PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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Other big retail chains have taken similar steps. Home Depot, for example, moved in recent years to address the compensation issue by assigning credit for web sales to the store nearest the online customer.
Macy's, recognizing that 90% of its customers research online at least sometimes before shopping in stores, in recent years upgraded 50,000 checkout registers and connected them to the Internet, enabling a program it calls "search and send" that lets employees check for inventory throughout the company and place orders for customers for delivery to their homes. Macy's, which already operates eight distribution centers, is opening a new 2-million-square-foot facility in Martinsburg, W. Va., to fulfill online orders in the eastern United States. The chain also added Wi-Fi to all its stores so employees and customers can connect to the web via smartphones, kiosks and other mobile devices.
Nordstrom also introduced free Wi-Fi in all its stores, and provides employees a range of mobile devices that connect to the web. Its mobile app lets consumers scan the tags of store items to see the item in other sizes and colors, and pull up online reviews. A customer can customize the app to reflect her style, for example, classic versus modern or trendy.
Employees in all 117 full-line Nordstrom stores carry a total of 1,300 iPads so they can show browsing customers vivid images of items available online and in the catalog. The company also deploys some 6,000 additional mobile point-of-sale devices. These are iPod Touches modified so that an employee can swipe a customer's payment card anywhere in the store and e-mail a receipt. Associates can also place online orders with the devices and scan product bar codes to update inventory records. Nordstrom is steadily adding functionality to the devices in quarterly releases, such as integrating the rewards program so associates can look up gift card balances.
"That is going to be the foundation for lots of things we're going to do in the coming years," Nordstrom says. "By year-end, our mobile POS devices will be able to do everything our cash registers can do, and by this time next year they'll be able to do a lot more." For example, customers soon will be able to open a new credit card account on the mobile devices or make a payment on an account. Nordstrom compares the experience to shopping in one of Apple Inc.'s high-tech stores, where employees roam freely, checking out customers via mobile devices and e-mailing them receipts.
Nordstrom is hardly done experimenting. It's trying out same-day delivery in some stores, and last year rolled out from its HauteLook subsidiary a new membership-based online store called Sole Society.
The investments in integrating inventory and fulfillment, combined with changes in organizational policy make it all possible, Nordstrom says. Other retail chains, too, may well find that increasing the technology budget is just the start of competing in this era of the mobile web: Vision and structural change may well count for as much as spending on apps, warehouses and development centers.