Off-price retailers (think Marshall’s, T.J. Maxx) haven’t relied on an ecommerce strategy in the past, and that mindset is now finally changing. This is good news for customers. As the shift to online accelerated during the pandemic, shoppers have come to expect to be able to shop their favorite stores on any channel at any time. Off-price (value) retailers have successfully built a treasure-hunt like experience for customers in-store and as a result have hesitated to jump into ecommerce—what if this unique shopping experience did not translate digitally? Fortunately, this has been thoroughly de-bunked by the likes of Rent-the-Runway and Thredup. The future of retail clearly lies in the ability to offer physical and digital shopping options seamlessly. And now, these value retailers are having to play catch-up to increase their ecommerce presence.
Luxury off-price retailers aren’t as late to the party. They have recognized that there is a distinct advantage of bringing online together with in-store. For example, Saks Off 5TH has been investing in digital growth as a way to grow quickly and serve customers in a new way. Currently, digital and stores business are separate, but the goal is to create a seamless customer experience. Saks OFF 5TH President and CEO Paige Thomas shared her thoughts about this during a NRF Retail Real Talk podcast saying, “When we think of Saks OFF 5TH and the customer, we think of it through an omni lens. The customer journey—the pain points and barriers—is what we’re focused on to make it easy and convenient for them to find their most favorite brands at a great price.”
Nordstrom is also investing heavily in digital. Last year they merged Nordstrom with off-price Nordstrom Rack to make shopping super convenient for their customers. “The integration has sped up order fulfillment, with on average four times more product available to the customer the next day and a one-day reduction in shipping speed.”
To ensure the digital experience delivers, Nordstrom is rapidly expanding its product assortment with the goal of offering more than 1.5 million products over the next three to five years. Nordstrom is taking an interesting approach to this expansion deciding not to do it via a marketplace or rely heavily on wholesale rather they’ve increased drop shipping and a reliance on key brand partners (think digitally native) to get customers what they want when they want it.
Nordstrom Chief Operating Officer Ken Worzel told RetailDive, “Our customers don’t view themselves as store or digital shoppers, or only as Nordstrom or Nordstrom Rack shoppers. They see us as one company, and they expect to be able to engage with us seamlessly across all of our touchpoints.”
Nordstrom partners with CommerceHub to power their drop-ship network. We help Nordstrom focus on getting closer to the customer by connecting them to products that are available so Nordstrom can serve them in the way they want to be served.
Off-price retailers can’t ignore that consumer shopping behaviors have forever changed. Online is not an afterthought or add-on strategy. It’s nuts-and-bolts as physical and digital fuse together ever more closely. Both need to be in lockstep to meet new expectations and provide a truly omnichannel and more convenient customer experience.
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