2018 edition omnichannel winners in u.s. e-commerce€¦ · shopping channel lines, and at least...

IR RESEARCH the global leader in e-commerce data

I N T E R N E TR E T A I L E R

Internet Retailer, a Digital Commerce 360 brand

IR Research visited 24 retail shops across nine categories to evaluate the omnichannel programs they have in place. Our scoring and analysis provides a snapshot of the more successful programs and highlights areas where more work is needed.

2018 Edition

OMNICHANNEL WINNERS IN U.S. E-COMMERCE

CHARTSStore pick-up rate picks up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

What omnichannel features do retail chains in the Top 500 offer? . . . . . . . . . . . . . . . . . . . . . . . . . 6

Overall omnichannel scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

What percentage of retailers offer which BOPIS features? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

What percentage of retailers offer which mobile features? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

What percentage of retailers have which omnichannel features? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Consumer insights: Omnichannel . . . . . . . . . . . . . . . . . . . . . . 19

OVERVIEW Putting omnichannel to the test . . . . . . . . . . 4The case for omnichannel . . . . . . . . . . . . . . . . 5The game plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9The big picture . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Buy online, pick up in store (BOPIS) . . . . 12A mobile snapshot . . . . . . . . . . . . . . . . . . . . . . . 15Omnichannel features . . . . . . . . . . . . . . . . . . . 17

SPONSORED Q&AKibo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

HOW THE COMPETITION STACKS UPAdult Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Beauty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Department Stores . . . . . . . . . . . . . . . . . . . . . . 37Higher-end Department Stores . . . . . . . . . 43Home Improvement . . . . . . . . . . . . . . . . . . . . . 52Mass Merchant . . . . . . . . . . . . . . . . . . . . . . . . . . 62Sporting Goods . . . . . . . . . . . . . . . . . . . . . . . . . . 68Teen Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74Web Mostly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

CATEGORY ANALYSISRoots in stores . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Web mostly: where click trumps brick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

CONCLUSION 96

ABOUTOur sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97The authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98IR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

OVERVIEW

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THE CASE FOR OMNICHANNEL THE GAME PLAN THE BIG PICTURE BUY ONLINE, PICK UP

IN STORE (BOPIS) A MOBILE SNAPSHOT OMNICHANNEL FEATURES

“We look at omnichannel as meeting customers on their terms,” says Scott Ross, senior vice president of omnichannel technology for home improvement retailer Lowe’s Cos. Inc. That “customer first” spirit also means that omnichannel services and tactics can change as customers’ preferences for shopping and buying change, he says. “It’s not static. That’s why the technology we build and put in place is designed to be flexible,” he says.

Easier said than done. It takes time, a carefully executed game plan and often ample cash to do omnichannel retail well.

John Stratford, senior vice president and general manager of online for Gap Inc., sums up the goal of omnichannel retailing nicely.

“When the customer takes his wallet out, you never want to give him a reason to put it back,” Stratford says.

Omnichannel retailing enables consumers to shop how, when and where they want.

Retailers that do omnichannel right make it easy for a consumer to shop for, buy, collect and return goods using any avenue she pleases—web, mobile web, app and store—and to cross channels (and maybe even cross back) during her purchase journey. It also means a retailer treats its company as one unit as much as possible. That could entail, for example, making all inventory—including products from any store or fulfillment center—available to any shopper regardless of how she is buying and the ability to pick up and return online orders at a store.

By Katie Evans

‘We look at omnichannel as meeting customers on their terms.’

—Scott Ross, senior vice president of omnichannel technology, Lowe’s Cos. Inc.

©Copyright 2018 Internet Retailer® (a Digital Commerce 360 brand) & Vertical Web Media LLC. All rights reserved. Data as of April 2018.

2018 OMNICHANNEL WINNERS IN U.S. E-COMMERCE

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The retail industry has been abuzz about omnichannel for a few years now. And it’s no wonder. Consumers are already blurring the shopping channel lines, and at least some retailers are seeing some positive business results from their omnichannel efforts.

Internet Retailer surveyed consumers in March 2017 and again in March 2018 asking whether they have purchased products online and picked orders up in stores. The number of shoppers who said yes increased four percentage points year over year, with 62% of consumers in the 2018 survey saying they had purchased a product online and picked it up in store in the past year. And, good news for omnichannel retailers: The vast majority of consumers in the 2017 survey who have used buy online, pick up in store said the experience was either “excellent” (51%) or “good” (43%). Consumers also are researching items online before they pick them up in stores. 26% always do so and 42% frequently do, according to the survey.

Retailers also say consumers are buying online and picking up products in stores more often.

For example, department store chain J.C. Penney Co. Inc. tells Internet Retailer 40% of its online orders are picked up in-store. At The Home Depot Inc., that stat is 46%, says Dave Abbott, vice president of integrated media for the home improvement retailer. The list goes on.

Retailers are responding in kind. For example, 102, or 21%, of the 2018 Internet Retailer Top 500 retailers offer buy online, pick up in store (keep in mind that not all Top 500 retailers have stores). More than half—78—of the 140 retail chains in the Top 500 offer the feature. And 101—72.1%—of retail chains offer returns of online purchases at stores.

OVERVIEW • THE CASE FOR OMNICHANNEL

CONSUMER SURVEY

STORE PICK-UP RATE PICKS UPIn the past year, have you purchased a product online and picked it up in a store?

Source: Internet Retailer and Bizrate Insights consumer surveys in March 2017 and March 2018.

Yes58% 62%

42% 38%

Yes

No No

2017 2018



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But there’s a case for the investment when one considers the added cash multichannel shoppers bring in. For example, omnichannel customers—meaning customers who engage with a retailer in more than one channel—spend 2.7-times more at beauty products retailer Ulta Beauty than its store-only shoppers, says Dave Kimbell, chief merchandising and marketing officer for Ulta. And consumers who shop at retailer TechStyle Fashion Group’s Fabletics.com and in its stores

But the real omnichannel all stars are offering much more than the basics. They are getting creative. Take, for example, Home Depot, which in 2017 launched a tool that lets a shopper—often a tradesperson or contractor—view inventory from a specific store near his worksite, purchase a product from that store online and have it delivered that same day. The retailer will also tell shoppers on its site and app precisely where an item in a specific store is located—down to the aisle and bay—in each of its sprawling home improvement superstores.

“We logged 1.8 billion visits to HomeDepot.com in 2017,” Abbott says. “A lot of those customers have no intentions of buying online. But they want to know, ‘How do I get out of a store as quickly and painlessly as possible?’”

Such initiatives aren’t cheap. For example, Home Depot in late 2017 said it planned to spend $5.4 billion specifically to improve its omnichannel capabilities. And in April, Home Depot announced it will hire more than 1,000 technology profes-sionals to power the $11.1 billion investment it is making in general technology through 2020.

WHAT OMNICHANNEL FEATURES DO RETAIL CHAINS IN THE TOP 500 OFFER?Percentage and number of the 140 retail chains in the Top 500 offering various omnichannel features 1

1. Omnichannel data is available for 483 retailers in the Top 500. Source: Internet Retailer 2018 Top 500

Buy online, pick up in store

Ship from store

Store returns

Real-time inventory

Store locator

55.7% | 78

72.1% | 101

20.7% | 29

52.9% | 74

88.6% | 124



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spend roughly three-times more than those who only shop the retailer’s website.

The data is clear. Consumers want to shop across channels. Those who do are more profitable. That means getting omnichannel right is paramount for retailers.

Since a solidly executed omnichannel strategy can be so meaningful for merchants, we wanted to know more than the facts and figures. We wanted to know which merchants really deliver when it comes to omnichannel.

To find out, Internet Retailer editors and researchers stepped outside our cubicles, put on our consumer caps and tested retailers’ omnichannel initiatives for ourselves. We purchased from, visited and analyzed 24 retail chains to determine which merchants get omnichannel right.

Some have quite a bit of work to do. Others have obviously put in the work to offer a refreshing, easy and impressive omnichannel experience. Here are our findings.

3xIncrease in spending for consumers who shop Fabletics online and in stores, as compared to those who just shop online

SPONSORED ARTICLE

An executive conversation with

Jennifer Sherman, SVP, Product & Strategy, Kibo

Retail chains have had varying levels of success with omnichannel strategies. What do the more successful ones have in common?The right technology partners, executive and store operations buy in, and unifying the in-store and online experience equate to success in omnichannel. The right technology partners will be there for you every step of the way, with your best interest in mind. Both executives and store operations need to understand the importance of omnichannel and need to be strong advocates for helping the programs run smoothly. Store operations should be prepared for success with sufficient training, staffing, and attribution, while executives should understand how their customers are using the provided omnichannel strategies and where they can improve. Alignment of inventory across channels with fulfillment options like ship-from-store and buy online, pick up in store allow teams to bridge the online and in-store gap, improving the omnichannel experience.

What are some of the things retailers have struggled with in creating successful omnichannel strategies?Inventory inaccuracies, your technology stack not being modern enough to handle omnichannel, and your digital, in-store, and IT teams not being aligned, often create the biggest silos and missed opportunities in creating a true omnichannel experience.

What are the pros and cons for retailers of developing a mobile app as part of their omnichannel strategies?The biggest thing to keep in mind is what you expect the app to do for your business. Creating an app may not increase your mobile conversions. You need to weigh whether or not your brand drives as many mobile users to make the creation of the app totally worthwhile. A better start in your omnichannel strategy would be to make sure your site is fully responsive for mobile.

If a retailer decides to develop a mobile app, what are the “must have” features in terms of improving the omnichannel experience?Tying your mobile app to a loyalty program and personalized promotions will offer up the best conversions for your business. At the same time, when we talk about improving omnichannel experience, we are talking about omnichannel fulfillment. No matter if the customer comes in through the store, a pop-up shop, or a branded e-commerce site on any device, the concept is the same: Get the right product to the right person in the easiest, and fastest way possible. Therefore retailers should also consider an agile, forward thinking order management system that ties directly into their app.

Omnichannel is not entirely about the technology. How do things like store design and staff training play a role?Store design and in-store staff are key players in BOPIS, ship-from-store, return-to-store, or ship-to-store. The technology can get the inventory at the right place at the right time, but we need empowered store associates to help with the last mile. Our research shows only 7% of store associates even attempt saving the sale. It’s imperative that store associates be trained and equipped with the right tools to assist and provide knowledge to customers.

As technology evolves, what kinds of new capabilities do you anticipate that will improve the omnichannel experience?I anticipate machine learning and artificial intelligence will only continue to grow more advanced and change the future of the customer experience, especially in-store. Bringing personalization into the store is the next step in providing heightened omnichannel experiences and we would be missing out as an industry if we didn’t provide the same experiences in-store as we do online.



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these services worked when we tried them. For example, a retailer received bonus points if it had a dedicated parking spot for online order pickups, offered clear instructions and signage on where to pick up online orders, and if its website, mobile site or app offered local inventory stock counts down to the SKU level. Each measured metric was assigned a point value from 1-5 points.

A perfect score was 77.

We then evaluated the merchants on 29 omni-channel metrics, ranging from if the retailer offered buy online, pick up in store to if the retailer commu-nicated on its site or app that items were available at a local store. We each bought an item online and picked it up in store (if the retailer offered that service) and documented the process.

Because an omnichannel initiative is only as good as its execution, we further evaluated how well

OVERVIEW • THE GAME PLAN

We organized retailers—all of which appear in the 2018 Internet Retailer Top 1000—into nine categories as follows:

ADULT APPARELAnn Inc.’s LoftGap Inc.J. Crew Group Inc.

