Via https://newsapi.org online business online marketing online business opportunities Wharton, MIT Professors See Upside At Nordstrom, Kohl’s, And Target

Via https://newsapi.org  online business  online marketing  online business opportunities Wharton, MIT Professors See Upside At Nordstrom, Kohl’s, And Target
Traffic Exchange

Via https://newsapi.org online business online marketing online business opportunities

via https://newsapi.org  online business  online marketing  online business opportunities fashion-us-Louboutin

Ecommerce has been around for decades, so why have some of the biggest bricks and mortar retailers been so slow to catch up? Which incumbents have counter-attacked well against the Amazons of the world? Which have so far gone unscathed?

While no bricks and mortar retailers took the threat of e-commerce seriously when Amazon got started, Nordstrom, Kohl’s and Target are among the most effective incumbent counter-attackers and Harrods, Costco, TJX, and Ross Stores have been somewhat immune to the ravages of ecommerce, according to a pair of professors I interviewed last week.

(I have no financial interest in the securities mentioned).

Ecommerce has grown quite a bit since 1994 when Jeff Bezos quit his executive position at a New York hedge fund to drive to Seattle to start Amazon.


Clickbank Marketing Tools

Bezos saw that the Internet was growing at a2,300% annual rateand realized it would eventually become a very big opportunity – starting with his focus on offering books online. In 2018, U.S. ecommerce was a$517 billion industry growing a 15% annually(still a mere 14.3% of the $3.6 trillion retailing business) of which Amazon controls a whopping 40%.

Bricks and Mortar Winners and Losers

What makes the difference between the bricks and mortar winners and losers? It’s a simple concept that’s hard to accomplish: give consumers a better buying experience. As Academic Director of Wharton’s Baker Retailing Center, Thomas S. Robertson, explained September 17, the winners excel in four areas:

  • Omnichannel.Since the customer uses both online and offline channels, successful retailers must integrate both seamlessly rather than thinking of them as competitive.
  • Customer Experience.Sephora is among the successful retailers that provide a “positive customer experience” through both technology and sales associate training.
  • Positioning.Winning brick and mortar retailers make clear choices about where they compete regarding “Who is their target market? Are they luxury or mass market? Are they competing on price or service?”
  • Innovation.Ultimately companies that invest in store redesign and new ideas win out because “customers want novelty and new ideas” as “tired old stores are passing out of existence.”

While all this sounds obvious, inertia followed by the wrong response has damaged many incumbents.

As MIT Sloan School Senior Lecturer, Sharmila Chatterjee, explained in a September 14 interview, “Bricks and mortar retailers thought e-commerce would be a component and adoption would be slower. They saw an adversarial relationship and rather than realizing that a physical presence gave them a potential competitive advantage because going to stores was a social event for consumers. [Instead of building on this strength,] incumbents, such as Sears, responded with price discounts. [That was a bad strategy because] it constrained resources – limiting product selection, eliminating service, and producing long lines for returns which degraded the customer experience.”

Should You Invest in the Omnichannel Winners?

The winners among the incumbent retailers have internalized these lessons. If you are seeking investment opportunities, consider the ones that follow Robertson’s prescription of “superior omnichannel integration of online and bricks and mortar; creating a valuable in-store experience that is valued such that consumers wish to return; educating sales associates who can take the customer’s viewpoint (far better than a chat bot); and constantly innovating in acceptance of new technologies.”

Here are some that Robertson admires. As he said, “Sephora delivers a positive customer experience and does an excellent job of integrating digital and store with their app. Kohl’s and Nordstrom have come under attack and are doing reasonably well. Both have been willing to take returns from others (Kohl’s and Amazon) in order to increase store traffic. Kohl’s has also shrunk a few of their stores by carving off space to lease to the German supermarket chain, Aldi. This reduces cost but also brings new customers to Kohl’s.”

He seems to admire what Nordstrom is doing and has noticed Walmart’s efforts. “Nordstrom is innovative. It has created a portfolio of full-line department stores, Nordstrom Rack, Trunk Club and a new concept, Nordstrom Local, that is essentially a ‘service’ location. Not all of this will work but the fight is admirable. Finally, I can’t ignore Walmart, which is doing very well in bricks and mortar and trying hard in online [though it’s losing $1 billion in ecommerce] particularly with the purchase of Jet. They are having success with food ordering online and pickup at store,” he explained.

Chatterjee is optimistic about Nordstrom and Target and concerned about Macy’s. As she explained, “In Los Angeles, Nordstrom has two big stores with a small store between them. The concept is that you order online and pick up at the small store then consumers go to the large stores to browse. They are trying to tackle a big problem for the industry – the high cost of returning goods purchased online. Target is making some new changes which I have noticed. But Macy’s has about 300 showcase stores that it’s renovating and plans to use its other stores for self-service. I think consumers won’t go to the self-service stores because of the poor customer experience which will initiate a doom loop.”

