Multichannel Shoppers Spend More, Saks Finds

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NEW YORK -- Saks Fifth Avenue has noticed that its multichannel shoppers spend five times more than single-channel consumers.


The fashion retailer also found that an estimated 40 percent of Saks.com customers were not in the Saks retail stores' database and that more than 70 percent of visitors to Saks.com also shop at Saks' brick-and-mortar stores, sometimes carrying printouts from the Web site.


"Saks.com is one of the top 10 stores that Saks has [out of 60 nationwide]," Denise Incandela, senior vice president of business development and Saks Direct, told attendees Jan. 17 at the National Retail Federation's 94th Annual Convention & Expo here.


Incandela added that Saks.com reported a compounded annual growth rate of 50 percent during the past four years without significant marketing.


She was part of a panel that included e-commerce executives from Best Buy and Liz Claiborne. Forrester Research senior analyst Carrie Johnson moderated the panel.


The lessons from a decade of multichannel and e-commerce transactions have been slightly different for Best Buy. The consumer electronics retailer is undergoing a transformation process. It wants to become a sharply defined multichannel, customer-centric company.


"One of the biggest things we've found is that about half of our customers that come into our stores have done research online," said Sam Taylor, senior vice president of online stores and marketing at Best Buy.


The retailer benefits from a growing trend: One out of 10 consumer electronics items are bought online, and that percentage will increase. Also, nearly half of all computer hardware sales are conducted online.


Best Buy has more than 820 stores in the United States and Canada, supported by BestBuy.com, futureshop.ca and the telephone channel. An in-home service called Geek Squad was launched last year.


The experience couldn't be more different for Dave Towers, a former J. Crew e-commerce executive. As the new vice president of e-commerce operations at Liz Claiborne, he must avoid channel conflict with retailers as the apparel manufacturer sells direct to consumer.


Liz Claiborne sells directly via lizclaiborne.com, Elizabeth.com and luckybrandjeans.com.


For Towers, the issue is "how do we take our brands, bring them online, support e-commerce and also wholesale?"


Depending on the type of retailer or brand, many initiatives helped spur online sales over the years.


For Saks.com, e-mails have worked well over the years without a drop in click-through and conversion rates. Full-price and sales e-mails for popular brands like Prada, Gucci and Liz Claiborne's Juicy Couture are common. Other e-mails tout features such as 10 must-haves.


"Any kind of editorial works because our customers like it," Incandela said.


Saks.com segments its e-mails by types -- petite customers, Salon Z buyers, loyalty program members, etc.


"For some, e-mail segmentation is a big opportunity," Incandela said. "For us, you'll see a 30 percent to 40 percent lift from it, just like that."


Equally well performing for Saks.com are online trunk shows, an adaptation from the brick-and-mortar world. Saks.com visitors get to reserve items two months before the merchandise hits stores. A recent online trunk show for the Diane von Furstenberg label lived up to expectations.


Best Buy uses all of its marketing resources to promote e-commerce. The company finds that consumers buy online because of convenience and an assortment vastly larger than brick-and-mortar stores.


Current and prospective customers are directed to BestBuy.com through in-store signage, Sunday newspaper inserts and circulars. A television spot over the holidays directed shoppers to the site.


E-mails have been segmented the way Best Buy is gradually segmenting its retail stores to suit the neighborhood and clientele. Improving the shopping experience online also lifts sales.


"We saw an over 4 percent decrease in shopping cart abandonment just by redesigning our [online] checkout," Taylor said.


Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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