Macy’s, Sears and JC Penney’s are closing dozens of store locations. Others will follow. So the question arises: Can stores use digital tech and e-commerce to save themselves? The value of their real estate, alone, certainly incents them to highlight their stores, instead of just selling online.
Some it is pure proximity. Target’s biggest advantage is that 50 percent of Americans live within four miles of a Target store. Even if customers are ordering online, 80 percent of the orders will be picked up at a store.
With that in mind, Target is working to make its stores “hyperlocal shoppable destinations.” It is remodeling hundreds of stores for “inspiration and ease,” and using digital and ecommerce to enhance their appeal via Pinterest groups, online ordering, store pickup and other digital features.
CEO Brian Cornell acknowledged, however, that Target had recently pulled back from its highly vaunted “Store of The Future,” (SOTF) an all-encompassing lifestyle concept. SOTF may have had long term potential, but was too far afield. “Investments have to impact our business in the next two or three years,” said Cornell. “Innovation has to be realized inside the core business.”
Williams-Sonoma CDO/CTO John Strain noted that stores remain a big part of the omni-channel experience and delivering “multi touch attribution” and ROI. “Stores are always the #1 or #2 customer acquisition channels,” said Strain. “In-store is an experiential story” — where customers may, for instance, use complementary services like mobile apps differently than when at home.
Williams-Sonoma’s Pottery Barn brand recently launched 3D Room View, which allows customers to position various home furnishings in a computer-modelled room. 3D images of 80,000 SKUs have been generated for the project. “We are taking a longer-term perspective,” Strain said. “We are going to get to a point where in-home consultants can look in a customer’s eyes and say ‘This is how it can look.’ We’ll focus on the assets, while Google and others will focus on other things.”
Staples is also focusing on creating an omni-channel marketplace. For Staples to win, it needs to re-envision itself as “an extension of its customers’ office” rather than as an online retailer, said CTO Faisal Masud –a former Groupon executive. It needs to make transactions seamless, and simultaneously act as “a performance center, a showcase, an office and a drop-off and pickup location.”