September 30, 2011, 12:30 PM

Shrinking to survive

(Page 2 of 2)

Moosejaw Mountaineering, which operates seven stores in the Midwest and sells outdoor gear and apparel, this month will roll out a program that links the web deeply to in-store shopping. When a customer who belongs to the retailer's loyalty program, Moosejaw Rewards, comes to a store he can provide his e-mail address to an iPod Touch-toting clerk who can then pull up everything Moosejaw knows about the customer, including his online and offline purchase history. Thus, for example, if the customer wants to buy new North Face hiking boots like the pair he bought at Moosejaw three years ago, the clerk can see what he bought then and supply a recommendation for boots available today. When the shopper is ready to buy, the clerk can swipe his credit card through a credit card reader attached to the iPod Touch and the consumer skips the checkout line.

The aim is to keep customers and clerks engaged with one another in stores, says Eoin Comerford, senior vice president of marketing and technology at Moosejaw. "Our new mobile point-of-sale system will allow our associates to process a sale or a return without ever leaving the customer on the sales floor" he says.

It's also designed to make better use of floor space, including the space now devoted to checkout counters. "As we roll out new stores, we can do away with the behemoth cash wrap to create a more open, welcoming experience" he says. The retailer also is adding two-dimensional Quick Response, or QR, code tags to stores that smartphone users can scan to connect to Moosejaw.com for more product information.

PacSun, a retailer of apparel aimed at teens and young adults that operates more than 800 stores, this summer began introducing iPad tablet computers to the in-store sales mix. Clerks at 300 PacSun stores have access to an iPad that hosts an app designed to help them sell more effectively to its typically technologically astute customers.

"This has created a whole new way for our store associates to relate to our customers" says Tim Katz, senior operations manager at Pacific Sunwear of California Inc. Clerks use the app to help customers create outfits they can then buy in the store. PacSun expects to roll out iPads to all stores next year, he adds. The company closed 44 stores in fiscal 2010 and says it expects to close between 30 and 50 more in fiscal 2011. It has no plans to open new stores.

Charming Shoppes, which operates apparel stores primarily aimed at plus-size women, including Fashion Bug and Catherine's, is testing a similar outfitting tool in 12 stores, Bass says.

Web orders from stores

The Finish Line Inc., which operates 660 athletic shoe stores across the country, lets clerks order at the cash register merchandise or sizes not available in the store. 80% of such orders are fulfilled by the nearest Finish Line retail store, which shortens the delivery time to the customer and cuts the shipping expense to the retailer. The average delivery time for a product ordered online from a store location is a day and a half, says David Seifert, Finish Line's vice president of e-commerce. Toy retailer Toys ÔR' Us Inc. announced last month it will tap its retail store inventories to fill online orders, which clerks also can place from stores.

Sears and Kohl's department stores feature kiosks that let consumers order items or sizes they can't find in store at their respective e-retail sites. Every Sears store has multiple ordering kiosks, says Michael Murray, chief marketing officer of online at Sears Holdings Corp., and consumers can choose whether they want the item shipped to their homes or to a Sears store. "The ordering kiosks mean a customer never has to walk out of a store to find a product because nothing is truly ever out of stock" he says. Sears Holdings closed 15 Sears stores in the United States during fiscal 2010. Other than specialty stores, it opened no new full-line Sears stores.

Code connection

A Sears mobile app also includes a tool that lets in-store customers scan a QR code to obtain product information from Sears.com. Finish Line stores also post QR tags on the shelves that consumers can scan with mobile phones. Each tag links the smartphone-toting customer to the product's detail page on FinishLine.com, where she can find more information about the product and read customer reviews, Seifert says. Finish Line says it plans to open five to 10 new stores in fiscal 2012, while closing 10 to 15.

Lowe's Companies Inc. is deploying an army of 42,000 iPhones—about 25 per retail store—that clerks by the end of the year will use to assist customers at its home improvement stores. Consumers with their own smartphones, or a clerk with a store phone, can scan tags and connect to more information, such as an installation video, on Lowe's mobile commerce site.

Magic Beans, a Boston area toy retailer, last year began offering a mobile app that let its store customers scan a code to get more product information, but went one step further. Time-strapped consumers can pay for purchases without ever having to interact with store clerks. Co-founder Sheri Gurock says 42% of smartphone owning shoppers over last Thanksgiving weekend used the app to skip waiting in the checkout line.

Gurock, like Moosejaw's Comerford, envisions a future where stores don't even have cash register stations. As consumers continue to move more of their spending online, it's the retailer that integrates online in its stores and serves customers' needs that will survive, consultants say. Kornberg says the changes will further differentiate between the really good retailers and those that aren't.

allison@verticalwebmedia.com

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