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Worldcrunch

Retailing In The Age Of E-Commerce: Department Stores' New Everywhere Approach

Department stores executives are realizing that only a smart digital strategy can guarantee a future for them. The necessity of 'omni-channel' retailing progressively became obvious for these city-center venerable institutions.

Article illustrative image Partner logo Printemps, in Paris (Frdrique Panassac)

PARIS - Last January, at the National Retail Federation conference, everyone was talking about "omni-channel" retailing. But what is it? We have come to know the term "multi-channel" retailing, which consists in selling products on the Internet as well as in shops. Now omni-channel retailing aims at taking advantage from all available means for shopping: stores, mobile phones, computers, catalogues, and so on.

It should be noted that august institutions like the French store Printemps, founded in 1865, or the Japanese Daimaru, born in 1717, come up against fierce competition from e-commerce. This can be compared to what department stores had to face in the 1970s when mega-retailers began to boom. Tsutomu Okuda, leader of J. Front Retailing, the Daimaru parent company, didn’t hide the truth: department stores’ sales dropped by 30% within a 20-year span in Japan.

“Click and collect”

These chains know that their future lies in omni-channel retailing. The best example is John Lewis, a British firm that makes 22% of its sales online. It has been rewarded as the “best e-commerce website of Great-Britain,” ahead of Internet-only players, and is considered the most successful example of this kind of 360-degree strategy.

Andy Street, the company's production manager, explains the formula: to have as many products online as in physical department stores, to resist an escalation of discounts, and the possibility to withdraw the products from both the 29 higher-end John Lewis stores and 194 Waitrose hypermarkets that belong to the chain.

This is “click and collect” - a very good way to get people in the stores.  Thus, Internet becomes a way to create a link, which can strengthen thanks to the improved contact with the stores themselves.

But according to Bernie Brookes, CEO of Myer, an Australian department store chain, omni-channel retailing also represents a challenge concerning the way to rule the different shopping channels. It also raises the question of the optimization of the stores’ surfaces.

Robert Wallstrom, CEO of Saks, thinks that the main difficulty is to “offer customers a unique experience” at stores, and to give priority to services. Indeed, adds Andrew Jennings, German CEO of Karstadt: “customers know all the products and prices nowadays. Their expectations are higher. They take the control.” 

Read the original article in French

Photo - Frédérique Panassac

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About this article source Website: http://www.lesechos.fr/

France's top business daily, Les Echos covers domestic and international economic, financial and markets news. Founded in 1908, the newspaper has been the property of French luxury good conglomerate LVMH (Moet Hennessy - Louis Vuitton) since 2007.

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