BEAUTYSephora USA Inc.Ulta

DEPARTMENT STORESJ.C. Penney Co. Inc.Kohl’s Corp.Sears Holdings Corp.

HIGHER-END DEPARTMENT STORESMacy’s Inc.Nordstrom Inc.Saks Fifth Avenue

HOME IMPROVEMENTThe Home Depot Inc.Lowe’s Cos. Inc.

MASS MERCHANTTarget Corp.Walmart Inc.

SPORTING GOODSBass Pro Shops Inc.Dick’s Sporting Goods Inc.Recreational Equipment Inc.

TEEN APPARELAmerican Eagle Outfitters Inc.Forever 21 Inc.Urban Outfitters Inc.

WEB MOSTLYAmazon BooksUntuckitWarby Parker(retailers that started out only selling online but have since opened some stores)



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Here are the rankings, in total, across all categories. Walmart nabbed the No. 1 spot with a score of 67. Bass Pro ranked last with a score of 25.

OVERVIEW • THE BIG PICTURE

OVERALL SCORES How retailers rank on their omnichannel initiatives

Omnichannel Rank Category Score

1 Walmart Inc. Mass Merchant 67

2 Target Corp. Mass Merchant 65

3 Sears Holdings Corp. Department Store (Mid-level) 63

4 Kohl’s Corp. Department Store (Mid-level) 61

5 Nordstrom Inc. Department Store (High-end) 61

6 The Home Depot Inc. (tied) Hardware/Home Improvement 57

6 Lowe’s Cos. Inc. (tied) Hardware/Home Improvement 57

8 Macy’s Inc. Department Store (High-end) 57

9 Urban Outfitters Inc. Apparel (Teen) 46

10 J.C. Penney Co. Inc. Department Store (Mid-level) 46

11 Sephora USA Inc. Beauty 44

12 Warby Parker Web-Mostly 42

Omnichannel Rank Category Score13 American Eagle Outfitters Inc. Apparel (Teen) 42

14 Amazon Books Web-Mostly 41

15 Ann Inc.’s Loft Apparel (Adult) 41

16 Dick’s Sporting Goods Inc. Sporting Goods 41

17 Recreational Equipment Inc. Sporting Goods 39

18 Forever 21 Inc. Apparel (Teen) 38

19 Gap Inc. Apparel (Adult) 38

20 Ulta Beauty 36

21 Saks Fifth Avenue Department Store (High-end) 32

22 J. Crew Group Inc. Apparel (Adult) 29

23 Untuckit Web-Mostly 26

24 Bass Pro Shops Inc. Sporting Goods 25

Source: Internet Retailer's analysis of 24 U.S. retail chains



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WalmartNo. 1 Walmart scored big for offering in-store pickup of online orders in a little more than five hours and for providing exact local store stock counts for when inventory is running low. It also ships online orders from its stores.

Walmart also recently ramped up its investment in omnichannel. For example, it announced in April it is adding more of its Pickup Towers, which allow shoppers to retrieve online orders in stores via their smartphones, to more than 700 stores by the end of the year from nearly 200 stores currently. The towers are located inside near the front of the stores and resemble giant vending machines. Once installed, the towers will be available to nearly 40% of the U.S. population, Walmart says. For customers who opt to pick up their online order in a store, once an online order is ready, Walmart sends the customer an email or text notification with a code. Then she walks to the Pickup Tower in the Walmart store she’s selected, scans her code and can retrieve her order in less than 15 seconds.

90% of U.S. consumers live within 10 miles of a Walmart store, Walmart says, and the chain says it serves more than 140 million customers a week.

In another omnichannel convenience play, Walmart in March announced plans to put FedEx Office locations in 500 Walmart stores over the next two years. The move comes after a pilot with 47 Walmart stores. The deal offers customers packing, printing and shipping services at the locations. Customers also can have online orders from any retailer that are being delivered by FedEx held at Walmart stores for up to five days.

OVERVIEW • THE BIG PICTURE

Walmart's Pickup Towers will be available to nearly 40% of the U.S. population after the retailer finishes expanding the towers this year.



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and not available for several days. 96%, or all but Amazon Books, allow shoppers to return online orders to a store. Only 8% of retailers placed store coupons in researchers’ BOPIS email confirmation/receipts.

18 of the 24 retailers (75%) we visited offered buy online, pick up in store (BOPIS) service. However, at retailers Warby Parker and Forever 21, online orders are or seem to be shipped to a store for pick up rather than picked from in-store stock

OVERVIEW • BUY ONLINE, PICK UP IN STORE (BOPIS)

Buy Online Pick Up in Store 75%Reserve Online Pick Up in Store 21%Another email sent when order is ready for pickup 83%Same-day pickup 58%Provides directions in email/app on how/where to pick up orders in stores 50%Dedicated counters/lanes for online orders 46%Clear signage directing where to pick up orders 42%Pickup location is in front of store 42%Dedicated parking spot for online orders 17%Store coupons in email confirmation/receipt 8%

WHAT PERCENTAGE OF RETAILERS OFFER WHICH BOPIS FEATURES?

Source: Internet Retailer's analysis of 24 U.S. retail chains



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swiping your purchasing credit card or scanning the barcode at the top of this email. Or you can enter your sales check number.” (Sears then provided the sales check number.)

Nordstrom’s BOPIS was also a standout: “This was very easy,” our researcher writes. “The item was already sitting out in a rack, bagged up and with my name on it. I just had to show ID to the employee in the pick-up area.”

Retailers whose BOPIS experience could use work include:American Eagle Outfitters: The teen apparel retailer only offers the ability to reserve online to try on in store and gets dinged for stating that the reserve online, pick up in store item would be ready within an hour but not notifying our researcher it was available until the following day. American Eagle didn’t respond to multiple requests for comment on its omnichannel services.

Standouts in the buy online, pick up in store experience include:Home Depot, which sent a text when the order was ready for pick up (if the shopper opted in for text messaging).

Target, where some buy online, pick up in store orders are available in less than one hour.

Urban Outfitters gets high marks for having clear signage behind the checkout counter about where to pick up online orders.

J.C. Penney offered clear instructions in an email for where to pick up the order: “See an associate in the Home Department—1st Floor.”

Sears, which also provided specific guidance via email on where to retrieve an online order: “Head to Sears. Bring this email, original method of payment and your photo ID. Go to the kiosk in the merchandise pickup area at the Lower South Entrance of the store. Initiate your pickup by




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Gap: For now, Gap only allows reserve online for in store pick-up at Gap stores in the U.S. Reserving online is a pretty simple process (there’s a button shoppers click if they want to reserve instead of purchase). Gap did a good job communicating about the reserved item. It sent an email to confirm the reservation, another one letting her know the item was ready to try on and another one the following day reminding her that the reservation was ready and it was only available through the end of the day. Gap’s general manager for online John Stratford said in an interview with Internet Retailer that it is offering buy online, pick up in store at Gap stores in the U.K. and began testing the service at U.S. Old Navy stores in the first quarter of 2018. Based on the early results of the Old Navy pilot, he said Gap plans to eventually roll out the feature in its U.S. Gap stores.

Ulta, Sephora, Gap, American Eagle, Untuckit and Amazon Books all do not offer buy online, pick up in store.

88% 88% 71% 63%

33% 25% 17%



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OVERVIEW • A MOBILE SNAPSHOT

88% (21) of retailers we visited have a mobile app. But only four offer wayfinding, which means they provide directions for navigating the store via a mobile app on where to locate a product. It’s worth noting that this feature is far more useful in a large store such as Lowe’s and not necessarily needed in a smaller store, such as Untuckit.

WHAT PERCENTAGE OF RETAILERS OFFER WHICH MOBILE FEATURES?

Do they have a mobile app?

Geofencing/Location awareness

Scan barcodes via app

Wayfinding

Registry on app1

In-store mobile promotions

Wi-Fi in store

1. Eight retailers measured. Source: Internet Retailer's analysis of 24 U.S. retail chains



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Standouts for mobile app execution include:Home Depot, Macy’s and Nordstrom get extra credit for its an app offering an in-store mode to assist with shopping—showing the store map, departments and other helpful information. It also recognized when our researcher was in the store.

Both Home Depot and Lowe’s apps show shoppers precisely where an item is located in a specific store down to the aisle and bay and provide the exact stock count in a specific store.

Sephora sent our researcher an app welcome email with a guide to the perks of having the app.

“It was a great, digestible, at-a-glance explanation of what the app offers,” our researcher notes. “The last item read: ‘In-store companion: Book the Beauty Studio, scan any item for ratings and reviews, and keep your Beauty Insider card and past purchases handy while shopping our aisles.’”

Target’s app is a standout for showing shoppers in-store deals nearby as she navigates a store.

Sephora, Ulta, American Eagle Outfitters, Forever 21 and Urban Outfitters all tell shoppers if an item is in stock at a local store.

OVERVIEW • A MOBILE SNAPSHOT

’When you're looking at a product in Home Depot (mobile apps, website or mobile site), if it's stocked in the store, you'll see an aisle and bay location and then you can click through and get that mobile map or see where it is in the store. So really, every product view that we have is fully enriched with the location. Our customer service scores in the category of “easy to find” increased 30% with the implementation of our new navigation initiatives.’

—Ann-Marie Campbell, executive vice president, U.S. Stores, Home Depot, at the retailer’s 2017 investors’ conference



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When it comes to which omnichannel features retail chains have, 100% offer a store locator (on site or in app). Of the 88% (21) that offer in store stock counts, Kohl’s gets accolades for telling consumers it refreshes its local store stock count information every 10 minutes. Other retailers such as Sephora tell shoppers store inventory is updated every few hours or once a day.

OVERVIEW • OMNICHANNEL FEATURES

WHAT PERCENTAGE OF RETAILERS HAVE WHICH OMNICHANNEL FEATURES?Do they have a mobile app? 88%

Wayfinding 17%

Geofencing/Location awareness 33%

Store Locator (online or app) 100%

BONUS Location-aware without entering location info 75%

Scan barcodes via app 71%

In-store stock counts 88%

BONUS Provides exact number 25%

Registry on app1 88%

In-store mobile promotions 25%

Online price matching 50%

In-store kiosks 46%

Mobile devices for store associates 58%

BONUS Associates can check out customers on mobile device 38%

Reserve online pick up in store 21%

Buy online pick up in store 75%

BONUS Provides directions in email/app on how/where to pick up orders in stores 50%

BONUS Store coupons in your email confirmation/receipt 8%

BONUS Another email sent when order is ready for pickup 83%

BONUS Dedicated parking spot for online orders 17%

BONUS Clear signage directing where to pick up orders 42%

BONUS Dedicated counters/lanes for online orders 46%

BONUS Pickup location is in front of store 42%

BONUS Return process is simple 83%

Same-day BOPIS availability 58%

Ship from store 54%

Return to store 96%

Wi-Fi in store 63%

BONUS Clear signage on other omnichannel offers 33%

1. Eight retailers measured.

CONSUMER INSIGHTS

Household items

Groceries

Women’s apparel

Men’s apparel

Baby & kids’ apparel

Shoes

Housewares

Baby products

Personal care products

Toys

Books

Sporting goods

Jewelry

Electronics

Pet products

Office supplies

80%60%40%20% 70%50%30%10%

18%

8%

39%

22%

11%

32%

32%

4%

28%

21%

44%

17%

15%

35%

24%

24%

48%

74%

39%

24%

10%

49%

31%

8%

48%

9%

8%

12%

28%

30%

20%

13%

WHAT TYPES OF PRODUCTS DO YOU PREFER TO PURCHASE ONLINE RATHER THAN IN A PHYSICAL STORE? (MULTIPLE RESPONSES ALLOWED)

OMNICHANNEL

©Copyright 2018 Internet Retailer® & Vertical Web Media LLC. All rights reserved. Data as of April 2018

IN THE PAST YEAR, HAVE YOU ORDERED A PRODUCT ONLINE THEN PICKED UP THAT ORDER IN A LOCAL STORE?

