With shoppers expected to spend more than $650 billion online and in stores this holiday season, retailers need to be ready to handle the volume.
The problem is, $650 billion per month is not normal volume. Growth in online sales, for example outpaced that of bricks and mortar stores in Q4 a year ago but remained only 7.5% of the total. Retailers are trying different strategies to cope with the volume.
Aiming At Amazon
Some, especially larger, bricks and mortar chains are finding ways to compete with Amazon. Wal-Mart Inc. (NYSE:WMTC) grew its online sales despite the disadvantage of coming from behind. According to some experts, chains like Wal-Mart are starting to figure out that a combination of effective social, mobile and email advertising is key.
Hiring Workers Earlier
Others, like Kohl’s Corp. (NYSE:KSSA) are hiring workers earlier, raising wages and offering bonuses to keep fulfillment center workers on the job. As a result, Kohl’s set a single day record for online sales on Thanksgiving Day.
Kohl’s updated its shopping app, improved its in-store online ordering service and shipped orders from more stores – a technique many bricks and mortars retailers are utilizing. Another move – making Black Friday deals available online before stores even opened also generated a lot of sales.
Shipping From Stores
Target’s John Mulligan notes that using brick and mortar stores as fulfillment centers for online sales frees up online centers to focus on expanded sizes and colors that stores don’t normally carry.
The company hopes shipping from stores will help avoid backtracking on online promotions due to lack of supply. The idea of throttling demand to meet supply is not a healthy way to grow and Target knows it.
Techniques Paying Off
Adding 50% more inventory dedicated to Web sales alone around the Black Friday is only one of several reasons Wal-Mart saw increased sales. Using stores as fulfillment centers is also helping as are the other techniques mentioned.
Finally, brick and mortar retailers have one major advantage over Amazon – stores. By encouraging customers to order online and pickup in the store, large chains not only get the online sale, they also make it possible for customers to enter the store and buy even more.