Written by Bryan Pearson, Forbes Contributor, Published in Forbes.com on November 30, 2016
Like swimsuits marked 70% off in October, third-quarter retail sales were a little short when it came to brick-and-mortar stores, yet long in revealing the problem spots for major retailers.
Among those spots are online sales, which will evidently play a larger role in determining how well retailers perform through the holidays. The earnings reports of several major merchants showed that even when beating Wall Street estimates, brick-and-mortar stores are seeing declines due to online competition.
Wal-Mart, Nordstrom, Target and Macy’s are among the chains that reported their online sales outperformed receipts at brick-and-mortar stores. Among result highlights:
- Wal-Mart Inc., which acquired Jet.com in September, posted a 6% increase on global online sales. Sales at stores open at least a year, or same-store sales, rose 1.2%, an eyelash short of the forecast of 1.3%.
- Upscale department store chain Nordstrom reported sales at Nordstrom.com rose 20.1%. Same-store sales rose 2.4%, boosted by the chain’s annual Anniversary Sale. (Combined second- and third-quarter sales rose 0.4%.)
- Target’s same-store sales dipped 0.2%, while digital sales grew 26%. Target has been focused on spurring e-commerce sales specifically to better compete against Amazon.com.
- Macy’s said same-store sales fell 3.3%, below expectations. While the chain does not specify online performance, Macy’s said sales at Macys.com and Bloomingdales.com grew in the double digits, according to Internet Retailer.
- Same-store sales at Kohl’s declined 1.7% during the quarter, slightly better than expected, according to Seeking Alpha. The value-priced department store chain plans to open a fifth distribution center dedicated to online orders.
4 Ways Online Can Lift In-Store
While the total sum of online sales may be small compared with in-store revenue for many retailers, the consistent difference in numbers spells out a trend. And canny retailers are taking advantage of the online attention, using their digital showrooms as portals to the store.
Here are four ways retailers are using or can use their online presence to direct shoppers into their stores.
(1) Buy online, pick up in-store.
Several retailers, including Macy’s, Kohl’s, J.C. Penney and Nordstrom, now offer an option to buy online and pick up the item in-store. Nordstrom’s “BOPIS” feature invites shoppers to choose a location and place an order. Within an hour, it will send a confirmation. The customer can then pick up the purchase at the chosen location. This is among the most straightforward ways to get a shopper into the store. If the sales associate pulls a couple accessories that complement the purchase (socks to go with a pair of shoes, or a necklace to brighten a dress), they could add incremental sales.
(2) Make them winners.
Retailers can promote online contests that require the winner to pick up the prize in-store. A social media sharing contest, or submission of photos wearing the retailer’s clothing in creative ways, are among the kinds of competition that could be considered in this instance. Or, to maximize the shopper turnout, the retailer can host an online drawing that rewards a select number of entrants with shopping sprees. Chances are each shopper will spend slightly more than the prize amount. And the added bonus: Winners could be encouraged to share their experience online, with the promise of reward points or a coupon.
Crate & Barrel’s Ultimate Wedding Contest invites couples to send in their best engagement photos and stories, which are posted on Crate & Barrel’s Facebook pages. Those who gain the most likes win a $500 undisclosed wedding prize. Operators of similar contests could reinforce the in-store connection by inviting entrants to shoot selfies in the actual stores, possibly near items on their registries.
(3) Place exclusives on shelf.
Retailers can use their online stores to promote exclusive, limited-time products available only at brick-and-mortar locations. Macy’s and Target, which excel at exclusive designer relationships, could leverage these partnerships to introduce new items that may complement online selections, but are available only at the store. IKEA does this well. While it offers many products online, a good deal of its attractive furnishings, such as its popular VOLFGANG dining room chair, can be purchased only in its stores.
(4) Make the shopper part of the experience.
Retailers strive to deliver great experiences that wow the shopper, but there’s also an opportunity for shoppers to wow each other. Using its website or social media platform to announce its plans, a food retailer can offer prepared packages of food-bank-friendly groceries that can be added to the grocery bill. Once the kind consumer makes the purchase, the donation is left for collection.
Other retailers can sponsors similar acts of charity. A mass merchant can offer toys for families in need during the holidays, or offer the purchase of clothes to donate to local homeless shelters. By encouraging shoppers to purchase and donate pre-selected merchandise to neighbors in need, retailers support a sense of community and charity while enhancing sales.
As we head through the fiscal fourth quarter and toward the holidays, efforts like these could help retailers boost in-store activity in tandem with online sales and heightened brand awareness. These efforts also could help merchants to identify those problem spots that are somehow disrupting sales.
For the original article, please visit http://www.forbes.com/sites/bryanpearson/2016/11/30/retail-clicks-beating-bricks-4-ways-to-recover/#44dc56235cc1