YES NO62% 38%

MANY RETAILERS HAVE CLOSED PHYSICAL STORES IN RECENT YEARS. HOW HAS THAT IMPACTED YOUR SHOPPING HABITS?

I just travel farther to the stores I like or shop at a different physical store.

I shop online a lot more.

I shop online somewhat more.

It hasn’t impacted my shopping habits.

0510152025303540

13%

32%

17%

38%

HOW OFTEN DO YOU RESEARCH PRODUCTS ONLINE BEFORE BUYING IN STORES? Always 26%

Frequently 42%

Occasionally 23%

Rarely 7%

Never 3%

OMNICHANNEL

©Copyright 2018 Internet Retailer® & Vertical Web Media LLC. All rights reserved. Data as of April 2018

HOW THE COMPETITION

STACKS UP

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Because department store chain Kohl’s isn’t competing with home improvement retailer Lowe’s, and shoppers have different omnichannel needs and desires based on what they are shopping for, Internet Retailer researchers also evaluated retailer competitors in the same category on their omnichannel features and execution.

Here are our findings and rankings by category:

Adult Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Beauty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Department Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Higher-end Department Stores . . . . . . . . . . . . . . . . . . 43

Home Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52

Mass Merchant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62

Sporting Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Teen Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Web Mostly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81



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HOW THE COMPETITION STACKS UP

J. CREW GROUP INC. SCORE: 29

GAP INC.SCORE: 38

LOFTSCORE: 41

ADULT APPAREL



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POINT VALUE LOFT GAP INC. J. CREW GROUP INC. Do they have a mobile app? Yes = 5 5 5 0

Wayfinding Yes = 3 0 0 0

Geofencing/Location awareness Yes = 3 0 0 0

Store locator (online or app) Yes = 5 5 5 5

BONUS Location-aware without entering location info Yes = 1 1 1 0

Scan barcodes via app Yes = 3 0 0 0

In-store stock counts Yes = 5 5 5 5

BONUS Provides exact number Yes = 1 0 0 0

Registry on app Yes = 3 | NA = not applicable NA NA NA

In-store mobile promotions Yes = 3 0 0 0

Online price matching Yes = 5 0 0 0

In-store kiosks Yes = 5 5 5 5

Mobile devices for store associates Yes = 3 3 0 0

BONUS Associates can check out customers on mobile device Yes = 1 1 0 0

Reserve online pick up in store Yes = 3 0 3 0

HOW THE COMPETITION STACKS UP • ADULT APPAREL



25

POINT VALUE LOFT GAP INC. J. CREW GROUP INC. Buy online pick up in store Yes = 5 5 0 5

BONUS Provides directions in email/app on how/where to pick up orders in stores Yes = 1 1 1 1

BONUS Store coupons in your email confirmation/receipt Yes = 1 0 0 0

BONUS Another email sent when order is ready for pickup Yes = 1 1 1 1

BONUS Dedicated parking spot for online orders Yes = 1 0 0 0

BONUS Clear signage directing where to pick up orders Yes = 1 0 0 0

BONUS Dedicated counters/lanes for online orders Yes = 1 0 0 0

BONUS Pickup location is in front of store Yes = 1 0 0 0

BONUS Return process is simple Yes = 1 1 1 1

Speed of BOPIS/Reserve availability Day of = 3 | Next day = 2 | Within a week = 1 3 3 1

Ship from store Yes = 3 0 3 0

Return to store Yes = 5 5 5 5

Wi-Fi in store Yes = 3 0 0 0

BONUS Clear signage on other omnichannel offers Yes = 1 0 0 0

TOTAL Possible: 77 41 38 29




26

DATA

1. Internet Retailer estimate

Based on our researcher’s experience at apparel stores tailored to adults, Ascena Retail Group-owned Loft took the No. 1 prize—but not by much. Loft scored 41, with Gap Inc. coming in a close second with 38 points. J. Crew was far behind (29 points), mainly because it doesn’t offer a mobile app.

These retail chains often have smaller stores located either in shopping malls or strip malls. The smaller square footage may be a reason for not having signage or dedicated counters for online orders. In each case, the store only had

one checkout counter so our researcher had to stand in line to pick up online orders, which doesn’t lend to the best omnichannel experience. But our researcher found the stores weren’t crowded, so the lines weren’t long.

The Loft in-store pick up was smooth. After standing in a short line, the sales associate simply asked for the researcher’s name and then went to the back to retrieve the order. She scanned it with a mobile device and stapled the receipt and return information onto the shopping bag.

STORE LOCATION55 S . Main St .Naperville, IL 60540

2017 Total Sales $6,649,800,000

2017 Web Sales $737,260,1161

2017 Web Sales Growth 18.6%1

E-Commerce Penetration 11.1%

Number of Stores 678

TOP 1000 RANK 73OMNICHANNEL RANK 15

LOFT 2


2. Loft is a secondary brand of parent company Ann Stores Inc., which is owned by Ascena Retail Group. Top 1000 rank and financial information is based on its parent company.



27

DATA


Gap is one of the few retailers our team visited that allow shoppers to reserve an item online and try it on in the store. However, our researcher had to search around the site quite a bit to find items that were available in stores nearby.

While Gap is a standout for its reserve online features, it is also one of the few retailers that doesn’t offer buy online, pick up in store—an

omnichannel staple. As noted previously, Gap is offering this at Old Navy stores in the U.S. and is planning to add it to Gap stores. Last year, Gap also began the major task of reconfiguring its distribution centers that previously only shipped merchandise to stores so they also could fulfill orders to individual online shoppers.

Gap’s general manager of e-commerce John Stratford says Gap, which also owns Old Navy, Banana Republic and Athleta, has considered offering services to make shopping across all its brands more convenient. For example, it has discussed allowing a shopper to pick up a Banana Republic online order at a Gap store if she chooses. But he says such services would introduce a multitude of complexities. “If I can get my Banana Republic order at a Gap store, I would probably also expect to be able to return it to a Gap store,” he says. Stores don’t have the floor space to handle such additional merchandise and store point-of-sale systems would need to be upgraded, Stratford says. So, this type of convenience is off the table for now.


2017 Total Sales $15,900,000,000

2017 Web Sales $3,100,000,000

2017 Web Sales Growth 21.2%


Number of Stores 3,165


GAP INC.




28

DATA


JCrew.com offers the option to pick up a product in-store on every product page. When clicking on the “In-store pickup” button, shoppers view a list of stores located near them and see whether the item is available in stores now. As a shopper, you’re not able to select a store to pick up an item until you proceed to checkout. “It’s not a deal breaker,” our researcher writes, “but it wasn’t an ideal user experience.”

J. Crew declined to comment for this report.


2017 Total Sales $2,370,100,000

2017 Web Sales $1,144,238,4001





J. CREW GROUP INC.




29


ULTA BEAUTYSCORE: 36

SEPHORA USA INC.SCORE: 44

BEAUTY



30

POINT VALUE SEPHORA USA INC. ULTADo they have a mobile app? Yes = 5 5 5

Wayfinding Yes = 3 0 0

Geofencing/Location awareness Yes = 3 3 0

Store locator (online or app) Yes = 5 5 5

BONUS Location-aware without entering location info Yes = 1 1 1

Scan barcodes via app Yes = 3 3 3

In-store stock counts Yes = 5 5 5

BONUS Provides exact number Yes = 1 0 0

Registry on app Yes = 3 | NA = not applicable NA NA

In-store mobile promotions Yes = 3 0 0

Online price matching Yes = 5 5 0

In-store kiosks Yes = 5 5 5

Mobile devices for store associates Yes = 3 3 3

BONUS Associates can check out customers on mobile device Yes = 1 1 1

Reserve online pick up in store Yes = 3 0 0

HOW THE COMPETITION STACKS UP • BEAUTY



31

POINT VALUE SEPHORA USA INC. ULTABuy online pick up in store Yes = 5 0 0

BONUS Provides directions in email/app on how/where to pick up orders in stores Yes = 1 0 0

BONUS Store coupons in your email confirmation/receipt Yes = 1 0 0

BONUS Another email sent when order is ready for pickup Yes = 1 0 0

BONUS Dedicated parking spot for online orders Yes = 1 0 0

BONUS Clear signage directing where to pick up orders Yes = 1 0 0

BONUS Dedicated counters/lanes for online orders Yes = 1 0 0

BONUS Pickup location is in front of store Yes = 1 0 0

BONUS Return process is simple Yes = 1 0 0

Speed of BOPIS/Reserve availability Day of = 3 | Next day = 2 | Within a week = 1 0 0

Ship from store Yes = 3 0 0

Return to store Yes = 5 5 5

Wi-Fi in store Yes = 3 3 3

BONUS Clear signage on other omnichannel offers Yes = 1 0 0

TOTAL Possible: 77 44 36




32

DATA


Sephora wins the beauty battle for a couple extras that Ulta didn’t offer. That included clear online price matching and providing geofencing/location awareness on its app.

As mentioned earlier, Sephora scores points for sending an app welcome email shortly after our researcher installed the Sephora app.

In the app, a banner reading “Store companion” appeared at the top while our researcher was

in the store. The store she was in was selected without her entering any location information. When not in a store, the app offers a popup asking a shopper to use her current location and pulls up tabs for a map or list without her having to enter a ZIP code or city and state. The website, however, requires shoppers to enter their ZIP code or city and state to populate store location information.

Shoppers can also use the Sephora app to scan barcodes in store to see product ratings and reviews, photos, and videos. Once a consumer selects that option, it brings her to the scanner page and accesses her phone’s camera. The photo is snapped automatically without actively clicking anywhere once the camera captures the barcode. There’s also a “Search manually” button at the bottom that brings the consumer back to the search bar. Once the item is searched, the shopper can see if it’s in stock, but there is not a quantity listed.

In the app, the “Find in store” button on a product detail page senses the shopper’s location and

STORE LOCATION104 Oakbrook CenterOak Brook, IL 60523


2017 Total Sales $52,533,734,220

2017 Web Sales $343,744,5621




SEPHORA USA INC.2


2. Sephora is a secondary brand of parent company LVMH. Top 1000 rank and financial information is based on its parent company.



33


match. They’re also used for the DMG, or Digital Makeover Guide, which allows employees to scan products used during an in-store makeover for customers to refer to—and potentially buy—later. During our researcher’s site visit, an employee took her email address and added some products to her profile. The associate our researcher spoke with said that the device scanning was originally used exclusively for customers who were visiting for a makeup appointment, but the company realized there was a demand for it from all customers visiting the store. “It can be overwhelming to make the decision on whether you want to spend $40 on a foundation. So, this lets a customer sleep on it but still easily track down what they want later,” the employee said. “I can’t tell you how many calls the store gets asking ‘What did you use on me that one day six months ago?’ And now we can have a history of that.”

Employees use one type of device to take customer information and another for mobile checkout. For mobile checkout, the devices can complete the transaction as long as it’s not a cash payment or return. This can happen anywhere in the store.

offers a popup reading: “This item is available at the following stores (last updated 3 hours ago).” Once a shopper hits OK, she sees a list of stores with thumbnail maps, addresses, phone numbers, distance and a “Get directions” button. Then, under a header at the top, it reads: “IN STOCK: This item was available at the following stores within the past 24 hours.” The same is true on the website. The transparency is nice, our researcher noted, but the differing hours since updating availability may be a little confusing for shoppers.

