January 13, 2009, 12:00 AM

More investment in the web is crucial to growth, NRF speaker says

Despite the down economy, it’s crucial to leverage web technology to improve the cross-channel customer shopping experience, Freeman Zausner, chief administrative officer of Urban Outfitters Inc., said today at the annual NRF convention and expo.


Despite the down economy, many retailers are continuing to invest in a “more customer-centered, knowledge-driven and integrated” technology environment, according to a RetailHorizons study released today at the annual National Retail Federation Convention Expo. “Although many retailers have a lean and mean posture in response to the threatening environment, their spirit is not one of retrenchment,” says the study, which was conducted by the NRF from Aug. 26 through Oct. 17, 2008, and sponsored by IBM Corp.

Results of the study were presented during a panel discussion featuring Freeman Zausner, chief administrative officer of multi-channel apparel retailer Urban Outfitters Inc., and Chip Molloy, senior vice president and chief financial officer of PetSmart Inc. The panel was moderated by Karen Lowe, IBM’s general manager, global retail industry.

The Internet and the use of web technology hold extensive promise for helping retailers improve how they serve customers across multiple shopping channels, Zausner told the panel’s standing-room-only audience. “The web is only 10 years old as a retailing channel,” he noted.

Despite the economic downturn, Urban Outfitters is not planning to cut back on technology investments that will improve how the retailer engages and serves customers through both offline and online channels, he said. “We’ll expand what customers can do on the web,” he said, adding, “All of us as merchants have to focus on the customer experience.”

Although he declined to reveal details of his company’s projects this year, Fausner said Urban Outfitters wants to improve how the retailer views what store customers do on the web and vice-versa.

In addition, Urban Outfitters is emphasizing the inclusion of blogs in its retail web environment to both support a community of brand loyalists and elicit feedback from customers on what they think of the Urban Outfitters shopping experience and on their interests in apparel trends.

A more effective technology environment that engages customers across multiple channels will help retailers weather a period when many merchants have experienced declining sales despite extensive promotions, the study indicates. In 2008, promotionally priced merchandise-which could include sale items or items that were part of a campaign to drive sales, such as buy one get one free-accounted for 32% of all merchandise on average for retailers in the study, up from 21% in 2007, the study says.

Although many retailers still need to define how they will support a customer-centric strategy across retailing channels, “transformation toward a more customer-centered, knowledge-based and integrated way of doing business will continue to dominate the IT agenda,” the study says.


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