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Retail Marketing Term Paper


In order to better understand the staffing and retention strategies of Saks Fifth Avenue or Nordstrom, one should take a look at these companies, their nature of business and their demands for labor resources.

Saks Incorporated company, for instance, operates in 25 states and has over 60 different stores as well as another 55 off luxury stores present in another 24 states. This company is in the top of the line in fashion selling different types of apparel, cosmetics, jewelry, and shoes from well known designer brands such as Prada, Chanel, Louis Vuitton and some of Saks private proprietary brands. The primary target market are females aged 35 to 55 with large disposable income although some recent attempts were made to target younger females as 80% of customers are affluent females. Saks incorporated possesses 2 segments: Saks Department store group and Saks fifth avenue enterprises. Saks department store group sells fashion apparel and decorative home furnishings, while Saks fifth avenue offers only luxury fashion apparel and gifts (Mathis, 2004).

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Nordstrom on the other hand is a fashion specialty retailer in the USA only with the following three segments: retail stores, credit operations and catalog /internet sales. The retail stores sells apparel, shoes, cosmetics and various accessories. The credit operations segment on the other hand operates only Nordstrom private brands/labels and Visa credit cards. The catalog /internet sales segment sells the same stuff offered by retail stores segment via direct mail catalogs and official corporate website. The company owns over 100 stores, over 60 Nordstrom racks, 12 fashionable boutiques, 2 clearance stores and some 40 boutiques scattered around Europe.

So, speaking about where the industry is likely to recruit will depend on the position. If the companies want to recruit fashion models they will likely contact modeling agencies or beauty schools. If they want to hire marketing people, they would certainly contact the universities that prepare these human resources or will contact some major recruiting agencies. In modeling they would probably require only those competencies present in models such as beauty and ability to move the right way to advertise the clothes. For other posts, the industry will require just about the same skills that these positions need to possess, e.g. accountants will need to have a CPA or a degree in accounting, while marketing people need to have marketing degree and ability to do their job right (Losey, 2004).

If I were to recommend some of alternative staffing strategies I would certainly recommend the companies to through various job fairs on university campuses where young potential labor force lives. The rate of turnover would be acceptable or normal if it does not surpass the rate for this industry. For fashion industry the rate of employee turnover is about 10-13%. The direct cost of turnover is the cost the company incurs when not having the right number of workers every time it needs them, and the costs associated with employee search and training (Nkomo, 2005). The indirect costs relate to inefficiency present in new hires compared to the old/experienced employees. The falling employee morale and motivation as reflected in high turnover rates also belong to indirect costs. The higher the turnover the higher the costs the organization incurs and as a result the more inefficiency and thus more ineffectiveness it possesses on its way to achieve its goals. As a result, companies with high employee turnover rates already have a disadvantage when pursuing their goals since they incur more costs and expenses that otherwise could have been reduced (Ulrich, 2003).

The companies like Nordstrom or Saks use the most common strategies to retain their employees as other companies would use. Among them, increasing compensation packages, social package (insurance, mobility, relocation money), bonus system, promotion system and fringe benefits (stock options) to retain the best and most productive employees in the company.

In order to reduce the undesirable turnover, I would recommend to include a motivation and social package for the family members such as free tickets to NBA games for kids and free annual gym passes to spouses (Weddle, 2004). In this case when the employee fails to work effectively he will have some major pressure not only at work but also at home as the wife and kids would get used to those free tickets and gym passes and tell their husband and father to work for that good company.

The turnover is desirable when it equals to or is smaller than the industry average turnover rate. Ideally, the employee turnover rate should be non-existent, i.e. when people only join the organization and build their life-career with that firm.


Mathis, Robert, 2004, Human Resource Management, Prentice Hall, pp. 91-92
Nkomo, Stella, 2005, Applications in Human Resource Management : Cases, Exercises, and Skill Builders, McGraw Hill, pp. 305-307.
Ulrich, Dave, 2003, Tomorrow’s HR Management : 48 Thought Leaders Call for Change, NY Random House, pp. 144-145.
Losey, Mike, 2004, The Future of Human Resource Management: 64 Thought Leaders Explore the Critical HR Issues of Today and Tomorrow, Barrons books, pp. 70-74.
Weddle, Peter, 2004, Postcards from Space: Being the Best in Online Recruitment and Hr Management, Wiley and sons press, pp. 340-342.

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