Brick & Mortar Chains Aim High Online
In today’s multi-channel retailing world, there certainly isn’t anything unusual about traditional brick & mortar stores achieving significant growth online. In fact, chains including Staples, Walmart, Sears, Best Buy, Macy’s, Costco, J.C. Penney, Gap, Target and Williams-Sonoma are among the biggest e-tailers in the world.
Heading into the holiday season, store-based chains have continued to perform well with Walmart, Best Buy, Target and J.C. Penney following Amazon as the online sales leaders on Black Friday, according to Experian Marketing Services.
According to the consumer shopping and tracking app company Slice, Walmart.com saw its daily average spend dip slightly on Black Friday versus last year, but achieved year-over-year increases Saturday through Monday. Walmart grabbed five percent of the daily share of online spending for each of the four days from Black Friday through Cyber Monday. In 2011, it achieved a four percent share on three days and two percent on the other.
Discussion Questions
Where are the greatest opportunities for brick & click retailers to grow their e-commerce businesses? Which traditional retailers have impressed you most with their online operations?
Retailers that make the online/offline experience seamless for consumers will see the greatest benefits. Buy online, return in-store. See in-store, buy online. Research online, buy in-store. It shouldn’t matter.
Why should consumers see Walmart online any differently than visiting a Walmart store? With the dawn of same-day delivery, the online and offline experiences will become even more inexorably linked.
The opportunity starts when they stop thinking in terms of channels and create seamless interfaces, whether in-store, computer-assisted and/or mobile app driven.
Once that’s achieved, think of the partnership possibilities that get created, including (but by no means limited to) “pop-up” virtual e-partnerships that may only last for a season or even an event.
If I was looking at best practices, I guess I’d be forced to sign on to the list of the usual suspects, but nobody has really blown this opportunity out as completely as they could have.
Using Walmart and others in the electronics channel as good examples, offering periodic “Online Only” deals, rewards the online shopper and in many cases achieves an incremental sale or even an incremental shopper in the process. Simply replicating the in-store offerings online is yesterday’s news.
Accordingly, traditional bricks and mortar stores will be well served to devise an online strategy which focuses on those categories of product that lend themselves best to online purchases. Apparel, electronics, sporting goods, and even some specialty retailers have the best opportunity to develop steady e-commerce growth.
Food retailers and others that sell product that involves visceral interaction are somewhat handicapped in that much of what they sell is prompted by in-store merchandising, aromas, and presentation that prompt impulse sales. For those retailers, identifying categories of product that are conducive to online sales such as shelf stable product, remains their gateway into e-commerce.
For those retailers, it will require marketing incentives in-store touch points, (kiosks), to offer easy access to deals on those products that perhaps fall into the “long tail,” and not offered on the shelf on an everyday basis.
All in all, no matter what retail channel you operate within, a cogent e-commerce strategy will ultimately be the difference between being relevant to shoppers … or not.
For the store centered retailers (Bricks), the way to drive more business is to make sure that the mobile/web and store shopping environments are integrated. A #1 area to integrate around is price. The millennial and the traditional shoppers are centered on price.
#2 to integrate on is selling. All retailing platforms, from the mobile “screen” to the associate on a store floor, must be selling to the shopper—zooming in on their needs or desires. Last—deliver! Make the product available at the time the shopper wants it. Does this mean synch the supply chains or does it mean plan and assort better? Each retailer has their challenges.
Some real online/store/and mobile winners this year for me have been The Home Depot, REI, and Macy’s. They all know their shoppers and are making the shopping process seamless across all the selling platforms. How do I know? They are eating up my “fun” money and my wife is either online at their sites or at their stores. My new son-in-law (pure Millennial and big on mobile shopping) found his first artificial Xmas tree at the Depot—after doing an online comparison on price and select manufacturers and social feedback.
Consumers see one retailer—in many places. Brick & click venues are not separate in the consumers’ eyes. For retailers to be effective they also need to view all channels as one store—the way consumers do. This is one more push to break the silos.
Comparison shopping through smartphones is driving a lot of this growth. I agree that Home Depot is doing a very nice job of personal, customized communications based on profile. Give kudos to Sears leveraging what is in my Wish List to provide offers pre-Black Friday to encourage purchase, with successful conversion.
Seamless—true. Having the predictive tools leveraging the data is key to optimize against potential and deliver offers that will drive response profitably and not discount to identified customers that will convert without an offer or not as deep of a discount, or drive cross-shopping into categories not visited/converted before.
The growth of brick into click is a threat to pure play web. Forcing pure play web to give shipping away for free and hoping that by offering better value at a higher average spend—and adding more items to the basket—the giveaway of shipping will be offset.
I think the biggest thing brick and mortar retailers could do is offer in-store training on their web and mobile apps. I read that the average age of a Facebook user is 22; this is who your social media effort is reaching . They are not the target market with the big bucks. To reach the big spenders, the online channels have to reach the 40-50 year olds. Training along with store kiosks would go a long way to attracting those shoppers.
Best opportunity for brick and click retailers is their reputation. Many retailers have grown into e-commerce. Their reputation is their best asset. Their retail store presence creates consumer confidence. Transfer that to the e-commerce level and you have a winning combination.
Micro Center is one of my favorite brick and click retailers. They have an amazing online presence, good pricing and unbelievable service on both sides.
Developing an animated interactive virtual tour of an actual store complete with online real-time digital assistance will greatly enhance the experience of shopping online with traditional desk and laptop devices. The newer technology devices would get an up lift with a voice interactive virtual associate that can take you where you need to be to get what you want. The technology for these designs is here and affordable, yet relatively unexplored by those that need to be in it up to their necks.
For the mass retailers like Walmart, Target, and Penney’s, the opportunity is great. You can go to their website and chose not only inexpensive items, but a wide variety of items.
If they haven’t already done so, they need to get on board with allowing users to create a profile and publish their wish list so they can send the list to others and also allow others to search for their list.
People like me avoid stores and traffic as much as possible. But I also like the deals that companies like Walmart, Target and Penney’s have to offer.
Although price transparency may be be putting pressure on omnichannel retailers to maintain uniform pricing across all of their channels, we believe that there exist opportunities for the use of channel-specific promotions. Displaying the same list price on and offline does not mean that the consumer has to pay the same total price (including shipping etc.) across all channels. For example, free shipping may be a good offer online, but offline it is almost expected (i.e. a consumer may expect free shipping if a product is out of stock in the store). In addition, we believe consumers are much more likely to accept inequitable pricing across channels if it is presented through channel-specific offers, such as “Like us on Facebook to get $10 off online” or “Sign up for our email newsletters to get 10% off your next online purchase.”
Additionally, I think there are also opportunities for same-day shipping on products that may not be available when the consumer is shopping in the store. This is a way to make showrooming work to the retailer’s advantage. For example, the shopper goes online, selects the product they want, and the store finds it in the inventory of one of their local stores, and either ships it directly to the shopper at work or at home, or to one of the stores for pickup at a prescribed time.
I see two areas for growth. First is the ability to sell to customers where there is no store. With a mobile society, the ability to keep shopping at your favorite store after you move is a key driver. Second is depth of product line. Only so many items will fit on the shelf.
Local merchandising requires the chain to handle a greater product line than in any one store. Offering the complete or even an expanded product offering online should increase sales.
The first opportunity is in keeping the customers you already own. To do that, start by leveraging your historical knowhow regarding what people buy, why they buy it, and how they use it at the local level.
Turning insights into actions will not be easy, nor will being in a fast follower industry during times like this be easy. I’d say leverage your place in the local economy and find new ways to insert yourself in the local loop—in a multichannel way (since that is the context of this question).