In its second-largest acquisition, Amazon buys the company for $970 million.
E-commerce still has to fight for legitimacy within legacy store retail environments.
I ventured to Shop.org’s annual summit in Boston last week with a big question on my mind. With so much sales growth originating in online retail, how were bricks-and-mortar retailers viewing their online counterparts? As a vital growth source? As ‘just another store’? As something we do but we’d rather not focus on?
Shop.org’s attendees, which show organizers say topped 4,000 this year, tend to be e-retail executives that work at retailers with store roots, so I hoped to get an honest answer about whether multichannel retailers consider their e-commerce counterparts second-class citizens of the retail world or if e-commerce has proven itself enough to be an equal.
Scattershot opinions, I quickly learned, ruled the day. For every retailer that I spoke with that said there was absolutely no longer a caste system in place—which I had to take with a grain of salt because they could clearly see my press badge—there was another who felt online, while making strides, was still struggling for equality. No one would go so far as to say online was leading offline.
Self-preservation is an issue. Bill Bass, president of online for Charming Shoppes, for example, told a story in his presentation about how a Charming Shoppes e-retail exec, posing as a regular customer, visited one of the retailer’s Catherine’s stores and asked the clerks what they thought of the store’s web site. Their response? ‘Oh, it’s no good. Don’t shop there.’ Revealing her position, the exec asked why they did that. The clerks said they warn consumers away from the web site because stores don’t get credit for online sales and that impacts their bonuses. Since uncovering this, Charming Shoppes created a procedure where each online customer is assigned to a store nearby their shipping address and the store gets some credit for the purchase, regardless of whether the consumer’s ever set foot in the store the store. It’s an improvement, Bass said, though he guessed only half of the 27,000 store employees might be aware of and understand the new policy. “But at least half of them aren’t telling people not to shop online,” he said.
Mick McCormick from manufacturer and retailer Columbia Sportswear Co. emphasized how he had to find a way to set apart and protect the company’s expanded digital team so they could work toward the larger goal of using online to help rebrand and reenergize Columbia’s brands. He said that if he didn’t, other departments at the 70-year-old company would have eroded the digital team’s ideas to push their own agendas. “When you are a company that has a lot of ingrained customs, telling the corporate machine to leave this group alone is probably the hardest thing to do,” he said.
In the end, the answer I came away with was that e-retailers working to fit within a legacy store retail environment still have some fighting to do, even if they are finding e-commerce is providing the greater growth. Whether they succeed or not depends on whether the C-suite leads that fight or is begrudgingly pulled into it.