Retailers Beef Up Omnichannel Business Women`s

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EARLIER AND EARLIER
Black Friday Becoming
Less of an Indicator
By DAVID MOIN
BLACK FRIDAY isn’t what it used to be.
Once considered the kickoff for holiday gift shopping and a bellwether for the season, retailers now
see less volume potential on the day and don’t read as
deeply into the results.
This year, enthusiasm has waned and retailers have
themselves to blame, at least partially, for the new
reality. They’ve already blitzed consumers with preThanksgiving deals and doorbusters, thereby extending the holiday season, and they’re keeping their doors
open on Thanksgiving Day in record numbers, sucking
some wind out of the next day and the weekend.
The bigger picture is that business has been erratic for fall so far, with shoppers generally holding
back, becoming more selective than ever, and feeling
cash-strapped despite lower gas prices as they contend with rising food and health costs.
Up to now, there’s been a ton of maneuvering.
Retailers have accelerated markdowns and unleashed new sales ploys and services, from free deliveries [even same-day in some cases] to faster checkouts and buying online for store pickup. It’s all about
capturing market share, beating last year’s numbers
at least by a point or two, and not relying so much
on any particular day, be it Black Friday or Cyber
Monday, to set the momentum.
So what’s to be expected from this Black Friday?
Another big but comparatively modest turnout in the
malls, judging by retailers and analysts who aren’t
particularly bullish. Between Thursday, Friday and
the weekend, retailers do hope to make up some lost
sales following the blizzard last week clobbering the
Midwest and part of the Northeast, and this week’s
rapid warm-up.
“If we get a good dose of cold weather it will go
a long way,” said Tony Spring, Bloomingdale’s chairman and chief executive officer. “We have done all
SEE PAGE 8
Age of Omnichannel
Arrives Across Retail
By RACHEL STRUGATZ
RETAILERS ARE at last beginning to flex their omnichannel muscles.
Omnichannel will become more than just an overused buzzword this holiday season. A series of technological advancements look to link the online and
offline experiences in a real way — and this means a
lot more than just arming sales associates with iPads.
Black Friday is expected to be less of an event
this year, as price promotions have started earlier
and earlier. Amazon and Wal-Mart unleashed holiday deals on Nov. 1 and, according to a study of chief
marketing officers conducted by BDO and Market
Measurement Inc., more than a third of retailers will
have offered the bulk of their holiday promotions by
the time consumers sit down to Thanksgiving dinner.
Online will also touch more than three-quarters of
all holiday shopping experiences, per research conducted by location-based mobile platform Retale. Of
those surveyed, 54 percent said they would shop both
in-store and online, 22 percent said they would shop
online only and just 24 percent said they will do all
shopping in brick-and-mortar stores.
Forrester expects online holiday retail sales to
reach almost $89 billion this year — $10 billion more
than the period saw last year — and comprising 14
percent of overall holiday retail.
Until now, the word omnichannel has largely referred to the ability to fulfill product demand through
any of a retailer’s distribution channels — and for
most firms that is still the case, according to Kurt
SEE PAGE 12
12 WWD WEDNESDAY, NOVEMBER 26, 2014
WWD.COM
Retailers Beef Up Omnichannel Business
{Continued from page one}
Kendall, partner and retail
strategist with Kurt Salmon.
This means that companies’ efforts center on satiating demand
for product, such as buying online and picking up in-store or
turning stores into warehouses
by shipping from stores.
The key this holiday season will
be to extend the in-store experience in a way that’s engaging to a
customer, as well as one that gets
them to come in and spend more
money. Given the plethora of price
promotions out there, retailers’
omnichannel efforts will stand out
this season only if they serve a purpose — whether it provides promotions targeted at a particular shopper or removes friction points from
the shopping experience, like at
Nordstrom or Rebecca Minkoff ’s
new Manhattan flagship in which
a shopper has the ability to flag
down a sales associate and swap
sizes without leaving the confines
of a dressing room. Even Twitter
said on Tuesday that it would start
to test its second commerce product, Twitter Offers, where advertisers could offer card-linked promotions that could be redeemed
in-store. According to the microblogging platform, advertisers can
measure return on investment
every time a redemption occurs,
whether on or offline.
Kendall won’t go so far as to
say that the term omnichannel
Rebecca Minkoff enters her phone number in the Connected Fitting Room
at her new Manhattan flagship, linking her session to her account to look at
what she tried on at a later date.
implemented similar technology, including the Connected
Fitting Room in the Rebecca
Minkoff flagship, which opened
earlier this month.
