According to comScore, consumers spent $186 billion online in 2012—up 15 per cent from 2011. That number is predicted to reach $1 trillion by 2016. With today’s retail landscape shifting toward omni-channel shopping experiences, physical retailers are longing to get a piece of the pie. Brick-and-mortars are dreaming up new ways to not only compete with online behemoths like Amazon and eBay, but also learn from their strategies.
Over the past few decades, online retail has displayed distinct advantages over physical stores—like commitment to experimentation, dependence on powerful analytics, and use of data to understand customer behaviour—which can be replicated and applied in the offline retail world.
Coupled with the tactile, physical experience of shopping in brick and mortar stores, online tactics have the ability to elevate the shopping experience for greater customer satisfaction and retail strength.
But this shift requires more than just new strategies; it takes people to make these changes come to life. We’re seeing a new trend in offline retailers recruiting talent with online experience, creating new leadership roles to lead the change.
John Koryl, the new president of Neiman Marcus Direct, was previously with eBay and SVP of e-commerce at Williams-Sonoma. While he was hired to focus on online growth, Koryl’s online expertise and dedication to data positions him well to strategize how Neiman Marcus’ exceptional online service should seamlessly connect a shopper’s in-store and online experience.
Karen Katz, president and CEO of Neiman Marcus stated Koryl was a perfect fit for the direction that the company is attempting to go because of his focus on technology and analytics. In the online world, 80 per cent of websites use Google Analytics to understand consumer behaviour and justify their decisions instead of simply using their intuition. Koryl’s role with Neiman Marcus further suggests that brick and mortar retailers are looking for leaders to bring the data mentality to physical stores.
At first, Macy’s didn’t want to embrace the digital revolution. However, according to a study in 2011, Macy’s found that every dollar that it spent online directly influenced $5.77 spent in the store over the next 10 days. Macy’s understands the symbiotic relationship between its online shopping platform and its physical stores, and that understanding spurred the company to create new roles.
Robert Harrison was appointed Chief Omnichannel Officer—the name in itself demonstrates Macy’s commitment to bridge the offline and online retail experiences—where he oversees the systems and technologies, logistics and related operations the chain uses to manage strategy. His main focus is to understand and promote the online and offline channels to work together.
Previously the chairman of Macys.com, Macy’s has also named Peter Sachse Chief Store Officer. Sachse’s successful techniques in the online space are being transferred to Macy’s physical locations. He is in charge of design and store layout, making physical changes to better shoppers’ in-store experience.
Jamie Nordstrom, great-grandson of the retailer’s founder, views Amazon as Nordstrom’s greatest competition and is willing to employ creative and disruptive strategies—like offering customers a highly personalised shopping experience as well as introducing new tablet device strategies—to heighten the Nordstrom brand.
Kirk Beardsley, the former director of business development at Amazon, joined Nordstrom as VP of e-commerce at Nordstrom Direct. utilising an Amazon trait uncommon with most offline retailers, Nordstrom spends heavily on long-term projects. In 2012, Nordstrom unveiled a plan to spend around $1 billion over five years on technology and e-commerce—double the amount Nordstrom allocated for those areas a year before.
As the founder of Raspberry Red, a consulting firm focused on digital strategies and web marketing, Arnold P. Cohen has been a forerunner in helping companies with their online strategy—increasing visibility through branding, merchandising, operations and ecommerce. Cohen joined Cache as Executive Vice President and Chief Marketing officer.
Cache’s CEO Jay Margolis stated, “Aligning marketing and online under one team with a clear omni-channel approach is an important step in reaching our long term goals,” demonstrating the company’s desire to use online techniques offline.
The connection of the physical and virtual shopping experience is inarguable, and major retailers are beginning to understand that by improving one, you improve the other. Retailers are personalizing the shopping experience to connect with shoppers and build brand loyalty. E-tailers have a leg up on personalisation, with online analytics providing targeted offers, but consumer apps and analytics around foot traffic and in-store behaviour are helping brick and mortars catch up.
At this point, it is still too early to measure the effects of this transition, but it is obvious that integrating the techniques of online retailers is not an option, but a necessity. Physical retailers that refuse to use analytics to gauge their effectiveness in connecting with their customers through experimentation and personalisation will be obsolete, simply because basing business decisions on hunches and intuition is a faulty practice. The success of retailers now lies in their ability to integrate online and offline efforts, and use all resources available to make more educated decisions.
About Will Smith
As CEO of Euclid, Will leads the company’s drive to answer retail’s toughest marketing and operations challenges with unprecedented insights into real-world shopper behaviour. Will’s roots in the retail world run deep—his grandfather was an innovator in shopping centre development and one-time chairman of the International Council of Shopping centres. Will worked as an analyst at Citigroup and Thomas Weisel Partners and holds a degree in International Relations from Stanford.
Business Insider Emails & Alerts
Site highlights each day to your inbox.