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These Retailers Have the ‘Most Connected’ Experiences

Just as the holiday season concludes and Nordstrom reveals its digital gains through the period, the department store now has a new honor it can take into 2021: most connected retail experience.

In the recently released Connected Retail Report from digital transformation solution provider CI&T, Nordstrom scored 100 percent across four categories: search, buy, fulfillment and returns—amounting to a 96 percent total rating. This just eked past the 95 percent score from Target, which was one of retailer’s biggest winners in 2020.

Insights from the survey informed an extensive assessment of 10 retailers across seven criteria for a total score of 74 data points: overall experience, search, shop, cart, buy, fulfillment and returns.

Nordstrom’s crown as the top connected retailer is fitting when taking into account its recent digital growth. The department store revealed that digital sales over the holiday season grew 23 percent over the previous year’s totals, while digital sales now represent 54 percent of all sales—20 percentage points above the 34 percent of sales that e-commerce represented in 2019 year.

And in line with its perfect fulfillment score, more than 30 percent of online orders were fulfilled from Nordstrom and Nordstrom Rack stores.

Approximately 11 percent of orders were picked up in store, which accelerated to more than 20 percent during the week preceding Christmas. On a similar note, 9 percent of orders were picked up in-store throughout the season.

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“We’re encouraged by the increasing momentum throughout and following the holiday season as we continue to unlock new ways to better serve customers on their terms with greater convenience and connection. By leveraging order pickup and store fulfillment capabilities across our two brands of Nordstrom and Nordstrom Rack, we’re seeing benefits to our customers as well as to our business,” Erik Nordstrom, CEO of Nordstrom, said in a statement. “We’re deeply appreciative of our team’s focus on providing customers with a strong holiday offering during these challenging times.” The department store operator said it continues to expect it will report a profit for the fourth quarter. But it said it still faces pressures due to steep shipping surcharges at its growing e-commerce business.

The Connected Retail Report pointed out that there was still plenty of improvement for Nordstrom despite its leading score.

“Considering how brand loyal and engaged Nordstrom customers tend to be, live chat would be a beneficial addition to the app, and we of course would love to see the desktop and mobile sites score higher on accessibility,” the report indicated. “Finally, our team experienced a bit of frustration upon arriving at the checkout process only to find that certain items were sold out. Inventory unavailability should be communicated earlier on in the purchase process.”

Despite having a slightly lower overall score powered by four 100 percent marks in search, cart, buy and returns, Target saw even more robust holiday fulfillment numbers than Nordstrom during the holiday, as approximately 95 percent of all sales were fulfilled by stores.

Same-day orders fulfilled by customers retrieving their purchase either in stores or in their vehicles, or at home via a Shipt delivery driver, climbed 193 percent during November and December. Of the three same-day options available, drive-up grew 500 percent, the fastest of the group, while Shipt-fulfilled sales expanded by 300 percent.

Target was ultimately docked from the top spot due to its lower rankings in overall website experience (86 percent) and shop (84 percent), with CI&T noting that the FAQ page could be improved in terms of helpfulness, and the need for live chat on the app. The company also pointed out it was “a bit challenging” to configure items on the product page.

“By focusing on consistency, decluttering, and cleaning up the varied platforms, Target could easily end up first in the rankings next year,” the report stated.

Although Nordstrom had the top connected retail store, overall results from Nordstrom and Target couldn’t look more different when taking into account the overall success of mass merchants versus department stores.

Nordstrom’s nine-week holiday period experienced a total net sales decline of approximately 22 percent, which was in line with company expectations for a decrease in the low-twenties percentage. This is a far cry from the totals Target revealed, which saw comparable sales grew 17.2 percent, reflecting comparable store sales growth of 4.2 percent and comparable digital sales growth of 102 percent.

However, Nordstrom does continue to expect it will report positive EBITDA for the fourth quarter. But it said it still faces pressures from growing e-commerce costs.

The Home Depot, Staples and Walmart fill out top five

Within the CI&T report, The Home Depot came in third with a 91 percent total for its connected retail experience, with 100 percent rankings in the search and shop.

Staples and Walmart filled out the top five at 90 percent a piece, with Walmart getting 100 percent in search, cart and buy and getting the best overall website experience (96 percent) of the brands included.

“Walmart knocked the overall experience out of the park, missing only a couple points for a slight inability to find help/support content,” the report said. “In-store and curbside pick-up were quite delayed and disorganized, but the ‘tower’ pick-up experience is extremely innovative and efficient. The returns part of the process exposed multiple opportunities for improvement, with challenges both upon shipping items back and while attempting to bring items back to the store.”

Filling out the top 10 are Foot Locker, Gap, PetSmart, Bass Pro Shops and REI.

To compile the report, CI&T surveyed 530 U.S. shoppers focusing on their purchasing habits and retailer expectations over the past year and combined the data with insight from a team of five UX designers to assess the 10 merchants’ connected retail capabilities.