers (virtually every stakeholder short of tax-hungry local governments) would gladly “jump ship” and see Wal-Mart fail.

  129. Andrew May

    Part 1:
    Spector starts off Category killers with a look back in time. He talks about how Toys R Us was the start of the category killers stores. This part he also states that their are category killers everywhere in the United States. He speaks about all different types of stores; home improvement stores how Home Depot and Lowes are the main competitors. He speaks about office supplies how Staples, Office Depot, and Office Max are main competitors there. He goes into detail about Borders and Barnes and Noble, how they have made it very difficult for other smaller book stores to compete, but on the other hand they are a major reason why books are as popular and available as they are today. In the home electronics industry he speaks about Best Buy and Circuit city and how they began as small specialty stores and grew into the monsters of the electronic stores.

    In part 1, I found the talk about Toys R Us to be the most interesting. Yes I thought it was good that he spoke about how their are category killers in so many different types of industries, however he did not go into much detail about each of them. It was more of a broad, quick overview of the subject, which I did find interesting and helpful.
    The discussion of Toys R Us and Charles Lazarus was very intriguing to me. Toys R Us started at the perfect time, when television was just being introduced into families’ homes and there were not very many other competitors.
    I also found it ironic that Charles Lazarus was such a big help to the start of WalMart and now current day, Walmart is trying to take over the toy business from Toys R Us. It is just an interesting and ironic side story that is going on in America Today.

    Overall, I thought that Part 1 was a good overview and introduction to what a Category Killer is and gave a good broad overview of examples throughout different industries.

  130. Andrew May

    Part 2:
    Spector breaks this section into Pricing, Competition, Growth and Expansion. So I will break up my blog into 4 parts.
    Pricing- Category killers are responsible for todays consumer ideals of “everyday low prices”. Spector states that today people will shop online to find the lowest price and then go to whichever store they find has it cheapest to purchase what they want.
    The so called “WalMart effect” has been lowering prices for many years now, other stores need to compete with WalMarts efficiency and low prices if they want to stay in the industry. Also Spector speaks about the impact of the internet in this chapter and how it greatly affects both prices and competition.
    Competition- Category Killers are a main contribution to the shrinkage of department stores in America which decreases competition. Spector talks about “shopability” in this section and how “people don’t want to wait for a clerk..” pg 93. He also talks about how customers are not loyal to any specific store, they are solely interested on price and normally the first price they see is not the lowest.
    Growth-“Everything must grow or eventually die. Wall street demands it” is one of my favorite quotes of this book. Category killers are growing into conventional shopping malls and supercenters along side many major highways. They are also expanding into iner-cities as well as internationally.
    Expansion- After taking over the United States category killers now are trying to look outward to foreign countries. Spector talks about the difficulties and the success of some category killers outside the united states. Starbucks is a great international success story when it comes to category killers while WalMart suprisingly is a international failure so far.
    We will discuss the opposition to Walmart in the next blog.

    Spector gave a great discussion about how category killers have affected consumer beliefs. Pricing is a major one of these beliefs and I found it very interesting how the American consumers were so influenced by category killers way of pricing. Soon children will grow up without department stores and without small mom and pop stores. The way people shop has changed due to the emergence of the internet. I also enjoyed Spector’s analysis of category killers growth and how they need to keep growing and expanding or else the next new thing might pop up and steal the American consumer away just like category killers did to department stores

  131. Andrew May

    Part 3:
    The backlash of the public- Many groups and communities do not want these big category killers in their neighborhoods. The stories of eminent domain and taxation benefits that some local governments gave the category killers were horrible. Spector goes into great details of many different stories of the corruption of eminent domain between the category killers and local governments.
    WalMart has seen a lot of this opposition as well. Spector states that “opposition to major chain retailers is growing in numbers throughout the country.” Small, private business owners and their families and friends to not want WalMart in their neighborhood to compete with. It is nearly impossible to compete with these category killers. Also these category killers are not as part of the community as the private stores are even though they try to be it is still not the same.
    Spector talks about the future of the retail industry and again the “WalMart effect” in the last chapter. It is crazy to think about how much effect these category killers have on the market, the way they control costs and decrease prices makes it almost impossible for anyone to compete with them. Spector talks about the future and how category killers are not gauranteed to survive, but he states that they must continue to adapt and reorganize so they are not replaces by the new comers who capture the needs of the new consumer culture.