Are Ecommerce-Immune Incumbents a Better Bet?

Some bricks and mortar stores are relatively immune from ecommerce. As Robertson pointed out, “The best defense is always a good offense and it is incumbent on bricks and mortar retailers to build strategic walls before they are losing customers. Some have; some have not. I would start with Harrods. They have done an admirable job of investing to beautify the store, training a knowledgeable set of associates, and partnering with major brands to essentially ‘lease’ space at Harrods. Costco has been reasonably immune to attack. TJX and Ross – the ‘treasure hunt’ stores – seem to have found protective cover.”

Target Tops The List Based on the Numbers

Based on a quick analysis of some key numbers, Target and Walmart top the list. Here’s more:

Target.Revenues rose 3.6% in the second quarter and at $18.42 billion beat expectations by $90 million while adjusted earnings of $1.82 were 24 cents more than expected, according toCNBC. Its stock is up 66% in 2019 – and at a P/E of 17.7 – trades about 4% below its all-time high

Walmart.Revenues rose 2.8% in the second quarter and at $130.38 billion beat expectations by $270 million while adjusted earnings of $1.27 were five cents more than expected, according toCNBC. Its stock is up 25% in 2019 – and at a P/E of about 27 – trades about $1 below its all-time high

Kohl’s.Revenues fell 2.9% in the second quarter of 2019 and at $4.17 billion missed expectations by $30 million while adjusted earnings of $1.55 were two cents more than expected, according toCNBC. Its stock is down 26% in 2019 – and at a P/E of about 11 – trades 40% below its all-time high.

Nordstrom.Revenues fell $60 million below estimates to $3.87 billion in the second quarter of 2019 while adjusted earnings of 90 cents beat by 15 cents. Nordstrom guided revenues down 2%, according toCNBC. Its stock – which trades at a P/E of 10.6 – is down 32% this year and 59% below its all time high.

Robertson and Chatterjee were not picking stocks – but I would guess that they view Nordstrom and Kohl’s as making investments in boosting customer experience that will pay off over the long run. For now, it looks to me as though Target and Walmart are now enjoying the payoff from their investments in omnichannel retailing.

“>

via https://newsapi.org  online business  online marketing  online business opportunities fashion-us-Louboutin

Eric Nordstrom, Nordstrom Co-president and Jamie Nordstrom, President of Stores for Nordstrom attend… [+]the 2019 Couture Council Award Luncheon honoring French iconic footwear designer Christian Louboutin at the David H. Koch Theater on September 04, 2019 in New York City. (Photo by Angela Weiss / AFP) (Photo credit should read ANGELA WEISS/AFP/Getty Images)

AFP/Getty Images

Ecommerce has been around for decades, so why have some of the biggest bricks and mortar retailers been so slow to catch up? Which incumbents have counter-attacked well against the Amazons of the world? Which have so far gone unscathed?

While no bricks and mortar retailers took the threat of e-commerce seriously when Amazon got started, Nordstrom, Kohl’s and Target are among the most effective incumbent counter-attackers and Harrods, Costco, TJX, and Ross Stores have been somewhat immune to the ravages of ecommerce, according to a pair of professors I interviewed last week.

(I have no financial interest in the securities mentioned).

Ecommerce has grown quite a bit since 1994 when Jeff Bezos quit his executive position at a New York hedge fund to drive to Seattle to start Amazon.

Bezos saw that the Internet was growing at a2,300% annual rateand realized it would eventually become a very big opportunity – starting with his focus on offering books online. In 2018, U.S. ecommerce was a$517 billion industry growing a 15% annually(still a mere 14.3% of the $3.6 trillion retailing business) of which Amazon controls a whopping 40%.

Bricks and Mortar Winners and Losers

What makes the difference between the bricks and mortar winners and losers? It’s a simple concept that’s hard to accomplish: give consumers a better buying experience. As Academic Director of Wharton’s Baker Retailing Center, Thomas S. Robertson, explained September 17, the winners excel in four areas:

  • Omnichannel.Since the customer uses both online and offline channels, successful retailers must integrate both seamlessly rather than thinking of them as competitive.
  • Customer Experience.Sephora is among the successful retailers that provide a “positive customer experience” through both technology and sales associate training.
  • Positioning.Winning brick and mortar retailers make clear choices about where they compete regarding “Who is their target market? Are they luxury or mass market? Are they competing on price or service?”
  • Innovation.Ultimately companies that invest in store redesign and new ideas win out because “customers want novelty and new ideas” as “tired old stores are passing out of existence.”

While all this sounds obvious, inertia followed by the wrong response has damaged many incumbents.

