While many retailers count their e-commerce sites as their largest store in terms of sales, few talk about the traffic imbalance, which is even more lopsided than dollars spent. Just look at Saks Fifth Avenue.
“Many more people now visit our Web sites than go to the entire store chain combined,” said Michael Burgess, president of HBC Digital at Hudson’s Bay Co. “For Saks Fifth Avenue, now 10 times as many people visit the Web site as go into all of our stores combined.”
Burgess said the “convenience equation” was shifting, with Web sites that are only as far away as one’s smartphone able to offer not only very wide assortments, but sharp prices.
“Many of the core reasons for the creation of the department store are now being challenged,” he said.
To differentiate the department-store shopping experience, Burgess said merchants can better link their online and offline operations, personalize offerings and develop marketing to better connect with customers on their own turf.
“The mobile tidal wave is actually massive,” he said. “It is sweeping across all of our businesses in ways that five years ago we just couldn’t dream of. And every year, we see so much more growth in these mobile channels that we have to keep innovating. We’ve built an entire technology organization around mobile.”
Retailers are working so hard to get their technology right, because they’re following shoppers as they go online.
Citing research from McKinsey & Co., Burgess noted that the portion of people buying apparel online went from 38 percent in 2010 to 45 percent in 2011.
He estimated that now, 70 to 80 percent of people are buying apparel online.
“That puts us right up with where electronics, computer hardware and software were just a few years ago,” he said. “We’re in a rapid acceleration mode for buying online for our categories.”