“You have to put something
in front of someone that actually has a value proposition,”
Steve Yankovich, eBay vice
president, innovation and new
ventures, said of Minkoff ’s flagship, located on Greene Street
in Manhattan’s SoHo neighborhood. “It’s the Uber-fication of
the retail shopping experience.”
Connected Fitting Rooms
’’
’’
My prediction is that everyone will
want this; every store will need this
kind of experience to compete.
— STEVE YANKOVICH, EBAY,
ON CONNECTED FITTING ROOMS
is overused — but “it’s certainly
used a lot.”
“Its uses reflect the importance to retailers of learning how
to operate in a new way. What
they haven’t learned yet is what
the new model is, and for lack of
a better word, they refer to this
as ‘omnichannel,’” Kendall said.
EBay is betting that the instore technology it will roll out
in Nordstrom stores next week
will completely transform the
way people shop. EBay already
Macy’s is the largest retailer to use
omnichannel initiatives.
Jose and Seattle, will pilot the
Connected Fitting Room, which,
instead of Kinect sensors and
RFID chips, will be equipped
with a laser bar-code scanner to
scan items manually. Yankovich
said the main feature is that
shoppers can initiate getting
help from an associate, ensuring
that one’s time in the dressing
room is maximized. And when a
shopper is done trying on, they
can request a sales associate
to assist with checkout (there’s
also an associate app that helps
establish a dialogue between retailer and consumer).
Target’s app now has indoor
mapping that shows where items
are located via pin so shoppers
can get what they want in-store
as quickly as possible in all of
its U.S. stores, and come Black
Friday it will offer more robust,
interactive maps that show where
sales and dealbusters are. On the
retailer side, the largest to embrace omnichannel initiatives
thus far is Macy’s, which revealed
a slew of digital-facing initiatives
in September. Buy online, pick
up in-store was rolled out to all
Macy’s and Bloomingdale’s doors
and both retailers have begun to
use Apple’s mobile point-of-sale
system, Apple Pay. Sephora has
started to use Apple Pay as well,
and mobile POS system Square
said it will start to use Apple’s
payment option next year.
Bryan Yeager, an analyst at
eMarketer, said this season will be
about building brand awareness
for payment options like Apple
Pay. Getting consumers to make
the switch from using traditional
credit cards to a mobile wallet
won’t happen overnight, and difficulties also loom for retailers,
such as incorporating branded
store credit cards and loyalty programs. He called this a trial year
for Apple Pay — projecting that
although 2015 will be a much bigger year for mobile payments, this
will be integral in getting initial
adoption from merchants and
consumers. Similar mobile payment options like Google’s mobile
wallet and Softcard, the joint venture between AT&T, T-Mobile and
Verizon, may have failed to gain
traction with shoppers in a meaningful way, but Apple’s brand recognition could likely change this.
If anyone can make mobile payments happen, it’s Apple.
“We can’t distinguish any
more what is a store sale or a mobile sale. It’s blurred. We know
customers are online shopping
and looking at specific items and
we know that same customer
used his or her Macy’s card to
are equipped with Kinect sensors that not only track every
item brought inside (via RFID
chip), but allow you to request a
different color or size (brought
over by a sales associate ASAP)
and even text yourself the items
you tried on so that you can purchase at a later date. All actions
are done through the mirror.
“Now, if you’re in a fitting
room and something doesn’t work
— unless you have a friend with
you, it won’t be as efficient. You’re
likely to put your clothes back on
and go out, and it’s unlikely you’ll
come back,” Yankovich said.
“Now the dressing room becomes
the place you experience all the
product that you want to spend
time on, and the success rate will
go through the roof. My prediction
is that everyone will want this;
every store will need this kind of
experience to compete.”
It will cause consumer expectations to skyrocket — and
Yankovich predicts that it will
become commonplace to be able
to request items via touchscreen
inside of a dressing room.
Another Rebecca Minkoff store
employing the same technology
will open in San Francisco later
this year and in Los Angeles in
the first quarter of next year.
Kendall acknowledged that
Minkoff is at the “forefront of
where the retail experience is
going,” but the industry is still at
the early stages of understanding
what the future of the in-store experience needs to look like.
Two Nordstrom doors, in San
use StepsAway to post in-store
events or tutorials to drive traffic.