As MIT Sloan School Senior Lecturer, Sharmila Chatterjee, explained in a September 14 interview, “Bricks and mortar retailers thought e-commerce would be a component and adoption would be slower. They saw an adversarial relationship and rather than realizing that a physical presence gave them a potential competitive advantage because going to stores was a social event for consumers. [Instead of building on this strength,] incumbents, such as Sears, responded with price discounts. [That was a bad strategy because] it constrained resources – limiting product selection, eliminating service, and producing long lines for returns which degraded the customer experience.”

Should You Invest in the Omnichannel Winners?

The winners among the incumbent retailers have internalized these lessons. If you are seeking investment opportunities, consider the ones that follow Robertson’s prescription of “superior omnichannel integration of online and bricks and mortar; creating a valuable in-store experience that is valued such that consumers wish to return; educating sales associates who can take the customer’s viewpoint (far better than a chat bot); and constantly innovating in acceptance of new technologies.”

Here are some that Robertson admires. As he said, “Sephora delivers a positive customer experience and does an excellent job of integrating digital and store with their app. Kohl’s and Nordstrom have come under attack and are doing reasonably well. Both have been willing to take returns from others (Kohl’s and Amazon) in order to increase store traffic. Kohl’s has also shrunk a few of their stores by carving off space to lease to the German supermarket chain, Aldi. This reduces cost but also brings new customers to Kohl’s.”

He seems to admire what Nordstrom is doing and has noticed Walmart’s efforts. “Nordstrom is innovative. It has created a portfolio of full-line department stores, Nordstrom Rack, Trunk Club and a new concept, Nordstrom Local, that is essentially a ‘service’ location. Not all of this will work but the fight is admirable. Finally, I can’t ignore Walmart, which is doing very well in bricks and mortar and trying hard in online [though it’s losing $1 billion in ecommerce] particularly with the purchase of Jet. They are having success with food ordering online and pickup at store,” he explained.

Chatterjee is optimistic about Nordstrom and Target and concerned about Macy’s. As she explained, “In Los Angeles, Nordstrom has two big stores with a small store between them. The concept is that you order online and pick up at the small store then consumers go to the large stores to browse. They are trying to tackle a big problem for the industry – the high cost of returning goods purchased online. Target is making some new changes which I have noticed. But Macy’s has about 300 showcase stores that it’s renovating and plans to use its other stores for self-service. I think consumers won’t go to the self-service stores because of the poor customer experience which will initiate a doom loop.”

Are Ecommerce-Immune Incumbents a Better Bet?

Some bricks and mortar stores are relatively immune from ecommerce. As Robertson pointed out, “The best defense is always a good offense and it is incumbent on bricks and mortar retailers to build strategic walls before they are losing customers. Some have; some have not. I would start with Harrods. They have done an admirable job of investing to beautify the store, training a knowledgeable set of associates, and partnering with major brands to essentially ‘lease’ space at Harrods. Costco has been reasonably immune to attack. TJX and Ross – the ‘treasure hunt’ stores – seem to have found protective cover.”

Target Tops The List Based on the Numbers

Based on a quick analysis of some key numbers, Target and Walmart top the list. Here’s more:

Target.Revenues rose 3.6% in the second quarter and at $18.42 billion beat expectations by $90 million while adjusted earnings of $1.82 were 24 cents more than expected, according toCNBC. Its stock is up 66% in 2019 – and at a P/E of 17.7 – trades about 4% below its all-time high

Walmart.Revenues rose 2.8% in the second quarter and at $130.38 billion beat expectations by $270 million while adjusted earnings of $1.27 were five cents more than expected, according toCNBC. Its stock is up 25% in 2019 – and at a P/E of about 27 – trades about $1 below its all-time high

Kohl’s.Revenues fell 2.9% in the second quarter of 2019 and at $4.17 billion missed expectations by $30 million while adjusted earnings of $1.55 were two cents more than expected, according toCNBC. Its stock is down 26% in 2019 – and at a P/E of about 11 – trades 40% below its all-time high.

Nordstrom.Revenues fell $60 million below estimates to $3.87 billion in the second quarter of 2019 while adjusted earnings of 90 cents beat by 15 cents. Nordstrom guided revenues down 2%, according toCNBC. Its stock – which trades at a P/E of 10.6 – is down 32% this year and 59% below its all time high.

Robertson and Chatterjee were not picking stocks – but I would guess that they view Nordstrom and Kohl’s as making investments in boosting customer experience that will pay off over the long run. For now, it looks to me as though Target and Walmart are now enjoying the payoff from their investments in omnichannel retailing.

Read More

Be the first to comment on "Via https://newsapi.org online business online marketing online business opportunities Wharton, MIT Professors See Upside At Nordstrom, Kohl’s, And Target"

Leave a comment

Your email address will not be published.


*