Tuesday, July 27, 2010

E-marketingclass: Department Stores Delve into the Virtual

In the world of online retailing, Amazon reigns king. But, as the old game goes there's always someone pushing their way to be the new king of the mountain. This is the new way of online retailing, as seen in the Chicago Tribune article, "Stores try to blend real, virtual worlds: Retailers connect shoppers to out-of-stock items on Web" by Andrea Chang. Chang tells of how major retail stores like JC Penny and Macy's are now moving their customers to their online kiosks and high tech registers. This movement helps the stores with out of stock items that aren't readily available in the store and or different options, such as more size and color choices. Though department stores online retailing has a long way to go before they reach Amazon's status, their rapid growth is definitely a clear sign of something positive as Chang states, "Online revenue still accounts for a small percentage of total retail sales. Although online sales totaled $134 billion last year, the National Retail Federation estimates that's only about 7 percent of all retail sales. But growth has been rapid, with online sales soaring nearly 400 percent since 2000." Retailers are taking advantage of this growth, since it means less inventory needing to be in the store, as well as sales clerks. The growth is something retail stores don't want to lose; executives are constantly thinking of new ways to entice consumers whether with using e-commerce such as free shipping and a faster checkout. Companies don't want to lose out as Chang informs, "As e-commerce continues to grow at robust rates -- the sector posted a 10 percent year-over-year sales increase in the first quarter, according to market research firm ComScore Inc. -- experts have predicted that online sales could grow to as much as 30 percent of total retail sales over the next few decades." These numbers only justify that if retailers are going to continue, they need to adapt even further with their online presence, as well as continuously grow with ever changing e-commerce.

It will be intriguing to see how brick and mortar stores will have to change to the intangible of the internet. Many stores that have been recognized by their retail presence for decades, such as Macy's, now have to start from scratch when they enter the online market. Though retail stores have the crucial intangible asset of their brand name to work with, they still have to find out how to gain with online profits. Though retail stores have the right idea with introducing online kiosks in their stores so customers are able to have a choice if they want the physical store or the website, there still are a lot of unknowns they have to deal with. Aspects of customer service, returns, personal selling, and commission are all things that stores need to consider when incorporating a stronger online presence. As noted in Chang's article, Nordstorm was having problems with their customers having questions about the merchandise, therefore leading to them introducing a Web chat feature for shoppers to speak with informed specialists. Macy's has introduced a user "profile" where customers can store shipping and billing information, as well as receive special discounts and free shipping, while JC Penny's allows customers to view their store catalog online and to join their Facebook page. Though these are all good ways to get started the retailers need to think further of getting customers to shop at their website, and not at their competitors.

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