Sephora also offers customer-facing kiosks where shoppers can log in using their Sephora Beauty Insider (loyalty program) number and email and then search for products to read up on and connect to their Sephora profiles. Employees can order an item that is out of stock or not carried in stores for a customer and have it delivered in three to five business days to her home with the shipping fee waived.

Associates also use mobile devices for what Sephora calls the Color IQ check, which tests a customer’s forehead, cheek and neck to color

‘I can’t tell you how many calls the store gets asking “What did you use on me that one day six months ago?” And now we can have a history of that.’

SEPHORA USA INC. (CONTINUED)



34


“If I just spent 45 minutes with them doing their makeup, I want to ring them up right there to complete the experience. We have an established relationship at that point,” the employee said. The associate had scanned six items our researcher had discussed during her informal conversation, and as our researcher was wrapping up, an email was sent to her with the subject line “Your Beauty Studio look + all the products we used today” that documented everything she tried with price and color. The message read: “Your beauty recap: Sad to have washed this makeup look away? Recreate it anytime by accessing our Digital Makeover Guide and browsing the shopping list below.”

Sephora has Wi-Fi in store and allows for online orders to be returned to stores. If a shopper doesn’t have her receipt but has a Beauty Insider account, the associate can look up a shopper’s order using her Beauty Insider number.

Despite all the extensive omnichannel initiatives, Sephora doesn’t offer BOPIS.

Sephora declined to comment for this report.

SEPHORA USA INC. (CONTINUED)



35

DATA


Ulta offers several omnichannel capabilities. It has an app that sends push notifications and automatically accesses the shopper’s location if the shopper allows. However, the app didn’t send our researcher notifications or actively indicate that she was in the store.

The app also offers barcode scanning like Sephora. A barcode icon appears on the right of the “Search Ulta Beauty” box, and once a

shopper taps on the search, a “Scan barcode” option appears, which asks for access to the device’s camera and brings the shopper to the scanner page. Like Sephora, the photo is snapped automatically once the camera captures the barcode. There’s also an “Enter barcode” button at the bottom to allow a shopper to manually enter the barcode. Once the item is searched, it brings up a details page, which displays additional information, alongside an “Add to bag” button and a “Find in store” button. However, when our researcher tapped on “Find in store,” it showed her store location as 0.2 miles from her, despite her standing in the store.

Unlike Sephora, Ulta doesn’t have in-store kiosks and doesn’t match online prices. Associates do use mobile devices in stores. While our researcher didn’t see any employees using them on her visit, an associate told her that staff use these devices each morning to fill the shelves and to scan and see if a product is in stock. She said the mobile devices are used more during the


2017 Total Sales $5,884,506,000

2017 Web Sales $568,700,000

2017 Web Sales Growth 64.7%



STORE LOCATION1310 W . 75th St .Downers Grove, IL 60516

ULTA BEAUTY




36

busy holiday season and that they can check out customers who are paying with cards. The store our researcher visited had three mobile devices for associates.

Ulta has Wi-Fi in store and allows for online orders to be returned to stores. Ulta doesn’t offer BOPIS.

Ulta’s chief merchandising and marketing officer Dave Kimbell says Ulta’s online sales grew 60% in the fourth quarter. He adds that Ulta’s app allows shoppers to access digital coupons, product reviews, use voice search or virtually try on make up through a feature called GLAMlab.

Kimbell also says Ulta’s new “Store to door” capability makes all products accessible, all the time to shoppers, by enabling store associates to order and ship items that are sold out in store or only available online.

“This solution is ramping up faster than expected and satisfying a strong demand for online-only brands that aren’t yet available in all stores,” Kimbell says.


Ulta’s new “Store to door” capability ‘is ramping up faster than expected and satisfying a strong demand for online-only brands that aren’t yet available in all stores.’

—Dave Kimbell, chief merchandising and

marketing officer, Ulta

ULTA (CONTINUED)



37


J.C. PENNEY CO. INC.SCORE: 46

KOHL’S CORP. SCORE: 61

SEARS HOLDINGS CORP.SCORE: 63

DEPARTMENT STORES



38

POINT VALUESEARS HOLDINGS

CORP. KOHL’S CORP. J.C. PENNEY

CO. INC.Do they have a mobile app? Yes = 5 5 5 5








Registry on app Yes = 3 | NA = not applicable 3 3 3







HOW THE COMPETITION STACKS UP • DEPARTMENT STORES



39

POINT VALUESEARS HOLDINGS

CORP. KOHL’S CORP. J.C. PENNEY

CO. INC.Buy online pick up in store Yes = 5 5 5 5



















Sears gets bonus points for having a few features its competitors do not, such as geofencing/location awareness that recognized when our researcher was in or near a store. It also was the only retailer in the category that offered reserve online, pick up in store. The aforementioned email with details about how and where to retrieve an item ordered online in a store also helped bump Sears’ score above its competitors. The retailer also offered in-store mobile promotions and

equipped store associates with mobile devices that could check consumers out on the showroom floor. Coupons in email order confirmations encouraged shoppers to use in-vehicle pickup by offering $10 cashback in points when a shopper spends $10 or more using the service. In-vehicle pickup is for Sears loyalty members with the Sears app and allows shoppers to pick up items ordered online at a local store in five minutes without leaving their vehicle.

STORE LOCATION2 Woodfield MallSchaumburg, IL 60173


DATA2017 Total Sales $16,702,000,000

2017 Web Sales $2,803,500,0001

2017 Web Sales Growth -11.0%1



SEARS HOLDINGS CORP.





Kohl’s ranks a close second with many omnichannel features available, including rarer features such as in-store kiosks, which less than half of all retailers we visited offered. It also equips store associates with mobile devices and has dedicated parking spots for online order pickup, which only 17% of all stores provided. BOPIS orders were also available for pickup that same day. As noted earlier, Kohl’s refreshes its local store SKU count every 10 minutes.

Kohl’s has been taking steps to offer services at its stores to drive more foot traffic.

In September, it began testing a program with Amazon.com Inc., enabling shoppers to return their Amazon orders at Kohl’s stores. Kohl’s will pack and ship those returns to Amazon return centers, free of charge to customers. Shoppers do not need to have their Amazon orders in the original packaging to complete a return, Kohl’s says. It also recently announced it was leasing space in some stores to German supermarket chain Aldi to sell groceries. In May, Kohl’s said its stores fulfilled about 30% of its online orders in the first quarter.

STORE LOCATION800 W . Dundee Rd .Arlington Heights, IL 60004


DATA2017 Total Sales $19,095,000,000

2017 Web Sales $3,471,423,2801




KOHL’S CORP.





J.C. Penney gets fewer points mainly for not offering as many of the bells and whistles of its competitors, such as clear signs directing where to pick up online orders, in-store kiosks and not clearly offering online price matching—which Kohl’s and Sears offer.

However, J.C. Penney says it is making a concentrated effort in omnichannel and shared impressive results and initiatives with Internet Retailer, including:

50% of online traffic to J.C. Penney now comes from a mobile device.

J.C. Penney app users spend 3.5-times more than non-app customers.

New app features include store price check and a booking feature that allows consumers to view J.C. Penney salon services by location, schedule appointments and discover the latest seasonal hair trends prior to meeting with a stylist.

Multiple convenient shipping options—80% of store inventory is available for buy online, pick up in store the same day.

More than 40% of online orders are now picked up in stores.

Approximately 90% of all online orders touch a physical store—for example, the order is shipped from store or picked up in a store.

J.C. Penney store associates are equipped with handheld mobile devices, enabling them to help customers place an online order, retrieve a same-day pickup order and check store stock levels for any item.

100% of stores are equipped to fill online orders.

STORE LOCATION3 Woodfield MallSchaumburg, IL 60173


DATA2017 Total Sales $12,506,000,000

2017 Web Sales $1,937,125,7601




J.C. PENNEY CO. INC.




43


SAKS FIFTH AVENUESCORE: 32

MACY’S INC. SCORE: 57

NORDSTROM INC. SCORE: 61

HIGHER-END DEPARTMENT STORES



44

POINT VALUE NORDSTROM INC. MACY’S INC. SAKS FIFTH

AVENUEDo they have a mobile app? Yes = 5 5 5 5








Registry on app Yes = 3 | NA = not applicable 3 3 0







HOW THE COMPETITION STACKS UP • HIGHER-END DEPARTMENT STORES



45

POINT VALUE NORDSTROM INC. MACY’S INC. SAKS FIFTH

AVENUEBuy online pick up in store Yes = 5 5 5 5



















Nordstrom wins for offering surprising details that made shopping efficient and easy. For example, the Nordstrom app knew our researcher was in the store after he opened it and had an “in-store” mode with sale information, a store directory and special deals. The BOPIS item was already sitting out on a rack, bagged up and with our researcher’s name on it. The BOPIS email provided very clear instructions on how to pick up an online order. In-store signage about where to pick up online orders also was clearly displayed. In-store returns of web orders were easy and there were dedicated counters for picking up online orders. Nordstrom also offers the reserve online to try on in store feature that few retailers we visited provided. Last year, Nordstrom said that 80% of the customers who try its reserve online service use it again.

The retail chain is continuing to invest in omnichannel. For example, Nordstrom in March bought e-commerce technology vendor BevyUp, a digital selling platform that Nordstrom says it will integrate into its employee-facing app in the coming year. In 2012, Nordstrom distributed 6,000 mobile devices to its stores so employees can check customers out in the aisles and email them receipts. Last holiday season, Nordstrom also offered 24-hour curbside pickup of online orders in major markets.

Nordstrom said on an earnings call last year that nearly 80% of customers who shop with the retailer across multiple channels began in its stores. Co-president Erik Nordstrom also said that more than 60% of the retailer’s full-price online returns and more than 80% of its off-price online returns are returned at one of the retailer’s stores. Web purchases can be returned to Nordstrom stores, but not to Nordstrom Rack stores. Online Nordstrom Rack purchases can be returned only to Nordstrom Rack stores.

STORE LOCATION55 E . Grand Ave .Chicago, IL 60611


DATA2017 Total Sales $15,137,000,000

2017 Web Sales $3,731,449,2611




NORDSTROM INC.





Macy’s scored fewer points because it didn’t tick quite as many omnichannel boxes as Nordstrom. Like Nordstrom, the Macy’s app knew our researcher was in the store after he opened it and had an “in-store” mode with sale information, a store directory and special deals. In fact, the only differences between Nordstrom and Macy’s feature-wise was that, in the store we visited Macy’s associates didn’t have mobile devices to check consumers out with. Earlier this year, Macy’s CEO outlined a new strategy for growth that includes several omnichannel initiatives.

STORE LOCATION835 N . Michigan Ave .Chicago, IL 60611


DATA2017 Total Sales $24,837,000,000

2017 Web Sales $7,789,203,0001




MACY’S INC.




48

Department store chain Macy’s Inc. has plenty of things going for it, Jeff Gennette, the department store chain’s CEO, said earlier this year. Half of all U.S. consumers shop at Macy’s at least once a year, and 60% live within 10 miles of a Macy’s store. And its e-commerce site attracts roughly 1.5 billion visits a year. It also offers same-day delivery in 40 major markets.

“We have healthy margins and good cash flow,” Gennette said. “We have a lot going for us. But our history isn’t enough to guarantee success. Our customer has one foot in the future, and we need to catch up.”

2015 and 2016 brought tough times for Macy’s. The entire department store industry was suffering, including Macy’s, Gennette said. “We were losing market share, and the customers we did have were spending less.”

To set its course straight, Macy’s took a hard look at its customer base with focus groups and other research and uncovered what the Macy’s shopper loved about the store—and what she didn’t. And it developed what it calls its North Star Strategy.

