"Omnichannel" is not just a buzzword anymore, but a necessity if retailers intend to survive, and is the reason that Macy's (M +2.41%) is joining the conga line of companies rolling out new ship-to-store delivery policies.
In its third-quarter earnings conference call the other day, the retailer revealed it had been testing a new service through which online orders can be delivered to a store for pickup, building upon its existing one through which some 500 of its 840 stores will ship an online order to a customer's house. It will roll out nationally next year.
Wal-Mart was one of the early adopters of the practice, but it's quickly being seen all across the industry as de rigueur, particularly as retailers fret about a weak Christmas shopping season. Target recently went into hurry-up mode to ensure its new ship-to-store service was ready for launch by Thanksgiving, joining Nordstrom, J.C. Penney, and others that already have such policies in place.
Analysts are forecasting same-store sales will come in under 2% in the fourth quarter, and with six fewer days available between the traditional Black Friday start to the shopping season and Christmas Day, retailers need to ensure they have in place the means necessary to meet customer expectations on product availability and delivery, whether the item is purchased in store, online, or through catalogs.
While ship-to-store initially seems an inconvenience, it also means a customer doesn't have to be home to receive a package, and it has the added benefit of bringing a customer back into the store where additional purchases might be made.
The "omnichannel" concept, which is an outgrowth of the multichannel experience of ensuring one has a full complement of shopping opportunities, including brick-and-mortar store, catalog, and website, seeks out a seamless experience between them regardless of how the customer accesses it, whether in person, or via the computer or mobile device. Getting the purchase to the customer in the most convenient manner possible is the next natural extension.
While you'd naturally expect to find traditional retailers offering the service, it's also spreading to the online world. Both eBay and Google have launched same-day delivery services, albeit on a smaller, more regional scale, and Amazon.com has installed lockers in retail stores to make picking up a package as convenient as possible.
Yet, it's become such an imperative to closing the sale that even shopping-mall operator General Growth Properties partnered with crowdsource driver service Deliv to introduce same-day delivery services at four of its properties, ensuring the mall becomes the omnichannel retailer's point of distribution.
Still, like the price-matching craze adopted before it, once everyone does it, the practice is no longer novel, and the competitive advantage evaporates. But a retailer can still find itself at a disadvantage if it doesn't have such policies in place, and so we get these regular announcements of yet another retailer doing the dance.
Because Macy's third-quarter results came in ahead of expectations on the top and bottom lines, and it anticipates a strong showing for the fourth quarter, as well, with same-store sales expected to be up between 2% and 4% over the year ago period, the company didn't feel the need to hurry up and deploy its new ship-to-store policy before the Christmas season gets under way. Having tested the service during the past few months, it will roll it out nationally by next year.
Operating from a position of strength does that for you; but not even Macy's can avoid implementing a service that the omnichannel consumer now deems essential.
