Introduction
Hudson Bay is a full-line department store business that specializes in high-fashion garments, accessories, and soft furnishings in Canada. The Hudson Bay Company provides high-quality products at mid-to-high prices, as well as standard department store services. Hudson Bay shops are located in suburban and urban areas, as well as a commanding position in the downtown centers of Canada’s main cities, and are dedicated to providing outstanding value and consistent, dependable service. The Hudson’s Bay Corporation (HBC) began as a fur trade company in 1670 and grew from there. Initially, it focused on trade stations in the James Bay and Hudson’s Bay areas, but it gradually expanded and penetrated into interior Canada. Hudson’s Bay used an acquisition strategy to dominate the Canadian retail sector in 1970, and they were highly successful. However, their plan did not endure long, as the corporation abandoned its acquisition strategy and sold off non-essential assets amid the economic slump (Brett, 2021).. Later, they bought additional businesses such as Western Canada and Kmart Canada, and they expanded their product line by building Bed, Bath and More locations in the GTA. HBC also joined the ecommerce field with the introduction of HBC.com, recognizing the necessity for online business. However, the corporation has never embraced internet selling, preferring instead to focus on conventional department stores throughout Canada. Until recently, they are more marketing centered on digital, service model, analytics, and consumer feedback since the pandemic. Their brand values are being communicated to Canadians via television advertisements and other platforms such as social media and movie theaters. This paper will discuss the changed dynamics of business that have influenced the operations of the business since the mergence of Covid 19 such as changed consumer behaviors, how the businesses responses to Covid-19 and also the measures it would have taken to respond much better to the pandemic.
Changed Consumer Behavior Due to Covid
Since the emergence of Covid 19, People are becoming less comfortable going to malls, which is reducing Hudson Bay’s client base. People who work from home do not choose to go to the mall since they are concerned about COVID when purchasing online. In this situation, the business loses consumers in the actual shop, which is crucial for brand exposure. As of the third quarter of 2019, Hudson’s Bay Company, a Canadian retail company group, had retail sales of around 5.47 billion Canadian dollars during the previous five years. This is a modest reduction from the 5.51 billion Canadian dollars in retail sales recorded in the same time a year ago (Karen, 2020). The revenue is lower in 2018 than it was in 2017. There are many reasons for this drop in income. However, consumer purchasing habits have shifted in the recent two years. Since 2020. People are unable to view fresh designs or goods in shops. People usually go to a shop to look around and then find something they like and wish to purchase. However, because to covid, they no longer have the opportunity to explore as often, which has an influence on their purchasing habit, causing Hudson Bay’s sales income to fall. Since the previous several years of the pandemic, Canadians have a greater risk perception of the epidemic and are returning to their normal buying habits. But, if we think about it, customer purchasing behavior differs depending on the amount of comfort in each retail sector. At physical retail and grocery shops, consumers are more comfortable returning to old habits, followed by restaurants and malls.
HBC’s Quick Reaction to Covid 19
The emergence of the COVID-19 pandemic has put the 350-year-old business existence in jeopardy. When the Canadian government-imposed lockdown measures, the company’s first response was to ignore them, resuming operations days later, laying off over 600 staff to save money, and attempting to get into online retailing via its website. Its attempt to diversify online was ultimately unsuccessful (Rosa, 2020). They attempted to catch up on their e-commerce company in the face of tough competition, but they fell behind corporations like Amazon and other established competitors like Nordstrom. Customer expectations, on-time delivery, and other internet company operations are still a challenge for them. Furthermore, unlike Walmart and Amazon, HBC had inventory management concerns and was found to be inefficient, resulting in blowout sales every now and then, costing the firm more money and increasing inventory expenses.
Furthermore, the initial response to lay off a large number of employees, approaching 600, proved to be a hasty choice, as it became impossible for them to maintain their e-commerce operation with the current crew (Rosa, 2020). As a result, HBC’s selections did not result in a successful mix, which would have resulted in a larger client base, lower expenses, and eventually profitability.
Additionally, the management’s decision not to pay rent for its stores when the lockdown was imposed led to consumers speculation that the company is broke, heavy fines by the government and increased unsustainability of the business (Rosa, 2020). Unfortunately, its consumers currently have no many variety of stores to visit since a majority pf them were closed due to landlord wrangles. Consumers prefer going checking the products and it is unfortunate the business cannot meet this demand as it previously did
What HBC May Have Done Differently
Partnerships with significant organizations that currently exist in the digital world, such as Amazon and Walmart, is the ideal transition strategy that the company should have pursued at the time. Managing the COVID 19 pandemic would have been best managed if HBC management had recognized what had previously worked successfully, assessed the strengths, capitalized on them, and recruited experts to formulate plans consistent with their beliefs and aims. HBC must strengthen its flexibility to react to the changing environment in this age of growing client expectations, globalization, AI technology, and efficient procedures. Instead of purchasing and expanding into extreme companies, HBC might develop alliances and engage with other market players that have economies of scale or expertise that could assist HBC. For example, working with Amazon and Walmart to expand their consumer base, inventory management, and so on (Brett, 2021). They may also provide a more diverse experience for their customers, similar to Nordstrom and other retail behemoths. Rather of going large the first time, HBC should have first tested the market with new initiatives, partnerships, and collaborations to see what the results and profitability were like. HBC must balance change with stability. They had been dealing with leadership instability and personnel churn, which needed to be addressed. HBC’s shareholders and management must have the same ideals and vision for the company’s future development. Investors’ anxieties are heightened by leadership instability, which disrupts the business culture. Finally, HBC must adapt to the shifting retail market conditions. They must innovate the shopping experience, the aesthetic of their shops, and their e-commerce company. HBC will need to attract resources to assist it accomplish its objectives.
Conclusion
In conclusion, the optimum plan for HBC would have been to work with well-known companies such as Amazon and Wallmart. This would help the firm get off to a solid start in online retailing. HBC’s management should have learned from the failures of other firms who attempted internet retailing for the first time during COVID and failed, such as Sears’ sudden exit from the Canadian retail sector. Notably, inventory management and customer reach are two crucial factors that put Walmart ahead of many other retailers throughout the globe, allowing Walmart to keep its operating expenses low and consequently profitability at a desirable level. If HBC wants to continue in the retail industry, it must use techniques that keep costs down, consumers happy and assisted, stakeholder trust maintained, and ethical standards in accordance with shared value. To achieve the aforementioned, HBC must infuse innovation into its shops and consumer shopping experiences. Partnerships with retail behemoths like Walmart and e-commerce gurus like Amazon might help them save costs. During this COVID epidemic, HBC’s strategy priority should be strategic alliances.
References
Rosa Saba (2020). Hudson’s Bay announces new online strategy to double product assortment almost overnight: The star https://www.thestar.com/business/2020/11/17/hudsons-bay-announces-new-online-strategy-to-double-product-assortment-almost-overnight.html
Karen Pauls (2020). Hudson’s Bay Company has 350 years of history — but does it have a future?: CBCNews https://www.cbc.ca/news/canada/manitoba/hbc-350-years-history-1.5569656
Brett Bundale (2021). Hudson’s Bay launching online marketplace, adding third-party sellers to its website: TheCanadianpress https://www.ctvnews.ca/business/hudson-s-bay-launching-online-marketplace-adding-third-party-sellers-to-its-website-1.5333295
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