The growth online isn’t making it easy for retail manufacturers. The way shoppers have changed their perspective on making their purchases is causing retailers to revamp how to customers into their stores. One service that companies are opting to offer is online order and in-store pick up services. It allows customers to take advantage of a value-added convenience service, and at the same time, physical store retailers are able to get traffic into their doors.
Internet Retailer recently reported that luxury apparel and accessories manufacturer Kate Spade is planning to officially launch a buy online, pick up in store program later this year. The company tested the service late last year and had success. Within the article, Chief operating officer George Carrara said, “We know that regardless of which (way) she actually transacts, whether that’s online or in a store, that that journey is increasingly starting in the online space, which is certainly advantageous to us in terms of our ability to tell great stories and build engagement in the online experience”.
The fourth quarter numbers show all the reasons why Spade is deciding to offer the service. It’s net revenue last year went up 7.6% to $429.0 million, from $398.6 million the previous year. Sales from Kate Spade North America reached $371.3 million, up 13.7% from $326.7 million. Yet at the same time, sales from Kate Spade International of $52.1 million, down 13.3% from $60.1 million the year prior. Also, the retailer’s net income went drastically down to $61.5 million, a 51.4% drop from $126.5 million.
One company that has added in-store pick up to its’ repertoire is Wal-Mart. The retail leader has implemented Wal-MarttoGo in several major US cities. Wal-MarttoGo allows customers to place their orders online and perform their own pick-up at select Wal-Mart stores. Loyal customers may already be planning to shop there, and the service only gives them another option to shop online if they choose to. This results in retaining loyal customers.
Another service that Wal-Mart, Macy’s, Amazon, Google, and others have implemented that Kate Spade may consider is launching Same-Day Delivery this year as well. Since it tested its’ store pick up program during the holidays last year, Spade could test same-day delivery within a small market this year. Same-day delivery is expected to reach $987 million by 2019 in the US, which has a lot to do with online retail growth.
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Reference: 3.7.16, www.internetretailer.com, Matt Linder, Kate Spade will launch buy online, pickup in store
