Tuesday, July 27, 2010

E-marketingclass: Department stores Delve into the Virtual

     E-marketingclass: Department Stores Delve into the Virtual

In the world of online retailing, Amazon reigns king. But, as the old game goes there's always someone pushing their way to be the new king of the mountain. This is the new way of online retailing, as seen in the Chicago Tribune article, "Stores try to blend real, virtual worlds: Retailers connect shoppers to out-of-stock items on Web" by Andrea Chang. Chang tells of how major retail stores like JC Penny and Macy's are now moving their customers to their online kiosks and high tech registers. This movement helps the stores with out of stock items that aren't readily available in the store and or different options, such as more size and color choices. Though department stores online retailing has a long way to go before they reach Amazon's status, their rapid growth is definitely a clear sign of something positive as Chang states, "Online revenue still accounts for a small percentage of total retail sales. Although online sales totaled $134 billion last year, the National Retail Federation estimates that's only about 7 percent of all retail sales. But growth has been rapid, with online sales soaring nearly 400 percent since 2000." Retailers are taking advantage of this growth, since it means less inventory needing to be in the store, as well as sales clerks. The growth is something retail stores don't want to lose; executives are constantly thinking of new ways to entice consumers whether with using e-commerce such as free shipping and a faster checkout. Companies don't want to lose out as Chang informs, "As e-commerce continues to grow at robust rates -- the sector posted a 10 percent year-over-year sales increase in the first quarter, according to market research firm ComScore Inc. -- experts have predicted that online sales could grow to as much as 30 percent of total retail sales over the next few decades." These numbers only justify that if retailers are going to continue, they need to adapt even further with their online presence, as well as continuously grow with ever changing e-commerce.

It will be intriguing to see how brick and mortar stores will have to change to the intangible of the internet. Many stores that have been recognized by their retail presence for decades, such as Macy's, now have to start from scratch when they enter the online market. Though retail stores have the crucial intangible asset of their brand name to work with, they still have to find out how to gain with online profits. Though retail stores have the right idea with introducing online kiosks in their stores so customers are able to have a choice if they want the physical store or the website, there still are a lot of unknowns they have to deal with. Aspects of customer service, returns, personal selling, and commission are all things that stores need to consider when incorporating a stronger online presence. As noted in Chang's article, Nordstorm was having problems with their customers having questions about the merchandise, therefore leading to them introducing a Web chat feature for shoppers to speak with informed specialists. Macy's has introduced a user "profile" where customers can store shipping and billing information, as well as receive special discounts and free shipping, while JC Penny's allows customers to view their store catalog online and to join their Facebook page. Though these are all good ways to get started the retailers need to think further of getting customers to shop at their website, and not at their competitors.

The best way retailers can get customers to their page is the use of e-commerce and e-marketing, with e-mail updates or utilizing the use of social media with Facebook and Twitter. Though some companies have already started using these they also need to think of other organic ways to entice customers so they can see how effective their marketing is. JC Penny's, Macy's, and Nordstrom's all have sponsored links on Google, but this isn't enough for the companies since they are already so well known, they want to add customer value to their website. Right now, all the retailers are at a "click and mortar" level, since they can't get completely rid of their stores they should not try to get to a pure play level where they're purely dot com. This is benefit to the retail stores where they can boast, unlike Amazon and Zappo's, customers can check inventory online and order something then pick it up in the store. This also helps retail stores since they typically having an older cliental, not of the "Google generation." Retail stores have the ability to segment themselves to all age levels, where computer savvy customers can utilize their websites, while customers who are more comfortable with going to the actual stores can be helped by the kiosks in place and customer service.

The crucial thing the retail stores want to do with their e-marketing is to set themselves apart from Amazon and other mega websites, they want to find a way to make a niche online. Retail stores want to utilize their business intelligence; they already know the fashion trends that will set them apart, now they need to find out the online trends that will place them as a forerunner. Though the stores want to be set apart from Amazon, they can observe what makes it such a major competitor from its one-click purchasing, deep discounts, large inventory, and fast shipping. Amazon's popularity clearly shows that this is what customers want. Macy's, JC Penny's, and Nordstrom's can all use these as a goal base for their websites, but then grow from them. They can use their traditional advertisers to see what new online markets are opening up for them to take advantage of. Such as, Macy's works with celebrities from Tommy Hilfiger, Martha Stewart, and Sean John that can all create special online events, such as chatting with the celebrities or offering unique brand specials other companies won't be able to offer. Stores can also turn themselves into "apps" for smart phones, where customers can see the newest trends or sales going on. They can also have a locator button so that customers can see how close they are to the nearest store. These are only some ways retail stores will be able to gain on the ever growing online retail sales.


 

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