The Changing Landscape of Retail and Management
Since the early 2010s, in-store retail experiences have noticeably deteriorated, from department stores and drugstores to supermarkets and superstores. Shoppers frequently encounter understaffed stores, locked-up products, and an increasing reliance on self-checkout kiosks.
These trends have led many customers to feel unwelcome. The COVID-19 pandemic exacerbated these issues, accelerating store closures, cutting resources, and lowering product quality.
The Rise of Financially-Driven Leadership
Traditionally, retailers were led by merchants—industry professionals who built their careers in sales, merchandising, and product development. These leaders understood trends and consumer behavior. However, after the Great Recession, corporate boards turned to financial experts, consultants, and tech executives to navigate turbulent times.
The expectation was that these "outsiders" would bring fresh perspectives and implement cost-cutting strategies to improve profitability. Unfortunately, this shift often resulted in short-term financial gains at the cost of long-term brand value. Companies like Nike, Barnes & Noble, and Gap suffered from misguided strategies that alienated their core customer base.
A Return to Merchant Leadership
In recent years, there has been a notable shift back toward leadership with deep retail expertise. Companies like Abercrombie & Fitch, Gap, Barnes & Noble, and Victoria’s Secret have appointed executives with backgrounds in merchandising and product development. This return to fundamentals suggests that a successful retail strategy requires more than financial efficiency—it demands an understanding of consumer engagement, in-store experience, and brand identity.
Case Studies in Retail Revitalization
Two of the most striking retail turnarounds have occurred at Barnes & Noble and Abercrombie & Fitch.
Under CEO James Daunt, Barnes & Noble has moved away from centralized decision-making and empowered store managers to tailor their selections to local consumer preferences. This shift, inspired by independent bookstores, has revitalized the chain by making each location feel unique and community-focused. The company has also embraced social media trends to drive sales and in-store engagement. As a result, Barnes & Noble has opened new stores and seen increased foot traffic, proving that brick-and-mortar bookstores can thrive with the right approach.
Fran Horowitz took over a struggling Abercrombie & Fitch and repositioned it for broader appeal. By giving more authority to merchants and buyers, the brand has been able to respond quickly to trends and shift its image from an exclusionary teen retailer to a more inclusive fashion brand. The strategy has led to significant sales growth and a brand renaissance that few would have predicted a decade ago.
The Role of Brick-and-Mortar in the Digital Age
Despite the rise of e-commerce, brick-and-mortar stores remain a crucial part of the retail ecosystem. Physical stores offer advantages such as lower return rates, reduced fraud, and customer engagement that online retailers struggle to replicate. Additionally, the cost of acquiring customers through digital ads has risen, making in-person shopping more cost-effective in many cases. The success of companies like Barnes & Noble and Abercrombie & Fitch suggests that when stores are well-managed and offer meaningful in-person experiences, they remain highly competitive.
The Future of Retail Leadership
Retailers are learning that financial strategies alone cannot drive long-term success. Companies that balance financial discipline with retail expertise are better positioned to adapt and thrive. Leaders who prioritize customer experience, local engagement, and thoughtful product curation are proving that the fundamentals of retail still matter in an increasingly digital world.
In the Classroom
This article can be used to discuss management (Chapter 6: The Nature of Management) and retailers (Chapter 12: Dimensions of Marketing Strategy).
Discussion Questions
1. How did the shift from merchant-led leadership to financially-driven leadership affect the retail industry?
2. How has decentralization benefited both Barnes & Noble and Abercrombie & Fitch?
3. What are the advantages of in-store shopping that online retail cannot easily replicate?
This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.
Amanda Mull, "The Era of Finance CEOs Running Retailers Is Over," Bloomberg, January 14, 2025, https://www.bloomberg.com/news/articles/2025-01-14/why-abercrombie-and-barnes-noble-stores-are-doing-so-well
Daphne Howland, "Why Abercrombie & Fitch Isn’t Complaining About the Weather," Retail Dive, June 6, 2024, https://www.retaildive.com/news/abercrombie-merchandising-brand-turnaround/717708/
Phil Wahba, "Barnes & Noble CEO Says Retailer Is Expanding Again Thanks to Taylor Swift, Legos, and a Return to Bookselling Roots," Fortune, March 11, 2024, https://fortune.com/2024/03/11/barnes-noble-bookstore-amazon-taylor-swift-growth-retail/
Linda Ferrell is the Roth Family Professor of Marketing and Business Ethics in the Raymond J. Harbert College of Business, Auburn University. She was formerly Distinguished Professor of Leadership and Business Ethics at Belmont University. She completed her Ph.D. in business administration, with a concentration in management, at the University of Memphis. She has taught at the University of Tampa, Colorado State University, University of Northern Colorado, University of Memphis, University of Wyoming, and the University of New Mexico. She has also team-taught classes at Thammasat University in Bangkok, Thailand.