    My best friends family owns a local hardware store in my town. When a Home Depot was petitioning to move in down the road I saw first hand the problems and pain this caused the community. Their was no way the family was going to be able to compete against the low prices and size of a Home Depot. However, the town realized that their was no way that Home Depot was going be able to compete with the local run department store on customer service and community service. Luckily for my friend’s family and the community the Home Depot was not allowed to move in.
    I think spector brings up many good points about the backlash of big category killers like Walmart and Home Depot and the future is always a very interesting topic. No one knows how long these category killers are going to last until the next big movement of retail stores come and take over the industry. I always find the uncertainty to be very interesting and am looking forward to what happens.

  132. Kathleen Firtle

    Big-box retailers have been scrutinized for their homogenization of American culture and their propensity to evade notions of corporate social responsibility. America is now a cornucopia of big-box vendors who have driven out local competitors—sometimes at the cost of the social and environmental welfare of the communities in which it operates. Spector describes that many retailers have claimed eminent domain for their own commercial interests and have exacerbated opportunities to adopt larger store-formats despite the fact that their externalities of operating such projects are more severe. As Americans come to appreciate the “super center” store format, category killers continue to be incentivized to enter new markets because their retail sales tax revenues fund local infrastructure. If local activists cannot impede the growth of these stores, we may have the same category stores occupying all cities and towns in our country.

    It is alarming that consumers are so convenience-focused that they are demanding all category killers be in one huge super center. The fact that we have become too lazy to appreciate the differentiation inherent in local small business ventures and want to get what we need as easily as possible despite the effects it may have on society, culture and the environment. Although category killers have been proven to pollute the areas in which they operate and increase economic instability in local communities, we still continue to support them. It is important that we learn to start to question the practices of major retailers before we throw our money at them.

  133. Felix Fischer

    The first part of the book deals basically with the history of the American retail industry during the last century. Starting with the small town of Tukwila which became one of the cradles of supercenters the author continues with the influences of the changing infrastructure on the market. Furthermore he shows the beginning of wholesaler’s, discounters and the rise of the department stores which were the dominant retail format after the Second World War. The market changed rapidly with the appearance of Toys”R”Us and developed quickly and influenced the society as well as the land using policies of communities. After that the book gives insights of the creation of the leading category killers of the categories i.e. home improvement, toys, pet food and books. These small but detailed examples show that all category killers grew fast and had nearly the same kind of entrepreneurial founder.
    Robert Spector shows the interconnection between each category killer. They learned from each other and adapted the business model for each branch. The first was the fastest growing and conquered the market very fast. In addition the CEOs of the biggest office supplier was in the board of advisors of the biggest pet food retailer and so one. The book also characterizes the deep influence on changing the landscape and living habits of the American customers in an exhorting way.

  134. Felix Fischer

    The second third is dedicated to the development of category killers and shows the sources of growth they used. Spector explains the mechanism of pricing and how category killers facilitated the deal seeking habits of their customers. Furthermore he defines the competition including department stores, dollar stores and the online trade as possible challenges in the future. After that the growth in the domestic markets and the extension of product ranges are mentioned as appropriate actions to grow in domestic markets. In addition he shows opportunities of growth and focuses on international markets and how category killers expanded successfully and unsuccessfully. The expansion in international markets includes a overview of the international competition in certain markets.
    I think his views on the shift of bargaining power towards the retailer are interesting and right assumptions and characterize the main reason why category killers are so powerful. Hence the exploitation of suppliers by retailers is one of the main threats predicting the emerging price war. Category killers are able to user their purchasing strength to squeeze suppliers and exploit their high dependence. His views in terms of the re-urbanization in America compared to Europe are very interesting as well as the reasons for failing international expansions. (3 hole puncher in Japan)

  135. Felix Fischer

    The third and last part of the book gives an outlook of the retail industries future. Increasing resistance in the society and lots of scandals are harming the image of category killers. The big retail giant Wal Mart is also a big threat of the retail companies especially Toys”R”Us. However to adapt these market challenges many category killers tried to adjust their business in terms of management know how (Home depot) or an increase of service (Best Buy) to gain customer loyalty. The future is uncertain because of the power of Wal Mart and different kinds of changes in the society forces category killers to move back to city centers and using legal actions like eminent domain actions to obtain appropriate land. The future prophecy of Spector is a mixture of the fear of being replaced and believes in the power of category killers.
    This part shows perfectly how the once invincible category killers became vulnerable. The competition becomes stronger and with the demand “for always low prices” more and more severe. Category killers like Best Buy and Toys”R”Us have to fight to survive, other like Circuit City are bankrupt. It shows that the format was and is still innovative but with the nearly invincible competitor Wal Mart and a rising number of small, inventive niche stores – the power of category killers are declining and might face the same decent department stores had.

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