BUSINESS DAY

FROM:
HTTP://WWW.NYTIMES.COM/2012/07/05/BUSINESS/RETAILERS
-LURE-ONLINE-SHOPPERS-OFFLINE.HTML?_R=0

Luring Online Shoppers Offline

By STEPHANIE CLIFFORDJULY 4, 2012
Continue reading the main storyShare This Page
Laura Gioe, center, who didnt want to pay for shipping, visited a Walmart store to retrieve
pillows that she had ordered online. CreditChang W. Lee/The New York Times
As online shopping has surged, traditional retailers have lost millions in
sales to so-called showrooming when shoppers check out products in
stores that they then buy from Web sites like Amazon. It has gotten so
bad that Best Buy even replaces standard bar codes with special Best
Buy-only codes on big ticket items so they cannot be scanned and
compared online.
Now some big retailers are taking a new approach to the dreaded
showrooming by transforming their stores into extensions of their own
online operations. Walmart, Macys, Best Buy, Sears, the Container Store
and other retailers are stepping up efforts to add Web return centers,
pickup locations, free shipping outlets, payment booths and even drivethrough customer service centers for online sales to their brick-andmortar buildings.
We are living in the age of the customer, and you can either fight these
trends that are happening showrooming is one or you can embrace
them, said Joel Anderson, the chief executive of Walmart.com for the
United States. We have a lot of assets, but theyre only assets if you
embrace the trends of the customers.
In making the changes, the big retailers are betting the future on
shoppers like Sue Sheffer.
Ms. Sheffer, an information technology specialist in Bunker Hill, W.Va.,
shops for items like clothes, electronics and even coffee online. But she
also likes to receive her purchases as soon as possible. When buying
shelving from the Container Store, she ordered it on the Web in the
morning and picked it up during her 30-minute lunch break that day.
And there were no expensive shipping fees.

Fiona Dias, the chief strategy officer at ShopRunner, which coordinates

shipping for retailers, called the trend really an offensive strategy
against Amazon and pure-play online retailers.
Unfortunately, stores have been portrayed as the ugly stepsister here,
she said. They do have disadvantages, but the advantages of having a
physical footprint are many.
One advantage is the ability to reach customers who pay with cash.
In April, Walmart began allowing shoppers to order merchandise online
and pay for it with cash at a store when they picked it up.
Continue reading the main story

RELATED COVERAGE

TIMES
TOPIC
Shopping
and

the Retail Industry

Even without the cash option, in the six years since Walmart has allowed
online items to be picked up in stores, customer demand has been high.
More than half of the sales from Walmart.com are now picked up at
Walmart stores, Mr. Anderson said.
With the cash option, Walmart was trying to appeal to customers who
did not have bank accounts or credit cards. Walmart says the majority of
in-store purchases are made with cash or debit cards, and that about 15
percent are made with credit cards.
In the first weeks of the cash option, Walmart noticed that a different set
of customers also found the service appealing. About 40 percent of the
customers who paid with cash when ordering online ended up using
noncash options, like a credit card or check, when they arrived at the
store. They simply had not wanted to provide that financial information
online. Theres still a large segment of people out there afraid of identity
theft or just plain putting their credit card online, Mr. Anderson said.
The service already accounts for 2 percent of Walmart.coms sales.

Marie Seremetis, a Web customer, picked up her order at the Container Store in New York
City.CreditChester Higgins Jr./The New York Times
Another advantage traditional retailers hold over their online-only
counterparts is same-day delivery and returns. Sears, which has long
offered store pickup for items bought on the Web, added a drive-through

service a few months ago that allows customers to return or exchange

purchases without leaving their cars.
Customers meet a clerk waiting outside the Sears, provide a mobile
phone receipt or printout, and the merchandise is swapped. People
have a certain need for immediacy they want something that same
day, said Tom Aiello, a company spokesman. They want to have their
hands on it; they dont want to wait.
The Container Store has also been pushing a drive-through service, a
reflection of its altered approach to online shopping. Initially, executives
viewed the pick-up-in-store feature as a way to draw consumers into
stores and encourage customers to buy more. Now, they would rather
close the deal on an online order as soon as possible so shoppers do not
go elsewhere or forgo the merchandise altogether.
Especially for that mom thats got kids in the car and is trying to run
five errands today, this allows her to put us on her list with no additional
pressure, said John Thrailkill, a vice president of stores for the
Container Store.
He said that the online orders for in-store pickup also tended to be much
larger than typical in-store purchases, and that customers who picked up
orders in the store visited about 50 percent more often than customers
who shopped only in the stores.
Many major stores, including Apple, Nordstrom and Best Buy, let people
place orders online and pick up items within a day at a selected location,
forgoing shipping charges. The retailers say this option is especially
popular with bulky items that do not qualify for free shipping, and for
people in a rush. Other places, like Cabelas and J. C. Penney, offer instore pickup for online orders, though with a delay of several days.
Macys and Nordstrom are going even further by integrating the physical
and online merchandise selections.
Nordstrom last year added a feature allowing customers to search an
individual stores inventory via the Web. That follows the companys
decision three years ago to combine its online and offline inventories, so
that if nordstrom.com was sold out of a size 8 Nicole Miller shift but a
store in Los Angeles had the item in stock, the store would ship the item
to the e-commerce customer. Macys recently integrated inventory, too.
It has 202 branches that can send items to online customers, and will
expand that to 292 by the end of the year.
Of course, online-only retailers are also shifting strategies. E-commerce
companies that are part of the ShopRunner service, like Blue Nile and
eBags, are now shipping to physical locations that are also part of the

ShopRunner network, like Toys R Us, so that their customers can pick
up items in stores, too.
Amazon continues to promote its Prime two-day shipping program so
that its shoppers can get speedy deliveries. Alison Jatlow Levy, a retail
consultant at Kurt Salmon, said she expected physical stores to go
further toward the showroom model carrying lots of products for
shoppers to see and test, but asking customers to buy the merchandise
via the stores Web sites or apps.
She also said there was a straightforward way for e-commerce retailers
to respond to the latest moves. You will definitely start to see onlineonly players open stores, she said.
A version of this article appears in print on July 5, 2012, on page B1 of the New
York edition with the headline: Luring Online Shoppers Offline. Order
Reprints| Today's Paper|Subscribe
Continue reading the main story

RECENT COMMENTS
SKC
July 6, 2012
Isn't it true that the shipping charge must be counter-balanced against the sales tax
for these "integrated online and physical stores"? So...

sw
July 5, 2012
The best thing happening to me to encourage me to shop offline are Amazon's new
shipping policies. They have gone from using UPS, which...

Mouse Woman
July 5, 2012
My vote for most frustrating online retailer is JC Penney. Every time I order from
them (which I don't anymore) I get something completely...

Tcnel Heriberto Manuel Jimnez Gutirrez

10.353.558
0412-2968011