Read the Case Study “OmniChannel Strategies of Top Retailers” on page 161-162 of your textbook. In a two-page essay discuss the convergence of E-Commerce and brick-and-mortar retail. What are the keys to succeeding with an omnichannel strategy; provide examples of how the companies mentioned in the Case Study are adapting their location strategies to remain competitive in the changing retail marketplace. Your essay should relate to concepts discussed in your textbook, as well as other scholarly resources.
Case Study From Textbook:
Case 3 Omnichannel Strategies of Top Retailers*
* Based on material from David P. Schulz, “The Future Is Now,” STORES Magazine, July 2015, pp. 54–56, 58. Reprinted by permission. Copyright 2016. STORES Magazine.
It’s no longer bricks-and-mortar versus E-commerce—omnichannel is the path to success. Consumers have myriad ways to shop, and retailers must keep up. “New [technology] tools transform the way consumers want to shop,” says Anne Zybowski, a vice-president at Kantar Retail. In response, retailers are re-thinking operations, from infrastructure and inventory systems to delivery and marketing. As measured by STORES’ annual “Top 100 Retailers” report, by Kantar, the evolution of retailing displays the survival skills of long-time firms. Chart-topping stalwarts—Walmart, Kroger, Costco, Home Depot, Target, Walgreen, and CVS—have maintained dominance by meeting consumers’ changing desires, including for online shopping and digital interaction. Amazon’s ascent continues, and although E-commerce has not proven to knock bricks-and-mortar off its pedestal, the old “location, location, location” mantra doesn’t carry the same weight that it once did. Instead, the two channels continue to converge: Store operators are seeing much digital success, whereas online merchants—including Amazon—are expanding with showrooms, pop-up shops, and other ways of meeting shoppers face-to-face.“Omnichannel remains aspirational. Today’s omni-shoppers know what they want,” Zybowski says, “retailers to offer whatever, wherever, whenever they want. When it comes to value, they want [to have] their cake and eat it too—they don’t expect to pay more for convenience.” The challenge is meeting consumers’ reset expectations. “Retailers must learn how to fundamentally transform their business models, ones built for maximum efficiency and scale, and transform them into more nimble, effective ones,” Zybowski adds. Tom Cole, of Kurt Salmon Associates, says mobile is key in omnichannel’s push to seamless consumer experiences, although the mobile transactions’ volume is still low. Retailers need to build to omnichannel via legacy systems already in place. “Omnichannel” is the new reality whether they engage or not. If you’re available where and when consumers look for you, great. If not, you lose to someone who is,” says Marge Laney, of Alert Technologies. “Online-only retailers lack the high engagement that the in-store experience can deliver. Offline-only retailers don’t deliver the comfortable experience that consumers utilize to make their shopping itineraries.Digital is the connective tissue between online and in-store,” says Claude de Jocas, intelligence group director for L2. “Stores have been cast as a liability in an Amazon era, but they’ve been making a comeback as something that’s critical to a retail strategy.” Nordstrom is advanced in all facets of its omnichannel approach. The retailer has nearly 1 million followers who can shop via Instagram; its network of fulfillment centers is growing. Nordstrom has also launched a “scan-and-shop” feature within its catalog app that links readers of the print catalog to E- and M-commerce sites. “We hope that scan and shop creates a more seamless shopping experience for our customers who enjoy browsing our catalogs but also enjoy the many benefits technology affords the experience to make it more personal,” says spokesman Dan Evans, Jr.
Nordstrom is also connecting with teen shoppers via digital mall Wanelo; and in spring 2015, it unveiled a test of a “click-and-collect” service that included curbside pickup. This complements a more traditional buy online, pick up in-store program that Nordstrom has had since 2008. A third service, TextStyle, was launched in late May 2015 and involves all of Nordstrom’s full-line stores; it allows customers to make purchases from their personal stylist or sales associate using text messages.