Omnichannel Retailer of the Year – 2017 Finalists
While many of the biggest chains are closing stores, Amazon.com Inc. is opening them and in its own unique way. The until-recently web-only retailer’s Prime membership network and the whole host of data it has on its customers has the potential to bring together the offline and online worlds in a way not many others can. Its recent foray into physical bookstores are a refreshing take, as it’s able to use what it knows about customers in a certain area to provide a limited but curated selection of books it’s confident customers in that area will love. Reviews are prominently displayed to in-store shoppers, and—in a move likely further expand Prime membership rolls—Prime members get the best prices in stores. It’s also testing unique takes on the physical convenience stores and locations for grocery pickup—two strategies that, if they catch on with consumers, have the potential to shake up the physical retail world as much as Amazon has the online one.
Best Buy Co. Inc. “gets” omnichannel. The retailer has, as part of the Renew Blue transformation program it kicked off in 2012, made operational, technological and service-level improvements to accelerate online sales growth and better satisfy customers across channels. As e-commerce’s share of Best Buy’s sales has inched upward—it now accounts for 13.4% of domestic revenue—Best Buy worked to make those sales more profitable. For instance, it incorporates store inventory into online fulfillment. It also offers customer-pleasing same-day delivery in some markets. Best Buy’s “anywhere, anytime, anyhow” approach also shines through in its communications with customers. Its TV ads around the holidays showed consumers conveniently completing their holiday shopping on their phones and in store. And while store sales have been flat—which is actually a positive when compared to many major retail chains—its omnichannel efforts are helping propel it to greater profits, with net income up more than 35% last year.
Many major retail chains fulfill online orders from stores. But few have figured out how to do it so effectively that the results show up on the bottom line. Footwear retail chain DSW Inc. is an exception, as it has said that its store fulfillment strategy—which has been in place for around three years, much longer than many other store-based merchants—is helping to increase profits. “As our brick-and-mortar locations fulfill as much as 40% of digital orders, we have started to shift inventory out of our fulfillment center to better serve the customer while improving inventory turns and increasing profitability,” chief financial officer Jared Poff recently told analysts. “We continue to increase operational efficiencies with our proprietary order-routing algorithm optimizing fulfillment.” The ability to execute on key omnichannel strategies will likely be a deciding factor in the future of retail chains’ businesses. DSW gets a win on this one.
This JustFab-owned athleisure brand and web-only retailer co-founded by actress Kate Hudson in 2013 made its first move into the physical retail world with the opening, beginning in late 2015, of 18 physical stores. As a sign of how effectively the merchant has blended its online and offline assets, in less than two years Fabletics has announced plans for 12 more. Its custom-built OmniCart technology allows in-store customers to easily check order history, add items to their online shopping cart or update their account information. It also tracks all items a customer brings into a fitting room and which ones she deems too big or too small, so that the retailer can track a customer’s interactions with each product. Several of Fabletics stores track how many customers stop in front of a display and for how long, allowing the retailer to create heat maps that show how consumers move through its stores. The technology can even track how many shoppers take the next step of trying the item on in the fitting room and how many eventually buy it.
The Home Depot Inc. has long been at the forefront of omnichannel innovation. That includes launching buy online, pick up in store in 2011, expanding its offerings to include ship to store and, most recently, introducing buy online, deliver from store. The latter was rolled out to all of its stores in the fourth quarter of 2016, allowing shoppers to have online orders delivered from a store near them in as little as two hours for an additional fee. The merchant also has one of the more user-friendly and innovative mobile apps of all the major chains, as it senses the location of an in-store shopper and can direct him to the precise aisle and bin where his desired item is located. Home Depot, now the seventh-largest online retailer in North America—up from No. 43 five years ago—credits much of its growth online (and offline) to these types of features that link together its physical and digital presence.
Award Category Description: The retailer that does the best job of using its web and mobile assets to complement other selling channels, such as bricks-and-mortar stores, printed catalogs and TV shopping shows.