“We identified what was working and what wasn’t,” Gennette said. “And we are now focusing on dialing up the things she loves and getting rid of the things she doesn’t.”

One thing it discovered is the Macy’s shopper doesn’t look at Macys.com and her local store as different worlds, and that she wants inspiration—which often starts online, with her smartphone.

“The phone is often the shopper’s first window to Macy’s,” Gennette said. “Consumers want inspiration and more often, that hunt is beginning before the store,” he said. Macy’s plans to redesign Macys.com and its mobile experience this year,


RETAILER FOCUS | MACY’S INC.

Macy’s has a big strategy for big growth

‘Our customer has one foot in the future, and we need to catch up.’—Jeff Gennette, CEO, Macy’s Inc.



49

“We love furniture. It has high margins,” Gennette said. He said the feature has significantly increased transaction size in the stores where it is available.

While e-commerce has posted double-digit growth for the past eight years, stores have been lagging in sales growth, Gennette said. Another goal is to get store revenue growing again. In an attempt to accomplish this, Macy’s is investing significantly in a group of 50 stores. These stores will offer the VR program and Scan. Save. Go., have new fixtures, employ top talent and house Macy’s discount Backstage stores.

“We will take what works best in these stores into 2019 and beyond,” Gennette said.

Macy’s is zeroing in on merchandising by editing its selection to “reduce the sea of sameness” and by offering exclusive products only sold at Macy’s. It intends to raise its selection of exclusive merchandise from 29% to 40% in the next few years and double the assortment on Macys.com.

Gennette said. “Consumers seek the same inspiration online as they do at a flagship store on State Street in Chicago,” Gennette said.

To create a better experience in its app, Macy’s offers in-store navigation tools and will be expanding an app service program called Scan. Pay. Go. to all stores by the end of 2018. That program enables shoppers to walk into a store and select the items they want to buy, scan the bar code on the item within the app, pay in the app, then approach a special counter where a sales associate removes the security tag, then walk out.

Virtual reality is another program Macy’s is testing in stores. It’s testing this with furniture where a shopper can wear a headset and see furniture for sale at Macy’s in the room in her home she is trying to furnish. She can see the products virtually in her own room and adjust the products and layout until she discovers what works best. This helps the retailer save floor space in stores, Gennette said. It plans to offer the feature in 60 stores by the summer.


Macy’s Scan. Pay. Go. service enables shoppers to walk into a store, select items they want to buy,

scan the bar code on the items and pay in the app.



50


inside its traditional store locations. It’s putting Backstage stores in some premium malls and expanding the store concept to the West Coast, Gennette said.

Another step Macy’s is taking to spur growth and react quicker to market changes is a gradual shift to the agile development philosophy in which a project is broken up into small phases and the overall goal evolves as staffers complete each phase.

He added that Macy’s has brought in new talent and “massively simplified” its organizational structure.

Macy’s in December named Jill Ramsey, an e-commerce veteran who most recently worked at eBay Inc., to fill the new position of chief product and digital revenue officer. She reports to Hal Lawton, who left eBay in September to become president of Macy’s.

“We are in the early innings (of these improvements) but we are headed into 2018 with momentum. We realize you can’t starve one to feed the other,” Gennette said of stores and digital.

The merchant aims to provide clearer value to shoppers by simplifying its loyalty and discounts programs to reduce the amount of “Macy’s math gymnastics” shoppers encounter to figure out how to use discounts and promotions to get the most value, Gennette said. In the fourth quarter, Macy’s relaunched its loyalty program.

On the value front, Macy’s also is opening more branches of its discount Macy’s Backstage stores,

Macy’s is opening more branches of its discount Macy’s Backstage stores, inside its traditional store locations.




Saks offers far fewer omnichannel features than its competitors. For example, while it has an app, it doesn’t offer many features in the app that Nordstrom and Macy’s do, like barcode scanning or location awareness. Saks also lacks more basic omnichannel features such as local store inventory counts, mobile devices for store associates and in-store kiosks. There is no Android version of the app.

Saks declined to comment for this report.

STORE LOCATION700 N . Michigan Ave .Chicago, IL 60611


DATA2017 Total Sales $11,412,379,539

2017 Web Sales $1,888,757,2591



Number of Stores 39

SAKS FIFTH AVENUE 2


2. Saks Fifth Avenue is a secondary brand of Hudson’s Bay Co. Top 1000 rank and financial information is based on its parent company.



52


LOWE’S COS. INC.SCORE: 57 (TIED)

THE HOME DEPOT INC. SCORE: 57 (TIED)

HOME IMPROVEMENT



53

POINT VALUETHE HOME DEPOT

INC. LOWE’S COS. INC.Do they have a mobile app? Yes = 5 5 5








Registry on app Yes = 3 | NA = not applicable NA NA


Online price matching Yes = 5 NA1 NA1





HOW THE COMPETITION STACKS UP • HOME IMPROVEMENT

1. Site/app shows local, in-store pricing



54

POINT VALUETHE HOME DEPOT

INC. LOWE’S COS. INC.Buy online pick up in store Yes = 5 5 5



















Home Depot and Lowe’s both deliver well on key tenets of omnichannel retail, but our researcher’s experience shopping with these retailers revealed some areas that can use refining.

For both merchants, the ordering experience online and in app highlighted the volume of products available online, but unfortunately, at the same time, showed how only a fraction of the SKUs offered online are actually available in local stores for same-day pickup. For instance, our researcher shopped for replacement shower

knobs. Only a handful of generic styles were available in stores. Home Depot made a more unique style available for purchase with free shipping to the store and in-person pickup, with an estimated pickup time of seven to 10 days—a long wait. “Based on this estimate alone, I would not have ordered this product from Home Depot if I wasn’t conducting this test,” our researcher notes. “Visiting Amazon.com, a near-identical option was available for Prime same-day delivery and cost $1 less per unit.” However, our researcher notes that the order placed with Home Depot was

THE HOME DEPOT INC.7200 Woodward Ave .Woodridge, IL 60517


DATA2017 Total Sales $100,904,000,000

2017 Web Sales $6,781,042,5751




HOME DEPOT AND LOWE’S





actually available for pickup at the store in five days. A sharper estimate on delivery time could influence consumers’ purchasing decisions, she writes. Meanwhile, at Lowe’s, a similar knob style was available for purchase but only with paid-for shipping (the total was less than the $50 threshold to get free shipping) to a home address, also with a week’s delivery window. Store pickup was not an option.

Our researcher eventually ordered a handful of products available for same-day pickup to

conduct an apples-to-apples test. Both retailers processed the order and sent email notifications that the orders were ready in about two hours. Home Depot also offered to notify by SMS text, which was a nice option, and one our researcher did not see offered by Lowe’s. Orders were immediately reflected in the mobile app; however, in the Lowe’s app, the order continued to display as “in progress” more than 12 hours after the email was sent to say the order was ready for pickup. The Home Depot app synced order status more appropriately.

LOWE’S COS. INC.245 S . Weber Rd .Bolingbrook, IL 60490


DATA2017 Total Sales $68,619,000,000

2017 Web Sales $3,056,882,6171




HOME DEPOT AND LOWE’S (CONTINUED)




57

Home Depot provided a more integrated in-store shopping experience. As noted earlier, the Home Depot app recognized our researcher was in the store and changed to an “in store” mode. This changed the app home page to include an in-store map to guide her and promoted the scanning feature that enabled her to scan a barcode to get more information. Lowe’s also offered this scanning feature, however, it did not recognize that she was in the store. Home Depot did not have free in-store Wi-Fi; Lowe’s did.

Overall, our researcher felt the in-store signage about the availability of additional products online and different features available via the app was nominally better at Home Depot. Associates at both stores were well-informed on how to search for and order products not available in store online. Associates at both stores carried smartphones that could look up information. However, they both brought our researcher to an ordering kiosk where they could more readily display information and assist with an order (kiosks were not self-serve; an associate had to provide assistance).

The orders were held at the service desk and pickup was smooth and fast. At the Lowe’s store visited a dedicated pick-up desk for online orders is being assembled two steps inside the store, but at the time of evaluation, our researcher was required to visit the customer service desk to retrieve her order. She was told the new web order pick-up desk would be operational in the coming days. Lowe’s had the edge on Home Depot on the pick-up process—signage made it clear from the moment she pulled into the parking lot where to go, and there were two parking spots reserved for customers picking up orders—an option not available at the Home Depot store visited.

Surprisingly, the Lowe’s confirmation emails did not explicitly inform our researcher where to go retrieve to her order except to say to visit the store. (Once she arrived, it was obvious where to go.) Home Depot confirmation emails explicitly told her to visit the customer service desk at the store. That desk is about 30 feet inside from the entrance, and there were decals on the floor directing her where to go. Both stores had the orders ready and retrieval was easy.


Home Depot’s app features an “in store” mode that assists in locating products.

HOME DEPOT AND LOWE’S (CONTINUED)



58

ton of visits to our website, but 93% of our sales are still in stores.”

Such initiatives aren’t cheap. For example, Home Depot in late 2017 said it plans to spend $5.4 billion specifically to improve omnichannel. And Home Depot in April announced it is hiring more than 1,000 technology professionals to power the $11.1 billion investment it is making in technology through 2020. The retailer has technology hubs in Atlanta, Austin, Dallas, Houston, Portland, Oregon, and San Mateo, Calif.

“We are doubling our investment in omnichannel,” Abbott says.

Late last year, Home Depot bought the retailer The Company Store as an inroad to home décor and design. “It used to be you came to us for the shingles or drywall and now we want you to come to Home Depot to complete the look as well,” he says.

Dave Abbott, vice president of integrated media for The Home Depot Inc., says a decade ago the mentality at Home Depot was that consumers will never buy plywood online, so why invest heavily in e-commerce? But he says customers have shown they want a robust e-commerce site, both for ordering and for store information. “Our customers have demonstrated through their actions that they want to do research online before they head to a store,” he says. That’s why Home Depot’s site offers robust local store data, such as stock levels down to the number of SKUs. “If you need 10 items of a specific SKU, you want to know a store has that many before you go. It’s no good if we only have two.”

HomeDepot.com logged 1.8 billion visits in 2017, Abbott says. “A lot of those customers have no intentions of buying online,” he says. “But they want to know, ‘How do I get in and out of a store as quickly and painlessly as possible?’ We get a


RETAILER FOCUS | THE HOME DEPOT INC.

Store customers flow from Home Depot’s website

‘Our customers have demonstrated that they want to do research online before they head to a store.’

—Dave Abbott, vice president of integrated media for The Home Depot Inc.



59

10% of Home Depot’s online orders originate in the store as consumers and associates interact for a web purchase, and the vastmajority of online orders that are returned are returned to stores.

Home Depot’s e-commerce site surpassed 1.8 billion visits in 2017.

Home Depot’s online sales have grown by approximately $1 billion in each of the lastfour years.

Home Depot has more than 2,000 stores and400,000 store associates.

On Home Depot’s website, each store has its own page, Abbott says. Not all Home Depot stores offer the same products and services, he says, so this is helpful for shoppers. For example, only some stores offer equipment rentals. Home Depot also will ship an online order from one store to another store that is closer to the shopper for pick up, Abbott says.

In 2017, Home Depot launched a tool that lets a shopper—often a tradesperson or contractor— view inventory from a specific store near his worksite, purchase a product from that store online and have it delivered the same day. The retailer also will tell shoppers on its site and app precisely where an item in a specific store is located—down to the aisle—in each of its sprawling home improvement superstores.

