How the Digital Experience Played Out

The digital business went gangbusters this year, but it hasn’t been a cure-all for the collapse of nonessential brick-and-mortar retail due to the pandemic.

The costs of fulfilling and shipping online orders were high and continue to be, and return rates, particularly on fashion items, are in the 30 percent range.

Those hefty double-digit gains on web sites frequently cited by retailers haven’t been enough to fully offset the loss of store revenues. What’s more, for some consumers, the online experience leaves them cold and wanting for in-person interaction.

From July to September, consumers spent $199.44 billion online with U.S. retailers, up 37.1 percent from $145.47 billion for the same quarter the prior year, though down about 1 percent from the second quarter this year, according to the Commerce Department. That meant nearly $1 in every $5 spent came from orders placed online during the third quarter.

In 2017, e-commerce sales accounted for 9 percent of all retail sales in the U.S., a number that is expected to reach 12.4 percent in 2020, according to Statista.

For 2021, retailers face two critical questions — whether at some point, perhaps after mass COVID-19 vaccination is accomplished, will shoppers feel safe enough to return to stores. And second, to what degree consumers shift permanently to shopping more online, after getting into the habit of it in 2020.

Nevertheless, the key to survival is prioritizing and investing in digital operations. Essentially that boils down to elevating the convenience factor — providing speedy delivery, an enhanced mobile experience; options on ways to pick up packages, and easier, quicker web site navigation, selection and transaction.

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It also means personalization, which makes it easier for customers to shop online and feel more like the retailer knows and cares about them.

Finally, the pandemic and the stay-at-home lifestyle have necessitated significant merchandising shifts on web sites to casual clothes, ath-leisure, home furnishings and decor, home office equipment, health, beauty, wellness, jewelry, sneakers and other categories consumers have gravitated toward. And away from special occasion, evening and tailored clothes.

Retailers, of both the essential and nonessential type, partnered up with third-party services that can deliver packages on the same day the order is placed. Macy’s in October partnered with DoorDash to offer same-day delivery from more than 500 Macy’s and Bloomingdale’s locations and online. PetSmart, 7-Eleven, Walgreens and many restaurants are also among the growing list of retailers enlisting DoorDash. Earlier in the year, Macy’s rapidly rolled out curbside pickup and pre-pandemic established “At Your Service” counters inside stores where shoppers could pickup online orders as well as make returns.

Kohl’s has provided contactless drive up as well as in-store pick up of online orders this season, and has said it can have tens of thousands of items available for store pick up within two hours. Kohl’s associates will put orders in the trunks or backseats of cars.

Target proved to be ahead of the game by disclosing a deal to buy Shipt at the end of 2017, and rolling out the service beginning in 2018. Shipt is a membership-based grocery marketplace and same-day delivery platform with tens of thousands of “personal” shoppers fulfilling orders from various retailers and delivering them within hours.

Saks Fifth Avenue did a web site overhaul to make digital shopping easier and capitalize on a growth category. The revamped site, completed in October, has propped up men’s wear, a best-selling area, with a men’s homepage that leads to a designated men’s section. So if Saks has a consumer identified in its database as a men’s wear shopper, when they log onto, the men’s homepage pops up. If they’re a women’s shopper, the women’s homepage pops up. And if Saks has no information on the shopper, the women’s homepage pops up since most who venture onto are shopping for women’s wear. In addition, by being re-platformed with Salesforce Commerce Cloud, captures more data on users, leading to messaging that furthers personalization.

By being re-platformed with Salesforce Commerce Cloud, can capture more data on users, leading to messaging that furthers personalization.

“We really redesigned the site for fashion, personalization and ease,” Saks Fifth Avenue chief marketing officer Emily Essner said in a recent interview.

It’s been particularly important for Saks to enhance its web site to offset, as much as it can, declines in brick-and-mortar stores since it has been very dependent on its flagships in Manhattan, Beverly Hills and Bal Harbour, Fla., among other units in its fleet, which has been hurt this year by temporary closures, tourism declines, and people being reluctant to shop indoors, fearful of contracting the coronavirus.

Saks executives tell WWD that it has experienced “double-digit” increases online this year, though they decline to be more specific.

“It’s very much on par with competitors,” said Essner, when asked what percentage of Saks Fifth Avenue’s total volume is generated online. At Neiman Marcus, Saks’ most direct competitor, digital represents about one third of the overall sales volume.

Meanwhile, Neiman Marcus Group has been touting substantial e-commerce gains by staging more than 150 virtual events since April, many with designers such as Brunello Cucinelli and Victoria Beckham, and through its Connect digital clienteling tool, used by Neiman’s 60 digital stylists, 200 digital client advisers and 4,000 sales associates. It enables them to strengthen service and customer relations and communicate more effectively in different ways, provide consulting on styling and product arrivals, and show fashion photos. Connect also provides more robust information on shoppers and what they’ve purchased and are inclined to purchase.

“We really want to get to the next wave of digital,” said NMG’s chief executive officer Geoffroy van Raemdonck. “It’s not about saying digital is another channel and helpful in a pandemic. For me, digital is a channel for richer relationships and service, curation and scale.…We will continue to invest in the Connect tool. Connect provides our associates with incredible leverage.”

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