The venture has raised $4
million in private investments
to date and will soon roll out in
additional locations.
This holiday season’s greater
push on omnichannel comes
when Black Friday and Cyber
Monday will garner more global
attention than ever before —
from London, where retailers
are joining the price-promotion
fray, to China, where Alibaba
will roll out aggressive marketing initiatives next week.
Just as Alibaba founder
and chairman Jack Ma said he
wants Chinese online holiday
Single’s Day to become a global
event — the one-day holiday saw
more than $9 billion in
e-commerce sales —
the same holds true for
Black Friday and Cyber
Monday extending their
reach to China.
For the first time,
Alibaba’s
recently
launched AliPay ePass
is pushing Black Friday
in China for its retailers in a big way, bringing
Chinese shoppers to U.S.
Black Friday — and working with select merchants
through partnerships
with Borderfree and
Shoprunner to help drive
traffic and sales from
China to the Web sites of
Target’s updated app has interactive store
Saks Fifth Avenue, Ann
maps, with a goal to make navigating easier.
Taylor, Gilt, American
Apparel, Aéropostale, Macy’s and
Shopping Center in Denver.
StepsAway, which only works Bloomingdale’s.
Black Friday isn’t entirely
in malls that opt in, lets consumers know about promotions via unknown in China. Chinese
their mobile device — but here’s consumers who have been shopthe catch: They can only be re- ping overseas are aware of it,
but ePass really wants to ramp
deemed in-store.
When a shopper enters a up the attention that American
mall, they’re redirected to e-commerce sites are given durlog on to the mall’s Wi-Fi and ing this period. It will use sevprompted to download the eral marketing channels to raise
StepsAway app. The user can awareness that the American
then select what type of pro- shopping season has begun.
Among the Alibaba channels
motions they want to see; it’s a
pull, not a push model, accord- that will promote the American
ing to Haims. So if someone sees blockbuster shopping days are
a deal for a Guess dress on the eTao, a shopping comparison
app, for instance, they have to site; G.TaoBao, the global TaoBao
go to the Guess store and pres- channel, and Alimama, Alibaba’s
ent this to a sales associate to digital advertising company.
These merchants will also use
digital red envelopes, a popular
way to attract Chinese consumers that’s a play on the red envelopes that are given out during
the Chinese New Year. Red pockets will be placed all over these
AMOUNT PLANNING TO SHOP
channels with specific deals and
IN-STORE AND ONLINE, AS CITED
shoppers can grab them, put them
in their account and use them at
BY RETALE.
check-out. Alipay will tap into direct marketing to reach account
access the special price.
holders and work with Alimama
“They are more likely to make to create social media buzz.
“The big difference [this
a purchase in brick-and-mortar
because they are there,” Haims year] is that in the past, people
said. He also thinks that the were aware of Black Friday or
app’s “pull” model takes away Cyber Monday almost by word
retailers’ worry that they’ll inun- of mouth, but this time, it’s being
date consumers with e-mail. “It’s focused on by the main player in
the customers’ choice to opt in the Chinese e-commerce marevery single time they walk into ket,” said Michael DeSimone,
the mall. The stores have a quali- ceo of Borderfree, a platform
fied customer because they are in that has five retail customers live
the mall and they [the shoppers] on the Alipay ePass solution.
He noted that the Middle
are pulling offers specific for
East — including Saudi Arabia,
something they are looking at.”
The single platform that cre- Kuwait and Dubai — has seen
ates and delivers promotions is huge growth when it comes to
all cloud-based, so retailers who purchasing from American ewish to post on the app don’t commerce sites. “It shows that
need any infrastructure to be ac- the world is aware that we’re
tive on the app. And for stores heading into a massive selling
like Sephora that don’t offer pro- season — even if it’s a market
motions, there is opportunity to that doesn’t celebrate Christmas.”
purchase the item in a store,”
Terry J. Lundgren, chairman and
chief executive officer of Macy’s
Inc., told WWD in September.
Through a partnership with
Shopkick and its ShopBeacon
technology, consumers shopping
in Macy’s that are Shopkick app
users will get more personalized
deals and discounts. Promotions
offered on the app are only redeemable while in-store.
Similarly, StepsAway ceo
Allan Haims wants to use mobile
to influence in-store purchasing
in the mall environment with his
three-month-old app that’s currently available in six shopping
centers across the U.S., including Twelve Oaks Mall in Novi,
Michigan and Cherry Creek
54%