Retailers that can actually improve on the consumer shopping journey will be increasingly able to grab market share from competitors.
At Cowen & Company’s 5th Annual “The Future of the Consumer Conference,” held Tuesday in Manhattan at the Lotte New York Palace Hotel, Nordstrom and Walmart offered just two examples of how companies are rethinking they way consumers shop and their role in shifting that to keep up with the times.
Speaking about a focus on local markets, particularly in connection with the fall opening of its Manhattan women’s flagship—which sits across the street from the men’s flagship—Erik Nordstrom, co-president of Nordstrom and its principal executive officer, shared some insights the company has gleaned since opening its men’s store in the city a year ago.
“New York is the largest online market” for the retailer, Nordstrom said, adding that the company is focusing on “local markets to better take advantage of the opportunities that local markets have.”
And that translates to a focus on services. More specifically, whatever service is more likely to engage the customer, Nordstrom said. Like alterations. Though in Nordstrom’s words it’s “old school craft,” the spend is “three times” more for those who use the service.
For Nordstrom’s local market strategy, the key has been getting the merchandise closer to where the consumers are, whether delivering within two days or same-day service. One feature set to roll out soon in one of its Los Angeles stores, will allow a customer to order an item or request a size that’s not immediately in the store, be given a “restaurant pager,” and, as they walk around the store over the next hour, “we will page you” when the item gets delivered to the store, Nordstrom said, emphasizing that stores are an asset. “It is an asset to have merchandise that close to customers. We just have to light it up,” he said.
But don’t expect the company to suddenly hold regular sales, like friends and family promotions, to drive traffic to stores. According to the co-president, that’s not happening. Nordstrom believes in brands, lots of them, and that’s a learning from the men’s store that will inform the women’s flagship, too.
And in keeping with its local market strategy, the retailer is looking at partnerships, such as with localized delivery services. Nordstrom explained that there likely will be a large number of shoppers who “buy and leave without packages,” with many purchases instead being sent to doormen in buildings where they reside.
What Walmart’s doing
For Walmart, Janey Whiteside, chief customer officer, said she’s focused on “one customer.”
By that she’s referring to one customer who shops across channels—the same one whether online or in the store. Of course, the chief customer officer has instituted some changes that help that customer on his or her shopping journey. “The Walmart store is so large, so we instituted store maps,” she said. And this comes in addition to the retailer’s other efforts to ease shopping, like ordering online and having the option of either pick-up or delivery.
While having the right brands in the stores is important, so too is having partnerships where customers have an even greater choice online, whether for apparel, home or baby.
“Getting product to consumers quickly and at a low price-that sets us apart,” she said. But the chief customer officer also explained that the devil might be in the details. If a customer chooses a product that’s not in stock, Walmart has to be able to respond more quickly on substitution options. “The whole point is to get you in and out.”
Walmart also knows a lot about its different customers, Whiteside said. The Jet.com customer tends to be more urban in location than the Walmart customer, and has a slightly smaller family with slightly higher income. From a merchandising standpoint, that means “some brands like Nike are on Jet, not Walmart,” she said.
In focusing on the customer, Whiteside said it involves a thought process that considers “where have we not created or solved the pain points of the customer.” And while the customer is put first, thinking through potential solutions also means “thinking about what are the unintended consequences” before putting a potential solution in place.
Looking to the future, Whiteside said Walmart is looking at where it can fill in some gaps, such as “which [brands] are right for us to acquire and incubate.” The discounter is also interested in what Whiteside called “anticipatory services,” noting that automatic replenishment is one idea.
“There’s a broad basket of ideas,” she said.
