Great article on further blurring of the lines between online and BAM shopping – and how to make it work effectively using shoppers current habits.
Shoppers are really leading the way, it is just up to retailers to listen, take note and action what might already be working for them.
Thanks to Mike Farely for forwarding this article to me.
Customers may shop online while in store
By Jayne O’Donnell and Laura Petrecca, USA TODAY
By Paul J. Richards, AFP/Getty Images, Updated 11/24/2011 8:18 PM
A tablet-toting Macy’s salesperson ordering a diamond necklace with a Macys.com app — for a customer standing in a Macy’s store.
Walmart shoppers pulling up maps of their neighborhood store online — so they can better navigate the aisles to grab the best in-store Black Friday deals.
Toy-seeking parents ordering Lets Rock Elmo from Toysrus.com — yet heading to the physical store to pick the gift up.
The boundaries separating online and in-store shopping are fast dissolving.
Consumers are increasingly doing online research before they head out for holiday gifts. When they get to stores, they’re pulling out smartphones and tablets to compare prices and read reviews.
For their part, retailers are both pushing people to their websites — so they can cut back on in-store stock expenses — and using Web-based initiatives, such as free Wi-Fi, to keep shoppers in their stores.
Online and offline experimentation will be omnipresent this holiday season, as retailers and consumers both try to figure out the most effective way to shop.
“One of our major strategies is to let (multiple shopping channels) blend together,” says Martine Reardon, Macy’s executive vice president of marketing and advertising. “My challenge is to give shoppers that great experience from every channel.”
There is much at stake for the retailer who can’t figure out how to integrate online and in-store shopping. Those who have slow-to-load websites, don’t offer helpful apps or aren’t optimized for digital and mobile devices could lose customers this season, experts say.
Underscoring the importance of retail websites: Thanksgiving Day online sales were up by about 20% over 2010 by noon PT, according to the Web analytics company IBM Coremetrics. Also, shoppers were using mobile devices more often to visit — but not necessarily buy from — a retailer’s website Thursday, Coremetrics said. The share of consumers using mobile devices to visit a store’s site was up from 4% to 16%, Coremetrics said. But the percentage using their mobile devices to make a purchase was unchanged at 10%.
Many retailers are dawdling, some even stumbling, when it comes to courting increasingly tech-savvy shoppers, based on new data from Web analytics firm Compuware Gomez.
Less than half of the top 30 retailers have iPad apps, and none have websites that are specifically optimized for the iPad. Three-fourths of the top U.S. retailers are not meeting shoppers’ expectations that mobile Web pages should load in five seconds or less, according to Compuware.
“Retailers don’t appear to be investing enough to capture that market,” says Steve Tack, Compuware’s chief technology officer for application and Web performance.
Dissatisfied consumers could quickly move on to competitors at a time digital sales are one of the few bright spots in holiday retailing, Tack says.
November and December online sales (excluding travel) are expected to grow 16.8% from last year to $46.7 billion, research company eMarketer says.
Yet, overall holiday spending, including in-store purchases, is expected to be tepid, rising 2.5% to 3.5% from last year, according to industry predictions tracked by eMarketer.
Technology shifts behavior
The day after Thanksgiving should be renamed “Cyber Friday” instead of “Black Friday,” given the growing influence of shopping on computers and mobile devices, say researchers at Northwestern University’s Kellogg School of Management.
“Technology is quickly making new norms possible,” says Richard Wilson, a marketing professor and a director of the Kellogg Center for Global Marketing Practice. “Pervasive digital data plans and in-store Wi-Fi are enabling shoppers to do it all at once, to combine off-line and online excursions together.”
One in four consumers “frequently” or “always” use a mobile device to compare prices while shopping in a store, a new Kellogg study shows. Nearly two-thirds said they do so at least “occasionally.”
Nearly half of smartphone and tablet users plan to make holiday purchases with a mobile device this year, according to a study conducted by Ipsos for PayPal.
The uptick in online shopping is good news for retailers: The holiday shopper who uses multiple channels — such as online, mobile and in-store — will spend 22% more than people who shop only in stores, says NRF spokeswoman Ellen Davis.
There are several factors affecting the increase, Davis says, including more merchandise options available through multiple channels and the convenience of online shopping.