Home Depot stats and facts:

Home Depot’s online sales grew 21% in the fourth quarter and 21.5% in fiscal 2017—nowrepresenting 6.7% of its total sales.

46% of U.S. online orders are picked up in aHome Depot store.


46%Portion of Home Depot U.S. online orders that are picked up in a store.



60

Scott Ross, senior vice president of omnichannel technology for home improvement retailer Lowe’s Cos. Inc., says omnichannel means operating on the consumer’s terms.

That “customer-first” spirit of omnichannel also means that omnichannel can change as customers’ preferences for shopping and buying change, he says. “It’s not static. That’s why the technology we build and put in place is designed to be flexible.”

To make getting questions answered easier for shoppers, Lowe’s is allowing shoppers to ask questions in ways beyond email. For example, it is one of the first four companies chosen to pilot Apple Business Chat, which lets Apple iOS mobile users connect with companies to ask questions, schedule appointments and make purchases from the Messages app on their Apple smartphones. This eliminates the need to

download apps for each business they want to communicate with.

Lowe’s also is working on communication in stores. For example, store employees are equipped with mobile devices that enable them to find a product the shopper is looking for, reach out to contact another store associate to answer a question—rather than the employee having to fetch his colleague on the other side of the sprawling supercenter—and to check out shoppers if necessary. Shoppers also can create a shopping list using the My Lowe’s feature and share it with a store associate to get help locating all the items on the list. Lowe’s also shows shoppers via its mobile site and app where a product is located in each store down to the aisle and bay.

The home improvement retailer also is making a concentrated effort to accelerate home services sales. For example, if a customer orders a new


RETAILER FOCUS | LOWE’S COS. INC.

Omnichannel means ‘omni’ ways to serve customers

Lowe’s was chosen to pilot Apple Business Chat, which lets Apple iOS mobile users connect with companies to ask questions, schedule appointments and make purchases from the Messages app.



61

Lowe’s also is now testing a service that uses augmented and virtual reality to help consumers visualize products, such as new carpet or fashion plumbing, to scale in rooms in their homes.

Lowe’s stats and facts:

Lowe’s online sales have grown more than 10-fold over the past five years.

Online sales grew more than 30% last year. 40% of digital orders are picked up in a store. The retailer has rolled out and is continuing to

add designated parking spots for online orderpick up.

Lowe’s also is rolling out smart lockers for online order pick up in stores.

garage door, Lowe’s wants to be the company to install it. To this end, the retailer is beefing up its online services capabilities by enabling shoppers to book home installation appointments online down to the day and hour.

Ross says home improvement lends itself to offering much more omnichannel functionality than, for example, a sporting goods or apparel retailer, because the purchase process is longer, requires multiple decisions and is often more about a project than a specific product.

“Home improvement is more complicated than buying a pair of pants or shoes,” Ross says. “A bathroom remodel is more emotional and requires many more products and decisions.”


‘Home improvement is more complicated than buying a pair of pants or shoes.’—Scott Ross, senior vice president of omnichannel technology, Lowe’s Cos. Inc.



62


TARGET CORP. SCORE: 65

WALMART INC. SCORE: 67

MASS MERCHANT



63

POINT VALUE WALMART INC. TARGET CORP. Do they have a mobile app? Yes = 5 5 5








Registry on app Yes = 3 | NA = not applicable 3 3


Online price matching Yes = 5 5 5





HOW THE COMPETITION STACKS UP • MASS MERCHANT



64

POINT VALUE WALMART INC. TARGET CORP. Buy online pick up in store Yes = 5 5 5



















Walmart and Target took the first and second spots, in that order, among all retailers evaluated.

Since our researcher knew it was going to be a tight race between these two huge and competitive retailers, in an effort to minimize variables, he purchased the same item from both retailers (a Stanley tool set) and made the purchases online at the same time and with the same payment method.

“Both retailers had my order ready to go on the day of my purchase, but Target had it ready to go

in less than an hour,” our researcher notes. “I made my order around noon, so if my plan had been to make a quick order during my lunch break and then pick up the item on my way home from work, Target’s timeframe would have allowed for this, but the Walmart order might have been ready just a little too late.”

Walmart offers unique incentives. For example, it offers a Pickup Discount program that provides cheaper prices on select items when a consumer buys online and picks up in store, our researcher notes.

STORE LOCATION6702 Seawall Blvd .Galveston, TX 77551


DATA2017 Total Sales $500,300,000,000

2017 Web Sales $25,549,300,0001




WALMART INC.




66

Walmart also holds pickup items at the store for a full week, while Target holds them for two days, our researcher adds.

In addition to all the features noted earlier about Walmart (see: Chart: Overall Scores/Section: The Big Picture), the retailer also offers dedicated parking spots for online grocery order pickups. It also offers Wi-Fi in store, the ability to return online orders to stores, wayfinding, geolocation/location awareness and barcode scanning, and it equips associates with mobile devices.

Walmart also has added robust store functionality to its app. For example, to make returns faster and easier, late last year the retailer also added a feature to its app that allows shoppers to initiate the return of items bought online before going to the store. Once there, shoppers move through a dedicated express lane to scan the products and hand them over. The new system is meant to shave the average time it takes to process a return from about five minutes to 30 seconds. Shoppers also can use the Walmart app and their phone to pay at the store with Walmart Pay.


WALMART INC. (CONTINUED)

Walmart’s Mobile Express Returns system is meant to reduce the average time it takes to process a return from about five minutes to 30 seconds.




Target is a solid player in omnichannel as well, coming in at No. 2 among all 24 retailers. The chain gets points for providing exact inventory levels, and its robust and popular app shows store shoppers deals as they navigate a specific store. Most online orders are available for pick up at Target stores in less than one hour, according to our researcher. It also offers in-store Wi-Fi.

While Walmart took home gold using the straight scoring system, our researcher notes he would give Target the edge. “My Walmart experience wasn’t bad, but the Target employees were definitely a little friendlier,” he writes. Also, he points out that Target’s email and text notifications were in a more casual/friendly style: ‘Thanks for your order (you’re pretty awesome)” and “Yay! Your order is ready for pickup.”

Like Walmart, Target is investing heavily in tying together stores, mobile and the web. For example, Target is testing a service called Drive Up that offers dedicated parking spots where associates bring orders to a shopper’s car. Target in April said it plans to offer Drive Up fulfillment in nearly 1,000 stores by year-end. Drive Up service is now available in nearly 270 stores. The expansion to about 1,000 stores by the end of the year would amount to roughly 56% of the retailer’s nearly 1,800 stores. The service enables a consumer who places an order using the Target app to select “Drive Up” as her fulfillment option. Target then notifies the shopper when her order is ready, which the retailer says is typically within one to two hours. When the consumer is ready to pick the items up, she selects the “I’m On My Way” button within the app and then parks in a designated Drive Up spot. Target says orders arrive within two minutes of a consumer’s arrival. The program is currently available at some Target stores in Florida, Texas, Alabama, Georgia, Louisiana, Mississippi, Oklahoma and South Carolina.

STORE LOCATION6128 Broadway St .Galveston, TX 77551


DATA2017 Total Sales $71,879,000,000

2017 Web Sales $3,791,920,0001




TARGET CORP.




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BASS PRO SHOPS INC.SCORE: 25

RECREATIONAL EQUIPMENT INC.SCORE: 39

DICK’S SPORTING GOODS INC.SCORE: 41

SPORTING GOODS



69

POINT VALUEDICK’S SPORTING

GOODS INC.RECREATIONAL

EQUIPMENT INC.BASS PRO SHOPS

INC.Do they have a mobile app? Yes = 5 5 5 0















HOW THE COMPETITION STACKS UP • SPORTING GOODS



70

POINT VALUEDICK’S SPORTING

GOODS INC.RECREATIONAL

EQUIPMENT INC.BASS PRO SHOPS

INC.Buy online pick up in store Yes = 5 5 5 5



















Both Dick’s and REI provided similar omnichannel experiences. Both have mobile apps, but they’re basically a portal to their websites, taking little advantage of mobile technology beyond notifications. And even the notifications our researcher received during the short trial period were all marketing-related and not part of his shopping experience.

Finding information about in-store items wasn’t straightforward on either company’s website. For example, our researcher had to initiate the search first, then tick a box to initiate in-store search. On REI’s site, after choosing a store location, a couple items that appeared in search results weren’t actually available at the selected store once he navigated to the product page.

REI declined to comment for this report.

Dick’s website provided a “Sold in Stores” checkbox but didn’t allow our researcher to search a specific store’s inventory. That meant site

searches often returned items that are available in stores generally but out of stock at a specific local store. Once on the product page, a shopper can check in-store availability at a specific store.

DICK’S SPORTING GOODS2763 W . 75th St .Naperville, IL 60540


DATA2017 Total Sales $8,590,472,000

2017 Web Sales $1,121,813,0001




DICK’S AND REI





Dick’s won for its conversational emails. Our researcher’s order confirmation subject line was “Don’t leave yet! We’re processing your order.” When his order was ready, the email was titled “Ready when you are!” “I’m not always a fan of brands trying to be people, but this was good at grabbing my attention in a crowded email inbox,” our field researcher writes.

The pick-up operation was smooth at both stores. Dick’s had a dedicated counter with an automated pickup kiosk. Our researcher was able to scan a barcode in his email, confirm his name and an associate brought his order to the counter where he was waiting.

At REI, our researcher had to wait for a cashier, but after providing his name, it was a fairly speedy process. The order was waiting behind the counter for him with his name in big type, making it easy for the associate to find. Signage was also very clear at REI, while the kiosk at Dick’s was a little more subdued (associates had to point him in the right direction as he walked in).

RECREATIONAL EQUIPMENT INC.17W160 W . 22nd St .Oakbrook Terrace, IL 60181



2017 Web Sales $781,632,0001




DICK’S AND REI (CONTINUED)





Bass Pro offered the worst omnichannel experience, according to both our score sheets and our researcher. Despite shopping online only for items Bass Pro said were also sold in stores, and confirming availability on the product page, during checkout the item was listed as not being available for store pickup for 5-7 days. While our researcher initially thought this was an error, it in fact took five days for his order to be ready for retrieval. Bass Pro did not respond to multiple requests for comment on its omnichannel programs.

Bass Pro also lacks an e-commerce app. Its Cabela’s brand does have an app—Bass Pro acquired Cabela’s in 2017—but it’s more basic than its competitors in the Sporting Goods category. For example, the store-locator service doesn’t use geolocation but is a simple web page that requires a customer to enter her ZIP code to find a nearby store.

On the Bass Pro website, a shopper must choose a store from a lengthy drop-down menu instead of entering her ZIP code to find a nearby store or

the site using location detection. Shoppers also can’t search products by in-store availability. Shoppers can check store inventory on product pages. However, the store a consumer picks there doesn’t transfer to the purchase page if she picks Ship to Store. It must be reentered at checkout. Additionally, when our researcher placed an order, the order confirmation email was misaligned in our researcher’s inbox with text crammed to the right side and images not rendering properly.

Finally, when our staffer went to pick up his online order at the store, the pickup area wasn’t clearly marked. When he presented his order number and ID for pickup, it took about six minutes for the store associate to deliver the order. Additionally, the pickup area was placed before the turnstiles at the entrance of the store, meaning shoppers aren’t encouraged to stick around and shop for additional merchandise.

Bass Pro Shops ranked last in the findings among all retailers.

