Traditional retailers are refining their use of online browsing history and social media to reach customers and personalize their shopping experiences.
But much work remains to be done to put shopper data to best use, and engaging customers with company values is becoming more important in the new era of social activism, speakers said at the 22nd Annual Global Retailing Conference, hosted by the University of 蜜柚直播鈥檚 Terry J. Lundgren Center for Retailing.
Lundgren, retired CEO of Macy鈥檚 and a UA alumnus, said despite the onslaught of online sales, nine out of 10 purchases are still made in a brick-and-mortar store.
鈥淲e certainly see a trend toward online shopping, but it鈥檚 going to go from 10 percent to 11 or 12 percent, its not going to go to 50 percent overnight,鈥 Lundgren said in an interview.
Some major retailers have driven online sales higher by using online data and channels to drive sales anywhere, anytime.
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For most people these days, the shopping experience starts on their smartphones.
鈥淭he way consumers are clearly shopping is they鈥檙e starting the search for the product they鈥檙e interested in with their phone or mobile device and they鈥檙e searching, whether they want a shirt or jacket or whatever, they鈥檙e seeing what their options are,鈥 Lundgren said, 鈥淏ut the large, large majority of them are then going into a physical store and making the transaction there.鈥
Leveraging vast amounts of customer data now available from online retail sites and social media, retailers are targeting shoppers like never before.
Wonder why you got that popup ad for shoes?
鈥淲hen you purchase an item, we can go to our site and find another 500 customers who purchased that item and what they purchased next, and then what they purchased next after that,鈥 said Lundgren, who retired as CEO of Macy鈥檚 last year. 鈥淪o we can kind of get a feeling for what you might like, by the way your purchase pattern looks like others.鈥
SELLING SOCIAL
Prominent American designer Kenneth Cole said his company recently revised its business model, closing its outlet stores to focus on its online and third-party sales through department stores like Macy鈥檚, Dillard鈥檚 and Nordstrom. Kenneth Cole Productions still has a full-price retail store in New York City.
鈥淚n this new sharing economy you ride in other people鈥檚 cars, stay in other people鈥檚 homes, but the good news is, you鈥檙e still buying your own shoes,鈥 Cole said.
But online, Cole said, 鈥淵ou have to have the ability to react overnight, and it has to be a dialogue, not a monologue.鈥
To stay relevant either online or as a store, it鈥檚 now more important than ever for retailers to engage customers at a social level, he said.
鈥淲e鈥檙e talking to people about not only what鈥檚 on their body but also what鈥檚 on their minds,鈥 said Cole, whose longtime social activism has included advocacy for AIDS sufferers and the homeless.
Cole encouraged the more than 300 conference attendees, including about 80 UA retailing students, to participate in the 鈥渦nprecedented鈥 wave of social activism, pushing back against racism and sexism.
鈥淏usiness should engage in this new activism,鈥 he said. 鈥淪itting on the sideline is no longer an option 鈥 today, you either have the courage to take a stand or you have to step aside.鈥
FROM WEB TO STORE
Several other speakers at the two-day conference said they are deep into efforts to leverage online consumer data and create new ways to reach customers at every step of the shopping process.
Tony Rogers, chief marketing officer for Walmart U.S., said the world鈥檚 biggest retailer is trying to link online shopping with the in-store experience and is essentially turning each of its stores into distribution centers for its online business, recognizing that for many customers, shopping starts with a smartphone.
鈥淲e are tied to our phones 鈥 it鈥檚 just 24/7,鈥 Rogers said.
Walmart鈥檚 new in-store pickup service, which allows customers to buy online and pick up within seconds via a growing number of self-service, automated 鈥減ickup towers鈥 at their local stores, has been a tremendous success, he said.
The company plans to expand the pickup-tower concept to 2,200 of its 4,700 stores this year, in the name of customer convenience, Rogers said, citing the growing number of households where every member works and many have second jobs.
鈥淵ou can see where people need to save time and save money, and we鈥檙e focused on both,鈥 he said.
Walmart is expanding its online-based grocery delivery service from six pilot stores to 100 nationwide this year.
鈥淚t鈥檚 a process of 鈥榯est and learn鈥 鈥 we鈥檙e trying all kinds of stuff,鈥 Rogers said.
Meanwhile, Macy鈥檚 has been refining its marketing strategy to use customer data to 鈥渘arrowcast鈥 its message to 鈥渄igitally retarget鈥 consumers, said Rich Lennox, chief marketing officer for the retail giant.
That refinement eventually creates a 鈥減ull鈥 effect to attract sales, as opposed to ubiquitous and sometimes obnoxious 鈥減ush鈥 advertising, Lennox said, adding, 鈥淣o one is waiting for our marketing to interrupt their lives.鈥
While Macy鈥檚 has been closing stores after suffering declining sales, Lennox has worked to build on its longstanding brand loyalty with a new marketing push targeting fashion-minded consumers and its top customers.
Lennox credited a long-term ad campaign launched last October and a new fashion-focused site, Macy鈥檚 Presents The Edit, along with new perks for Macy鈥檚 Star Rewards customers with turning around 11 straight quarters of falling sales at the end of 2017.
CRUNCHING NUMBERS
Meanwhile, luxury retailer Neiman Marcus has embraced online sales, which now comprise about 35 percent of the company鈥檚 total revenues, said Karen Katz, who recently retired as Neiman鈥檚 CEO.
Already focused on personalized service for its affluent customers, Neiman has launched a new system that gives salespeople on the floor instant access to customers鈥 shopping and personal preferences.
Neiman Marcus, which launched a mobile-payment app with Capital One in 2015, is looking to expand mobile-payment options to make purchases 鈥渇rictionless,鈥 she said.
鈥淭hat鈥檚 the wave of the future, those kinds of things that make shopping easier but really resonate with customers when they come into the store,鈥 Katz said.
Several speakers expressed the growing need for data-analytics experts to help refine retailers鈥 marketing strategies.
Lundberg noted that Macy鈥檚 and other retailers are busy hiring computer scientists, including Ph.D.s, to help them make better use of mounting volumes of customer data.
鈥淐onsumers today have much higher expectations, they鈥檝e risen dramatically,鈥 Neiman鈥檚 Katz said.
鈥淚 think we can use data to be better merchants, to be forward-thinking about what we鈥檙e going to buy.鈥
Contact senior reporter David Wichner at dwichner@tucson.com or 573-4181. On Twitter: @dwichner. On Facebook: