I'm at the Internet Retailer this week at the McCormick Center in Chicago. I haven't been to an industry conference like this since 2000. The opening by Jack Love was, frankly, a throw away. Nothing like a Phil Becker welcome at Digital Identity World. Jack spent his 15 minutes telling us why his conference was so important ("this show is full of content") and saying things about ecommerce that anyone who's been paying attention since 1997 probably know ("ecommerce works as well for small merchants as large merchants"). Instead, he should have introduced a theme and set out the "state of ecommerce."
Many of these attendees are retailers, not vendors. This isn't so much an ecommerce conference as an online retailing conference. The vendors are all on the exhibit floor. That's OK. We're mostly here to cruise the exhibit floor and learn about competitors as well as sense opportunity.
A second short intro speaker (didn't catch the name) did speak to some trends:
- Ecommerce is becoming more mainstream. For example, last year, for the first time, online apparel sales surpassed online computer sales in terms of dollar volumes. Given that basket sizes are much smaller, that translates into any more individual orders.
- Higher fuel costs are going to hit online retailers. Many have been eating the cost of shipping to compete with offline retailers, but that probably won't last.
- Green is becoming a factor in ecommerce. Consumers who care about green products can find them more easily online than offline. On the other hand, green often translates to "local" and that can hurt online sales.
Mike Boylson, Executive Vice President and Chief Marketing Officer at JC Penney is the keynote speaker. He started with an interesting statement: The things we've done in the past to get where we are won't get us where we need to go. Half of all households in the US shopped at a JC Penney store sometime in the past year. Their ongoing goal is to be the preferred shopping choice for middle America.
Before 2001, JC Penney was largely decentralized and there was little brand identity between individual stores as they merchandised separately. Between 2001 and 2004, they built infrastructure to support centralized ordering and sourcing. They've built four million sq foot fulfillment centers and set up their own design and sourcing capabilities.
Mike showed us videos which didn't tell me much about JC Penney's ecommerce strategy. I felt cheated out of those 5-10 minutes. I didn't spend money to come to a conference to see advertisements.
One of JC Penney's strategies is to put destination brands (like Liz Clayborn merchandise) in their online store. They're taking advantage of longtail principles here because they don't have room in their stores for all this merchandise, but of course, online shelf space is almost unlimited. These brands cause JCP to be more relevant and relevance is key.
JCP's 35,000 POS terminals are linked into jcp.com so allow in-store sales associates to help customers order online and handle returns. Four out of five web shoppers are store shoppers. The ecommerce platform has become the hub of the business, managing orders, fulfillment, etc. The "know before you go" program allows shopper to research online to find products in the store. Linking the online use to offline products is important.
It's just a matter of time until all marketing is digital. Make jcp.com much more exciting and interactive. Customer media habits are changing. Shoppers 18-35 years old don't access newspapers, magazine, and so on in the same way their parents did. Not to mention the fact that it's expensive. Digital asset management is key here.
JCP is organizing according to channel/customer rather than business unit. For example, marketing has P&L responsibility for all of the "direct" business (online and catalog). Have one "voice" and a consistent look to the brand.