STORE LOCATION709 Janes Ave .Bolingbrook, IL 60440


DATA2017 Total Sales $9,670,509,1801

2017 Web Sales $1,152,724,6941




BASS PRO SHOPS INC.2


2. Bass Pro Shops Inc.’s financial information includes Cabela’s Inc., which it acquired in 2017.



74


FOREVER 21 INC.SCORE: 38

AMERICAN EAGLE OUTFITTERS INC.SCORE: 42

URBAN OUTFITTERS INC.SCORE: 46

TEEN APPAREL



75

POINT VALUEURBAN

OUTFITTERS INC.AMERICAN EAGLE OUTFITTERS INC. FOREVER 21 INC.

Do they have a mobile app? Yes = 5 5 5 5















HOW THE COMPETITION STACKS UP • TEEN APPAREL



76

POINT VALUEURBAN

OUTFITTERS INC.AMERICAN EAGLE OUTFITTERS INC. FOREVER 21 INC.

Buy online pick up in store Yes = 5 5 0 5



















Urban Outfitters scored the highest and is the only retailer in this category that had clear signage for where to pick up online purchases, but its ordering process proved to be the most difficult experience.

The first time our researcher placed an online order for in-store pickup with Urban Outfitters, it was canceled. The message she received said:

“Unfortunately, your order has been cancelled due to no response to our request to validate your order. You have not been charged for any cancelled merchandise. We apologize for any inconvenience this may cause.” Our researcher did not receive a request for validation. The order was placed at 11:09 a.m., and Urban Outfitters canceled it at 11:14 a.m.

Our researcher contacted customer service both via the contact form on the website and through the customer service call line. The customer service associate could not tell her what needed to be validated to process the order. She requested that information from her supervisor and said our shopper would hear back in 24-48 hours.

Our researcher received an e-mail response the next day (it’s unclear whether that was a result of the email or customer service call): “Thank you for contacting us. We sent you an email prior stating that you needed to verify some information concerning your payment method. The email may have been sorted to your spam mail. However we did not hear

STORE LOCATION20 S . State St .Chicago, IL 60603



2017 Web Sales $1,661,263,1691




URBAN OUTFITTERS INC.




78

from you in a timely matter therefore unfortunately your order has been cancelled.” Our researcher did not receive anything in her email or spam folder.

After a later successful order attempt, our researcher went to retrieve her order at a store. She could see the signage for “In-Store Pickup” from the door, even though it was behind the checkout counter and in the corner. There was one cashier working, so it was unclear whether there is generally a line designated for in-store pickup and if that would be under the sign. The cashier retrieved her package from the backroom in less than five minutes. “The pickup and return process was easy, but the difficulty in placing the order soured the experience,” our researcher notes.

Urban Outfitters offered a barcode scanner in its mobile app with a barcode icon in the search bar, but did not alert our researcher or know when she was in or near their stores. The retailer allowed a shopper to reserve or buy online/pickup in store and see what was in stock/out of stock in its app.

Urban Outfitters declined to comment for this report.


URBAN OUTFITTERS INC. (CONTINUED)




American Eagle scored in the middle. Reserve online, try on in store is available in all American Eagle Outfitters stores, but BOPIS is not available at any AE store. Shoppers can reserve up to five items at a time and the retailer will send a separate message about each item’s status. Shoppers cannot use online discounts for items, even if reserving them online. Reserved items are held only until the end of the next business day, likely since the shopper has not committed to buy.

After our field researcher placed an order around 11 a.m., she received a text message alert suggesting she opt-in for text alerts about her reserved item, which she did. The email said her item would be ready within an hour during store hours. The next morning around 11:30 a.m., she received a text message alert

and email saying her order had been canceled, and it did not provide a reason. She placed another and was told it was ready for try on the next day.

There was no clear signage of where to retrieve her reserve/try and buy order, so she went to the checkout counter. The employee retrieved her item from the back and asked if she wanted to try it on.

Shoppers likely appreciate not needing to commit to buy before reserving their items. But the system could use some refining where timeliness is concerned, our researcher notes.

American Eagle Outfitters offered a barcode scanner in its mobile app with a barcode icon in the search bar, but did not alert our researcher or know when she was in or near their stores. The retailer allowed a shopper to reserve or buy online/pickup in store and see what was in stock/out of stock in its app.

American Eagle Outfitters did not respond to a request for comment for this report.

STORE LOCATION835 N . Michigan Ave ., Suite 7080Chicago, IL 60611



2017 Web Sales $1,000,000,000




AMERICAN EAGLE OUTFITTERS INC.





Forever 21 scored the lowest because it lacked in-store Wi-Fi and seems to ship items from its fulfillment center rather than use in-store stock for buy online, pick up in store. Forever 21 took the longest for an item to be available via BOPIS.

Our researcher tried to use BOPIS for several different items at Forever 21, but none were available for in-store pickup at her nearest store in downtown Chicago. So, she finally opted for another store location in a nearby Chicago neighborhood.

No information was provided in store for where to pick up her purchase. Our researcher went to the checkout counter and told the sales associate that she was there to pick up an online order. She showed

her the email receipt on her phone, and the associate disappeared to the backroom. Our researcher waited for about five minutes before the employee returned with her package, wrapped how she would receive it if it was shipped to her home. Forever 21 took the longest out of the three retailers evaluated for an order to be ready for store pickup—several days—likely as long as if our researcher was ordering it to be shipped to her home. However, the retailer provided free shipping to the store. “Otherwise, it’s $4.95 shipping to my apartment in Chicago,” our researcher notes. “Free shipping to your home only applies if your online order comes to at least $50.”

Forever 21 offered a barcode scanner in its mobile app with a barcode icon in the search bar, but did not alert our researcher or know when she was in or near their stores. The retailer allowed a shopper to reserve or buy online/pickup in store and see what was in stock/out of stock in its app.

Forever 21 did not respond to a request for comment for this report.

STORE LOCATION865 W . North Ave .Chicago, IL 60642


DATA2017 Total Sales $1,060,496,1571

2017 Web Sales $147,621,0651




FOREVER 21 INC.




81


UNTUCKITSCORE: 26

AMAZON BOOKSSCORE: 41

WARBY PARKERSCORE: 42

WEB MOSTLY



82

POINT VALUE WARBY PARKER AMAZON BOOKS UNTUCKITDo they have a mobile app? Yes = 5 5 5 0















HOW THE COMPETITION STACKS UP • WEB MOSTLY



83

POINT VALUE WARBY PARKER AMAZON BOOKS UNTUCKITBuy online pick up in store Yes = 5 5 0 0



















Only one retailer, Warby Parker, offered buy online, pick up in store in this category. However, Warby Parker ships online orders to a store. They are not available that day for pickup.

Warby Parker has some innovative omnichannel features going for it. It has two apps—one that lets a consumer shop for frames and another called “prescription check” that is a telehealth service

that, if you are eligible, allows an eye doctor to assess the view through your glasses and provide an updated eyeglasses prescription. Both are only available on Apple iOS devices. The retailer also offers great details on its website about each store. For example, some stores offer a 10-minute prescription check, others offer complete eye exams, while still others only allow consumers to select and buy frames. Each store has a listing saying what it offers and a picture of the store. Shoppers can toggle to see only stores where they can get an eye exam or update a prescription.

“You can also get directions to a store on your mobile device via the app,” our researcher writes. The store associate easily completed our researcher’s return with a mobile device, and stores also promote Warby Parker’s prescription check app with a paper flyer.

A few misses include the store having Wi-Fi but requiring a passcode that was not displayed. Consumers can have online orders shipped to

STORE LOCATION4465 La Jolla Village Dr .San Diego, CA 92122


DATA2017 Total Sales $325,000,0001

2017 Web Sales $253,500,0001



Number of Stores 65

WARBY PARKER




85

glasses, sunglasses and accessories are available for purchase and to take home from the store.

In March, Warby Parker raised $75 million and the eyeglasses retailer has raised $290 million to date. The New York-based retailer also announced in March that it is profitable. 2018 will be the first full year that Warby Parker will be profitable, a spokeswoman says.

a store for pick up but our researcher had to contact customer service to ask how to do this. After contacting customer service, our researcher was simply instructed to input the store address. “You cannot buy online to actually pick up in store from store inventory,” our researcher writes.

When the eyeglass case our researcher ordered arrived at the store, our researcher received a friendly email directly from a store associate: “Hey there, Katie! This is Erica at Warby Parker UTC. It looks like you ordered one of our geometric cases (so cute) and it’s just arrived at the store! Drop in at your earliest convenience and we’ll have it ready for you. Thanks for shopping with us!”

While the store doesn’t offer dedicated counters/lanes for online orders, signage on where to pick up web orders or special counters for online order pickup, our researcher notes the store is small and such details are not necessary.

Warby Parker ships prescription eyeglasses purchased in store to the customer’s home—she doesn’t leave with them. However, nonprescription


$290 millionAmount Warby Parker has raised to date

WARBY PARKER (CONTINUED)




Amazon Books offered most of the other omnichannel features besides BOPIS that our researcher analyzed. Amazon Books bookstore heavily promotes mobile and other web-based Amazon products such as its Echo voice-activated home device, our researcher notes. The books do not feature store-placed price tags, which our researcher found odd. Shoppers must scan a book with her Amazon app to get the price or take the book to a kiosk for pricing data. “They likely encourage users to scan the book with their Amazon app for pricing info so that they can collect more data on you,” our researcher writes. Amazon Prime members get the same prices as Amazon.com on products they purchase in store. Non-prime members pay the list price printed on the back of the books.

Amazon Books doesn’t have its own standalone app but instead shoppers use the main Amazon shopping app, navigate to Amazon Books under Programs & Features and select a local store to search product availability. Shoppers can pay in stores using their Amazon account or a payment card. But the store doesn’t accept cash. Even if a shopper uses her Amazon account to pay she still must visit a register to check out, which doesn’t seem to be the most efficient omnichannel experience, our researcher writes.

Amazon views Amazon Books as another way to engage with customers, Mariana Garavaglia, director of stores, Amazon Books, said earlier this year. “Amazon Books is a physical extension of Amazon.com,” she says. The stores aim to serve as a “discovery mecca” where consumers can interact with books. “Our customers tell us they love browsing our shelves, seeing all of the book covers face out, reading recommendations from fellow book lovers and interacting with different devices,” she says.



DATA2017 Total Sales $177,900,000,000

2017 Web Sales $149,957,000,0001



Number of Stores 15

AMAZON BOOKS 2


2. Amazon Books is a secondary brand of parent company Amazon.com Inc. Top 1000 rank and financial information is based on its parent company.




Untuckit sells shirts for men and women designed to be worn without being tucked in, along with other clothing items online at Untuckit.com and through 26 bricks-and-mortar locations.

Untuckit comes in third among the evaluated web-mostly retailers. However, it offers a few omnichannel features. The site will tell a shopper if an item is available at a store near him but doesn’t provide stock counts. It doesn’t offer an

app. However, associates use mobile devices to check out shoppers, and there were no traditional registers at the store our researcher visited. The retailer sends shoppers text message shipping updates if he opts in to receive them and consumers can return online orders to stores. The retailer also uses Happy Returns, a business that works with online retailers to accept returns of online purchases at what it calls Return Bars in high-traffic areas like shopping malls.



DATA2017 Total Sales $112,500,0001

2017 Web Sales $90,000,0001



Number of Stores 25

UNTUCKIT




88

Untuckit CEO and co-founder Aaron Sanandres tells Internet Retailer he plans to open 17 more Untuckit stores this year. “That’s a pretty ambitious goal, but underscores our bet on retail,” Sanandres says. Those 17 stores will up the retailer’s store count to 53. But online still reigns when it comes to sales—75% of Untuckit’s sales still happen online, he says.

Sanandres uses the words retail and omnichannel interchangeably because he says customers don’t think about retail in terms of omnichannel, they think of retail in terms of service and convenience.

