Macy's, Walmart still trying to balance in-store, online holiday sales

It's time to fully embrace merged channel

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Listen up, retailers: Your merged channel strategies should be about leveraging all channels in a way that makes the most sense for the shopper. They should not be an attempt to feed all shoppers into whatever channel you find the most profitable.

Evidence that this lesson hasn't been learned yet came last week from two disparate retailers, Macy's and Walmart.

First, Macy's CEO declared that the chain's stores still matter. What is remarkable about this is the fact that the CEO of Macy's felt the need to articulate it. It suggests that retailers' thinking about merged channel is still confused.

Second, Walmart said that 96% of its holiday deals will be offered both online and in-store, a figure that is up from 90% last year. That's a move in the right direction, but why is 4% being kept offline?

Let's start with Macy's. Here's what CEO Terry Lundgren had to say: "I very strongly believe that consumers are not only going to shop online, they’re going to start their journey on their phones, they’re going to enter our stores, they’re going to interact with our sales associates, learn more about product, try product on, feel the fabric. They may not buy it in store that day. But without that store interaction, it’s likely the sale would not occur."

Lundgren's point is on target and might even be a tad understated. It's not just that a store interaction will help push a sale. The fact that a local store exists encourages online sales — and the more local, the better. If something goes wrong, having the option of interacting with a person standing a few inches away becomes compelling.

There is also the social aspect, especially during the hectic, end-of-year holidays. Attempts to enable group shopping online, something tried by quite a few startups, have invariably failed. Why? Because each channel has its own strengths and weaknesses, and trying to make one channel all important is bound to fail. Online's strength is speed and convenience. The shared-shopping social experience is likely to remain tied to the physical store because there are few elements of retail that are more emotion-based.

Lundgren focused on how the physical can push sales online. That's true, but what should be happening is that all channels combine to offer shoppers a variety of ways to make purchases. You let people shop in a way that is most comfortable to them, at this time, for this purchase.

Mobile can aid in-store shopping (scanning barcodes, checking rival pricing), just as in-store visits can assist online buying (click to buy and avoid long lines). I have seen shoppers using their mobile devices to call a chain's call center while actually standing in one of the chain's stores. They do that because it’s easier than finding a sales associate.

By the way, the difficulty of finding an associate to help is probably the biggest downside to store operations. Lundgren casually mentioned that "they’re going to interact with our sales associates," as though that were effortless. If he went into a busy Macy's store incognito, I think he'd find that associates are much harder to locate than he thinks.

But to really drill down into this merged channel fear, we need to look at the world's largest retailer, Walmart. From the Associated Press: "This year, Wal-Mart Stores [are] giving those who would rather shop on their couch in P.J.s more access to Black Friday sales. Most — about 96 percent — of deals offered this holiday will be offered both online — starting at 3:01 a.m. E.T. on Thanksgiving morning — and in stores — starting at 6 p.m. on Thanksgiving Day. That's up from 90 percent last year. The company will also be offering all the deals at one time, rather than spreading them out for limited times at different parts of the shopping day."

Let's break this down into the two key points: 96%, up from 90%; and all deals at once, rather than scattered throughout the day.

Walmart should be applauded for putting more of its sales in both of its prime channels, but why not all? The strategy needs to be "We just want to make the sales. We really don't care which channel is used." I've always found channel-preference strategies bizarre, as though a store manager would give preferential treatment to shoppers who entered through the north entrance rather than the south entrance. It shouldn't matter how they buy from you, as long as they buy from you.

The rationale for the 4% being exclusively in-store is to reward shoppers who brave the elements, the parking lots and the lines. Why? If they prefer to shop in-store — and there are many reasons for having such a preference — they don't need those in-store-only specials as incentives. And why prevent online shoppers from taking advantage of those (presumably profitable) holiday sales?

That said, moving all sales online at once is a note of sanity from Walmart and its online operation. If the sole objective is making sales, what's the point of forcing shoppers to repeatedly return? The only reason I can think of is to help out Amazon, which has opted to sell toys for children, rather than to toy with shoppers for the evil fun of it.

I keep going back to the theme sounded by the man who must be considered the founder of Christmas: Treat others as you would want others to treat you. What would make you the most likely to make a purchase? If your policies would annoy and aggravate your family when they're shopping, that tells you everything you need to know.


Copyright © 2015 IDG Communications, Inc.

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