Hot Topic: Everything About The Music

Hot Topic: Everything About the Music

Hot Topic was founded in 1989 in Westminster, California as a store specializing in accessories. In 1990, they added rock tees which at the time could only be found in catalogs, small record shops and at concerts (Hot Topic, 2006). By 1994, their assortment of merchandise was 50% apparel and 50% accessories. Hot Topic evolved into a retailer geared towards customers "who are passionate about rock music, pop culture, and music-inspired fashion" (Hot Topic, 2006). Hot Topic operates 748 stores in 50 states and Puerto Rico and was named one of Fortune Magazines best 100 companies to work for in 2006 (Hot Topic, 2006). This organization shows how a specialty retailer that targets young consumers can remain successful despite the rapidly changing nature of pop culture trends.

SWOTT

Hot Topic has many strengths including nationwide locations, a large quantity of stores that carry exclusive clothing lines such as Lip Service and Eye Candy, and their user-friendly, interactive website (Hot Topic, 2006). Their primary audience consists of 12 to 22 year-olds and they are known well throughout the Goth/Raver/Punk community (Hot Topic, 2006). Catering to this age group helps Hot Topic with their sales immensely. According to Global Information Inc, 15-24 year old teens were the top consumers for 2005 (Consumer Demo, 2005).

Their reputation as the go-to place for alternative youth culture may come from the line of clothing they offer, but it also stems from their specialized staff and website. Hot Topic works hard at hiring people who can portray the store's cutting edge image. Because of this effort, the staff is able to offer advice for how to wear or use any item the store carries. Their website is also a source for advice on how to put the whole look together as well as stay abreast of the newest fads in fashion. In addition to clothing, Hot Topic also carries a specialized selection of music, magazines, toys, shoes, accessories, and novelty items. One of their greatest strengths is their ability to cater to any "fashion fad".

With these advantages one might think that they have the market cornered, but a few things hurt the retailer. One of their major weaknesses is the fact that Hot Topic gears merchandise so heavily towards one style of audience. They might do this to keep existing customers returning, but for a store to grow it must embrace other areas of its related business field. They do have a sister company by the name of Torrid which is aimed at a plus size audience that has similar taste in the gothic look, music, and punk related clothing. This limited scope of consumers can stifle Hot Topic's profits and growth.

Another weakness is that their products can be more expensive than other stores such as Rave, Fashion Nation, or even online stores such as Spooky Boutique. Due to the age category Hot Topic targets, consumers may find it difficult to buy a pair of shoes that can be as expensive as $120. This can be a deciding factor for their online store as well. Competing stores available on the web may offer a better price, and Hot Topic may find that their prices drive people to continue shopping elsewhere. However, their mall locations are not limited by this option. The biggest obstacle that they face is where they are located inside the mall. Hot Topic explains how their first store location had to overcome a bad location decision to successfully reach their customers (Hot Topic, 2006). A store front that is not easily accessible could be overlooked by shoppers.

Even with these limitations Hot Topic does have opportunities to grow. They can look into branching into another area. Hot Topic goes to great lengths to gather input from customers about what they would like to see in stores (Hot Topic, 2006). One page of their website is called Community. On this page customers can go into areas where they register for contests and give customer feedback. By providing this section, they are able to gather information about their supporters. Information such as state, gender, age, and other items are entered into a database through filling out a contest or feedback entry. This information aids Hot Topic in creating projections and census for their consumers and allows them to provide better service for their customers.

Despite these assets, Hot Topic has seen failing profits over the last year and must find new ways to regain profit margins (Hot Topic, 2006). They are primarily driven by fashion and music fads. Their most powerful strength is that they are able to embrace these fads and turn them into a profit. If they are able to stay on top of the music and fashion industry, they will have a continued future in retail.

Strategic Planning

Strategic planning determines three things for an organization. First, it tells the organization where it is going over the next year or more. Second, it explains how it is going to get there. Finally, strategic planning allows the organization to know whether or not it has achieved its desired outcome (Banyenzaki, n.d., para. 4). The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program (High performance coaching, 2005). When Hot Topic first came to life it was not as successful as what the founder, Orv Madden, had hoped for (Hot Topic, 2006). However, with a bit of strategic planning, his company would soon be moving forward into a future of net profit rather than net loss.

The plan was to change the location of the store within the mall in order to facilitate the needs of the consumers and then to reevaluate what merchandise was and was not selling (Hot Topic, 2006). The company found that costume jewelry was making the profit, so they started buying more cross necklaces, unisex earrings, and leather bracelets (Hot Topic, 2006). Once the problem areas were located, the company was able to brainstorm on a new strategic plan on how to advance with a better outlook for the success of the company (Hot Topic, 2006).

Tactical Planning

Tactical Planning is "a set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization such as a functional area like marketing" (Bateman, Snell, 2007, pg.123). Tactical Planning for Hot Topic was definitely a part of the organization's success. The organization needed to take steps on relocating their first store in order to make their business profitable (Hot Topic, 2006). Once the store was relocated, it was time for the company to think of expanding their product line as well as their