Photo: RetailWire
Retailers are focused on crafting omnichannel shopping experiences. To do this requires investing in developing and integrating different channels. So their expectation is rightly that sales performance will improve, or at least holds the line. And yet, for most this doesn’t appear to be happening.
As reported January 6, 2017 on eMarketer, “Despite efforts to increase their online sales and beef up their omnichannel strategy to meet the needs of smartphone-toting and social-media addicted consumers, these retailers are burdened by their physical stores, which still represent a majority of their sales.”
Commenting on Nordstrom’s results on December 19 of last year, CNBC’s Jim Cramer suggested a reason for the struggles: “The better Nordstrom's website becomes, the less incentive you have to actually go to their stores. In other words, they are cannibalizing themselves.”
Mr. Cramer’s comments raise an overlooked challenge faced by retailers in many sectors. On one hand, the right thing to do for your customer is to serve them at any time they desire. On the other, you must invest in the capabilities to make that happen.
To recover their investments, retailers must increase their share of customer walletshare. This requires taking business from competitors, including Amazon, who are also investing in omnichannel capabilities.
Mr. Cramer suggests that, in at least Nordstrom’s case, the strategy of "selling more" (i.e. increasing the pie slice) with greater convenience and better service is not working.
This failure implies more must be done to understand customer purchase occasions to win unique online and offline sales opportunities. Drastically improving customer insight is one solution; paint a broader picture of individual customers beyond transaction histories and social media sentiments.
It’s an analytical problem with implications for the way a retailer markets, sells and services individual customers. But retailers today do have an opportunity to make use of historical, predictive, prescribed and real-time insights to orchestrate a customer experience that “lifts all ships” and creates incremental sales.
- The #1 question every retailer needs to answer in 2017 – LinkedIn
- Watch Customer Insights Grow with Big Data – YouTube
- Holiday Sales Trends Heighten Brick-and-Mortar Woes – eMarketer
- Cramer chronicles the decline of department stores, and how Nordstrom is ‘cannibalizing itself’ – CNBC/Yahoo! Finance
- Digital cannibalizing bricks-and-mortar sales, earnings: report – Luxury Daily
- Nordstrom’s E-Commerce Strategy: Failure or Success? – National Real Estate Investor