Online sales for Black Friday 2010 were $648 million — a 9% rise from Black Friday 2009, according to Web tracking company ComScore.
The trend will ramp up on Monday, traditionally dubbed “Cyber Monday” for online deals offered to holiday shoppers. More than 90% of Web retailers planned to offer special promotions over the Thanksgiving weekend and nearly 80% will have deals on Monday, NRF says.
Online sales broke the $1 billion mark for the first time on Cyber Monday 2010, which was up 16% from Cyber Monday 2009, ComScore says.
Most people don’t solely shop online or only shop in a store, Reardon says. They pick and choose the channels based on what fits in their lives.
Her goal: to let shoppers know that Macy’s can meet their holiday needs, whether it’s in physical stores, at Macys.com, on a Macy’s app or another Macy’s-branded avenue.
“All I care about is that they (consumers) are engaging with the Macy’s brand — whether they choose to do that online, on the desktop or on their mobile device while walking the store,” she says.
Walmart has a similar stance. Its holiday plan is to provide a “seamless experience” for the online, mobile and in-store shopper, spokesman Ravi Jariwala says. With its range of initiatives — which include new tablet apps and giving Walmart.com users sneak peeks of in-store specials — “customers can shop Walmart when, where and how they choose,” he says.
Macy’s is increasingly giving tablets to clerks to search online inventories through a Macys.com app. Customers can view and order merchandise that may be out-of-stock or not sold at a local Macy’s.
On Tuesday, Scott Parent, a Macy’s manager in the Burlington, Mass., store showed customer Terri Pecorelli a coffee maker via the tablet app. That same day, Parent used his tablet to pull up details on Macy’s Black Friday deals for customer Michelle Mabardy.
Sears and Home Depot are handing out tablets to their staffs, too. Employees at about 450 Sears stores have been equipped with tablets to help bolster customer service. Those employees are able to easily check online product availability and to show videos that demonstrate how certain products work.
Home Depot has distributed 30,000 Motorola mobile computers, with bar-code scanners and cameras, to sales staff in its nearly 2,000 stores. Cara Kinzey, Home Depot’s information technology chief, says the devices let clerks check inventory, provide product information, print labels, communicate with other associates, even check out customers with debit or credit cards from anywhere in the store.
“It not only makes us more efficient, but also enables us to take our customer service to the next level,” Kinzey says.
Other ways retailers are merging online and offline:
•Providing free Wi-Fi. Retailers including Sears, Macy’s and Nordstrom have rolled out free in-store wireless. Through that service, iPad and other digital-device-wielding shoppers can easily check online product reviews and compare prices at other stores.
•Allowing online orders with in-store pickup. Retailers such as Walmart, Sears, Kmart and Toys R Us let shoppers select products online, then pick up the goods at a local store.
•Offering similar online and in-store deals. A shopper doesn’t have to feel left out by not getting up at 4 a.m. to hit a local store for specials. Some retailers, such as Toys R Us, are offering the same Black Friday deals both online and in-store. Shoppers can pick whatever shopping method best suits their needs, Chief Marketing Officer Greg Ahearn says.
Savvy strategy for stores
While consumers are clamoring for more digital shopping options, retailers’ efforts to merge online and offline worlds are about more than customer satisfaction, retailing experts say. It’s more efficient for retailers to limit the inventory they keep in stores, says retail branding and design expert Ken Nisch. Distribution centers allow retailers to ship directly to stores or to online customers. That reduces the need for markdowns at stores where products didn’t sell, as well as the cost of shipping products between stores.
“Online is not a default mechanism for the failure of bricks-and-mortar stores to satisfy the customer, but a complement,” Nisch says.
It will soon be part of the expected shopping behavior to have receipts e-mailed and to book appointments with retailers online, says Nisch, chairman of retail branding and design company JGA.
Stores also hope to be able to remove a lot of signs in favor of QR codes that can be read with mobile devices and quickly translated into multiple languages, says Nisch.
While digital shopping has many benefits, Macy’s Reardon says, “I think the customer loves both experiences — loves to shop online and absolutely loves to come in the store. You want to feel the energy of the holidays.”
Contributing: Hadley Malcolm