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  3. Shopping and the Internet, Making It Click[A]Terry Lundgren

Shopping and the Internet, Making It Click[A]Terry Lundgren

游客2024-04-17  21
问题                     Shopping and the Internet, Making It Click
[A]Terry Lundgren and Kevin Ryan know and like each other. But when it comes to the future of retailing the boss of Macy’s, an American department-store giant, and the chief executive of Gilt Groupe, an online retailer, disagree wildly. Mr. Lundgren remains a firm believer in an empire of bricks and mortar(实体店). Mr. Ryan is betting big on online-only selling.
[B]"It used to be mail-order catalogues killing physical stores, then it was TV shopping and now it is online retail," says Mr. Lundgren. Although he will not be pinned down on whether the Internet is a threat to shopkeepers or an opportunity for them,he is convinced that his chain is on the right path. Macy’s is embracing " omnichannel" integration, that is, selling stuff on television, through mail-order catalogues and online, as well as keeping its department stores. The company runs 810 shops across America under the mid-price, mid-market Macy’s brand and 38 more luxurious Bloomingdale’s outlets. Mr. Ryan argues that bricks-and-mortar shops are gravely threatened by Amazon and other online-only retailers, and says he can see " no evidence that there are big opportunities for traditional retailers in online retail. "
[C]Overall, retail sales in America are pretty flat, so the double-digit growth of online sellers is coming at the expense of physical shops. Amazon’s sales in the past year were $ 48 billion, compared with Macy’s $ 26 billion. Last year online sales in America reached $ 188 billion, about 8% of total retail sales. They are forecast to reach $270 billion by 2015. So far, Mr. Lundgren has good reason not to worry that the sky is falling. Most relevant for Mr. Lundgren’s debate with his friendly rival, online sales from the websites of Macy’s and Bloomingdale’s jumped by 40%. This reflects Macy’s efforts to expand its online business. It is building a new logistics(物流)center for online sales in West Virginia and expanding an existing one in Tennessee. And it is fixing a glaring flaw in its Internet-sales operation; until now online shoppers have only been able to buy goods in Macy’s warehouses; soon they will be able to order items from the stock of its stores.
Magic mirrors and Facebook friends
[D]Mr. Lundgren is keen to continue experimenting with ways to use the Internet. In 2010 Macy’s introduced a virtual fitting room where customers tried on digital representations of clothes through their reflection in a " magic mirror" and shared them with their friends on Facebook. " It didn’t work," admits Mr. Lundgren. So Macy’s is now trying out virtual models. With its thriving Internet business, Macy’s is ahead of many other retailers.
[E]Walmart, the world’s biggest, waited for a long time and hesitated over its online strategy until it finally decided to " make winning of e-commerce a key priority" , as Mike Duke, its chief executive, puts it. Like an increasing number of store chains, Walmart is inviting online shoppers to pick up their purchases from its physical stores if that suits them. Since last June they have been able to do so on the day they place their order. Now, says Joel Anderson, who runs the company’s online business, more than half of Internet orders are collected from stores. The company claims this is saving shoppers millions of dollars in delivery charges. In spite of these recent improvements, Walmart is not yet reaping big profits from its online business. It does not break out its Internet sales from the total, but they are still tiny for its size.
[F]There are some retailers, in particular those at the extremes of the market, that can safely ignore the threat from shoppers’ migration to the Internet. At the luxury end, Yves Saint Laurent is unlikely to start selling its ball gowns over the net; at the cost-conscious end, dollar stores will continue "piling it high and selling it cheap". But the vast majority of retailers in between may have little choice but to counter the rise of online-only rivals by creating strong Internet operations of their own. The biggest threat to most of them is Amazon, the undisputed champion of online selling. Other online-only retailers have little chance of felling this giant. Their best bet is to be distinctive.
[G]Mr. Ryan’s Gilt Groupe is modeled on France’s Vente Privee, an online shopping club for expensive branded stuff at reduced prices. The customers’ average age for Mr. Ryan’s business is 34. Consumers aged 24 to 35 already do about a quarter of their shopping online, says John Deighton of Harvard Business School. In Mr. Deighton’s view the Internet-retail revolution is over, in that online buying is well established and will only keep growing. However, he says it is unclear how important a sales tool social networks like Facebook and Twitter, to which some online retailers are pinning their hopes, will turn out to be.
[H]Some bricks-and-mortar retailers have already had disappointing experiences trying to sell through social media. Over the past year GAP, J. C. Penney and Nordstrom have opened and closed storefronts on Facebook. The social-networking site, which this month filed for an IPO(首次公开募股), is trying hard to be a top shopping destination for its 845m members. Yet so far people still tend to visit Facebook to socialize with their friends. Shopping by smartphone
[I]What does seem clear is that as personal computing goes mobile people are buying more via smart phones. Four years ago hardly anyone bought things on their mobile devices but today nearly one-quarter of Gilt Groupe’s revenue comes from smart phone shoppers; on some weekends the proportion reaches 40%. Nearly one third of people living in America own a smart phone, and 70% of these use it to do searches while they are inside a shop, usually to compare prices. "By 2014 mobile Internet will overtake desktop Internet usage for shopping, " predicts Nigel Morris, chief executive of Aegis Media Americas.
Order online, pay cash in store
[J]The most clued-up shopkeepers realize that they must make the most of such advantages over online rivals, and that to do so they must make their stores more enjoyable places to visit. In 2010 Macy’s company launched a training programme for its more than 130,000 sales people, "MAGIC Selling" , which coached them to be more helpful and friendlier with customers. It is tailoring the merchandise stocked in its stores more closely to local tastes. Retailers with lavishly furnished stores and helpful assistants will increasingly have to put up with free-riders who come into the shop to check out the products and get some advice, before sneaking away to buy them for less online.
Have you got this in my size?
[K]However, there is no single recipe for retailing success in the Internet age. Retailers will need to balance their investment between staff, locations, inventory and online operations, says Jose Alvarez of Harvard Business School. For some expensive products it makes sense to have a low inventory, a big investment in showrooms, elaborate online operations and well qualified sales people. For more commoditized items it is more important to have a big inventory than a flashy display. Things that are increasingly being bought online must be swept off the shelves to make way for products that people still want to examine and compare before buying.
[L]Whatever priorities retailers set, their physical stores are likely to shrink as the share of sales made online keeps rising. The retailers who will survive the drift online are the ones " listening to the dynamic demands of customers," says Walmart’s Mr. Anderson. [br] Mr. Lundgren believes at present physical stores are threatened by online retail.
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