Sanandres says he knew soon after launching Untuckit in 2010 that the company would need to provide its customers with stores. “Our customers simply wanted it,” he says. “Customers wanted to be able to touch and feel the shirts. Implicit in their requests was a shared view that retail outlets help establish a level of trust that an online-only

company can’t—or would find it difficult—to match. So, for us, it wasn’t a question of if, but rather when,” he says.

Untuckit’s first step into offline retail took place in the fall of 2015, when it opened a pop-up store in the Soho neighborhood of New York City. “We used the preceding years priming the market with brand awareness—a product of a rigorous


RETAILER FOCUS | UNTUCKIT

How web-only retailer Untuckit tailors stores

Untuckit’s first pop-up store opened in the Soho neighborhood of New York City in 2015.



89

which operates 48 “guideshops” that provide shoppers with fittings and try-ons through one-on-one appointments. However, shoppers don’t walk out with anything at those shops; the “guides” place orders for customers and clothes are shipped to customers.

Untuckit focused on premium locations for its retail stores from the beginning. “Finding the right co-tenants for a new brand is pivotal, and we were willing to pay a premium for that,” Sanandres says

The No. 1 metric to gauge omnichannel success is usage, he says. “I want our customers to take advantage of the convenience we’re trying to provide. For now, that means driving online customers to stores and driving store customers to online.”

marketing effort—and wanted to test whether we could support a retail position in a geographically desirable, high-traffic and high-rent location,” Sanandres says.

For Untuckit, Sanandres says omnichannel is an approach to sales that seeks to improve the convenience of shopping. For a retailer born online, this starts with ensuring the online store is shoppable across the range of digital devices customers use. For retailers whose customers covet the convenience of the internet, it might end there, he says. For others, like Untuckit, it moves beyond this into providing a retail outlet. “Once you have an online and retail presence, it’s then about refining the convenience of each of those channels by allowing customers to shift seamlessly across your channels and offering things like buy online, return in store.”

He adds that one feature that sets Untuckit apart from some of its ‘click-to-brick’ peers is its stores carry inventory, so customers are able to walk out of the store with product. That’s different from digitally native competitor Bonobos, for example,


‘Once you have an online and retail presence, it ’s then about refining the convenience of each of those channels.’

—Aaron Sanandres, CEO and co-founder, Untuckit

CATEGORY ANALYSIS

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In evaluating category scores and researcher field notes, it was clear that a couple categories had multiple strong competitors with high scores. And one category had mainly lower scores.

The two mass merchants we visited, for example, nabbed the No. 1 and the No. 2 spots, with Walmart scoring 67 points and Target a close second with 65. Meanwhile, Home Depot and Lowe’s actually tied at 57 points each and scored near the top of the rankings. Additionally, the web-mostly players scored near the bottom with an average score of 36.

A closer looks reveals similarities between the stronger and weaker omnichannel players. The stronger players all have very deep pockets, massive networks of stores and strong bases of loyal store shoppers. At the lower-scoring web-mostly players, stores are mainly used as a value-add to the mainly digitally focused brands and their similarly minded core customers.

ROOTS IN STORES WEB MOSTLY: WHERE

CLICK TRUMPS BRICK



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Target, Walmart, Home Depot and Lowe’s have much more cash and many more stores than, say an Untuckit (which has 26 U.S. stores) or even an Ulta (about 1,000 U.S. stores). Walmart, for example, has more than 5,000 stores and Sam’s Clubs nationwide, while Target boasts around 1,800 stores. Home Depot has about 2,200 stores while Lowe’s has roughly the same.

At the strong-scoring chains, stores are an essential part of the business—and all of these top omnichannel retailers are investing signifi-cantly in omnichannel (both in omnichannel services but also in marketing about how to use the services). These big legacy chains are using their store footprints to their advantage and are using the web and mobile web to better serve and inform shoppers about their local stores. They’re also aiming to encourage their massive bases of loyal store shoppers to shop across channels in the hopes that they will spend more money.

For example, Walmart said in April that it is relaunching its e-commerce site to offer

personalized elements including top, or trending, items in a shopper’s location and online order status—but it also is tying stores to its redesign. The new site will include a consumer’s local store profile that will showcase the services available within her location, such as Walmart’s online grocery service and its easy reorder service, which lets shoppers repurchase the items they buy most frequently in stores and online.

Walmart also recently announced it is working with on-demand delivery company Postmates Inc. As a start, Postmates began delivering groceries from Walmart stores to customers in Charlotte, N.C., in April. Walmart’s grocery delivery servicewill roll out to more than 40% of U.S. households by the end of the year, the retailer says. Earlierthis year, Walmart also began adding assistantstore managers (it will add about 1,700, accordingto reports), who will oversee fast-growing areas like online orders being picked up andreturned to stores.

Target, meanwhile, is in the midst of rolling out same-day delivery of groceries and other items

CATEGORY ANALYSIS • ROOTS IN STORES

Walmart’s grocery delivery service will roll out to more than 40% of U.S. households by the end of the year.



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CEO Brian Cornell said at a conference earlier this year. Those impulsive purchases amount to lots of sales for Target. But Target wants to allow shoppers to shop in any channel they choose, Cornell said.

At Home Depot, another omnichannel leader, 93% of sales still occur in stores—however, HomeDepot.com still logged 1.8 billion visits in 2017, says Dave Abbott, vice president of integrated media at Home Depot. In fact, 46% of U.S. online orders are picked up in a Home Depot store. 10% of Home Depot’s online orders also actually originate in the store as customers and associates interact for a web purchase, and the vast majority of online orders that are returned are returned to stores, Abbott says. Many shoppers that visit the Home Depot website have no intention of buying online, but they are checking if a product is in stock and in-stock count at their local store. They also are seeking where an item they intend to buy in a store is located before they venture out to avoid wandering the supercenter for a half hour and are checking to see if the store offers specific services like truck or equipment rentals.

via Shipt from stores across the U.S. The service—which costs $99 a year for unlimited deliveries—will initially encompass categories like groceries, household essentials and electronics before expanding to all major product groups by the end of 2019. Target acquired Shipt, a delivery service, for $550 million in December 2017.

In another project, Target is expanding a service that lets consumers at select urban stores have their store purchases delivered to their homes later the same day. The service will be available in nearly 60 stores in Boston, Chicago, New York City, San Francisco and Washington, D.C. It also recently rolled out Restock nationwide. Restock allows shoppers to choose from more than 30,000 household products and then have their purchase delivered to them from a Target store by the next day.

Digital is a careful line for Target to walk as it wants to drive shoppers into its stores. “You all know how people say they came into Target for toothpaste and left with $100 worth of stuff,”

CATEGORY ANALYSIS • ROOTS IN STORES

Digital is a careful line for Target to walk as it wants to drive shoppers into its stores. ‘You all know how people say they came into Target for toothpaste and left with $100 worth of stuff.’

—Brian Cornell, CEO, Target



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Conversely, web-mostly players as a group were some of the lower-scoring retailers we visited with an average score of 36. These players have roots in the web and have opened stores as more of a value-add for shoppers who want to touch, feel or examine the merchandise in person. For example, at Untuckit—which scored 26 points and began venturing offline in 2015, five years after its launch in 2010—75% of sales are still online, says CEO and co-founder Aaron Sanandres. The retailer has 36 stores and plans to open 17 more this year, Sanandres says.

Stores for many digitally native brands are complementary and don’t carry the deep roots as they do with larger, more established chains. For example, only one of the web-mostly players, Warby Parker, offered buy online, pick up in store and, as aforementioned, even that wasn’t fast or intuitive.

In fact, many digitally native brands that have opened permanent or pop-up stores don’t allow shoppers to walk out with physical goods. For example, custom men’s suit and shirt retailer Indochino, which started out online and in

January opened its 20th showroom, doesn’t allow shoppers to walk out with their garments. Customers at the showrooms select fabrics and customization options, and the apparel is then made to their measurements and shipped to them in about three weeks. Indochino has said in the past that the showrooms enable shoppers to select their favorite fabrics and get measured once so they can repeatedly return to the website to buy.

CATEGORY ANALYSIS • WEB MOSTLY: WHERE CLICK TRUMPS BRICK

75% Portion of Untuckit’ssales that come from its website

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Warby Parker probably doesn’t need to invest in special signage, counters and parking spots for online order pickups at its stores.

As our research found, there’s a big difference between reading about an omnichannel service on paper and using it in the physical retail world. The retailers that put in the ample time and resources required to get omnichannel right, depending on their unique business and customers, will win the long-term loyalty—and dollars—of shoppers who are increasingly crossing shopping channels.

As consumers continue to demand to shop on their terms, omnichannel isn’t going anywhere. But it takes more than offering an omnichannel service to do omnichannel right. Store associates must be hired and trained. Retail locations must be configured to account for ser-vicing web shoppers. Mobile initiatives must be communicated clearly and be intuitive for shoppers to use.

And different retailers benefit from different omnichannel features. A wayfinding feature in a mobile app is far more helpful at Lowe’s than it is at Gap, for example. And a small store such as

Kibo is a leading omnichannel commerce platform for retailers and branded manufacturers with over 800 customers fulfilling orders in 75 countries. Clients achieve optimal performance and loyalty through truly connected customer experiences across customer devices and retail touchpoints. Kibo’s unified approach includes a leading eCommerce platform, big data 1:1 personalization, mobile POS, and distributed order management delivered via a modern, cloud-based infrastructure. The Kibo platform can scale as clients grow their business while maintaining a low cost of ownership and faster time to market than other solutions. Kibo enables you to reach higher peaks of sales and customer loyalty. No matter the challenge, Kibo powers your success.



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INTERNET RETAILER RESEARCHFAREEHA ALIDirector of Research [email protected]

BILL BRIGGSSenior [email protected]

JAMES MELTONResearch [email protected]

JESSICA YOUNGResearch [email protected]

LAURA BERRIGANProject Manager, [email protected]

JONATHAN LOVEAssociate Data [email protected]

JAMES RISLEYResearch [email protected]

JOEL SMITHData [email protected]

ABOUT THE AUTHORKatie Evans is Chief Technology Editor at Internet Retailer, where she leads tech-related coverage, strategy, reporting and writing for Internet Retailer website and magazine as well as many research research reports, including the Leading Vendors to the Top 1000 and the Quintessential Guide to E-Commerce Platforms. She also aids in Internet Retailer magazine management, editing and production and serves as an editor for InternetRetailer.com. Katie is a frequent speaker and moderator at industry events including the Internet Retailer Conference and Exhibition, Shoptalk and Money 20/20. Katie holds a B.A. in journalism from Bradley University and has studied internationally at Stirling University in Scotland, U.K. She is a Fulbright journalism scholar, completing studies at University of Ljubljana and University of Maribor in Slovenia.

Katie EvansChief Technology [email protected](312) 572-6260



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ABOUT INTERNET RETAILER RESEARCHAt Internet Retailer Research our goal is to provide data and information about e-commerce that helps retail companies, investors and technology providers prosper.

The team tracks hundreds of metrics on roughly 6,000 online retail companies around the world, including such sought-after data points as web sales and traffic, conversion rates, average order value and key technology partners used to power their e-commerce businesses. We sell this data in its raw format in our multiple online databases, and we dig deeply into these numbers to help inform our 30+ exclusive analysis reports we publish each year on key e-commerce topics, including online marketplaces, cross-border e-commerce and omnichannel retailing. In-depth, data-focused reports are also available on key categories of online retail like apparel, housewares, food and luxury. We also have a robust custom research department, which provides tailored research products—in-depth reports, exclusive surveys, raw data pulls and other products—for top retail companies, consultants, financial analysts and technology companies.

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