STORES Magazine - October 2008 - (Page 34)

EXECUTIVE SUITE / SPECIAL REPORT continued from page 28 last years’ 6 percent share. While the sales pace has cooled a bit, this channel continues to best bricks-and-mortar retailing. In fact, some retailers admit they’d give their right arm to be able to post 5 to 7 percent quarterly gains. Online retailers attribute their ability to buck the trend to a combination of aggressive discounting and free shipping programs. At a time when filling the gas tank can seem like a Online retailers are also sweetening the offer by sharpening their pricing pencil. spending spree for many consumers before they even set foot in a store, the prospect of having an item delivered to their homes free of charge holds considerable sway. Free shipping offers now abound online, and experts forecast that, as the calendar moves closer to the all-important holiday selling season, websites that don’t provide free shipping (even if it comes with a minimumspend prerequisite) will be at a competitive disadvantage. Online retailers are also sweetening the offer by sharpening their pricing pencil – a strategy that is expected to chip away at the market share of traditional stores. In some cases, the discount is as little as 50 cents; in other instances, items are offered at a lower price for a small window of time. Regardless of the strategy, shoppers are clicking the “buy” button. Tweaking frontline strategies is not the only tactic e-commerce merchants have deployed to encourage online buying. Online retailers are also adding new technologies – some apparent to shoppers, others less so – in an effort to make their websites more customer-centric and, hopefully, more “sticky.” At No. 12 Macys.com, “searchandising” is being used to provide the most relevant response to customer inquiries. This next-level technology represents the convergence of navigation and merchandising functions, allowing online shoppers to get to the products they want faster. It also creates a deeper understanding of customer behavior – something that is keenly important to Macy’s. On the payments front, Gap Inc. unveiled new website functionality called “universality” that brings together its four brands with global navigation and a universal shopping cart. Customers can shop No. 27 Gap.com, BananaRepublic (41), Old Navy (11) and shoe site Piperlime.com, put items from 34 STORES / OCTOBER 2008 each store in a single shopping cart and purchase everything with one transaction. American Eagle’s ae.com added PayPal to its payment options, providing another level of flexibility. Using PayPal gives shoppers the option of paying for clothing and accessories using debit cards, bank accounts, stored balance or credit cards while protecting their financial information. Meanwhile, features including online customer reviews and ratings, online video and video-ondemand gained considerable traction over the last 12 months. Zappos.com (No. 39) sets the standard for online reviews; No. 13 QVC takes video-ondemand to a new level. Studying the list of online shoppers’ favorite retailers yields some interesting findings. Four retailers specialize in large-size apparel; considering this is a niche market, that’s an impressive showing. It’s likely that many large-size shoppers – still an underserved group despite growing numbers of people buying apparel in these size ranges – feel more relaxed purchasing online, as it provides anonymity and the chance to try clothing on at home. Home improvement retailers Home Depot and Lowe’s continue to win favor with online shoppers, who may be responding to the ever-increasing volumes of information available on their respective websites. Office supply retailers, however, are conspicuously absent. It’s interesting to note that Staples, Office Depot and OfficeMax are all among the top online retailers in terms of revenue — ranking second, third and sixth, respectively, according to Citigroup Global Markets report — yet none stand out among online shoppers as a particular favorite. The second-annual online favorite 50 produced its share of movement in the ranking and introduced some newcomers, too. Macy’s jumped from No. 18 a year ago, while NewEgg.com rose nine spots to No. 22. LaneBryant.com slipped nine spots to No. 28, and No. 40 Chadwicks.com fell 18 places. Newcomers included BananaRepublic.com, BedBathandBeyond.com and BarnesandNoble.com. So much about e-commerce has changed since its nascent days in the mid-1990s that credit ratings agency Moody’s recently announced that it would begin giving online retail sales and strategies more weight when it comes to analyzing the companies that play in that space. That’s welcome news to retailers like JCPenney and Target, which have already begun including online sales in their same-store sales figures. StORES WWW.STORES.ORG http://www.ae.com http://www.Zappos.com http://www.Macys.com http://www.NewEgg.com http://www.LaneBryant.com http://www.Chadwicks.com http://www.BananaRepublic.com http://www.BedBathandBeyond.com http://www.BedBathandBeyond.com http://www.BarnesandNoble.com http://www.Gap.com http://www.Piperlime.com http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - October 2008

STORES Magazine - October 2008 Contents Executive Editor's Page President's Page Force of a Different Collar What Shoppers Think Bagging the Competition 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Favorite 50 Sticky Strategies for Retention Concept2Watch Kiosks Online Business Intelligence RFID NRFtech Wrap-up E-Commerce Credit Warehouse Systems Logistics Selling Tools Supply Chain LOEB Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - October 2008

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