Why the retailers closing stores probably won’t see a major e-commerce uptick

• Closing, retailers
why-the-retailers-closing-stores-probably-won’t-see-a-major-e-commerce-uptick

According to post-holiday sales data, U.S. overall retail sales were flat or up modestly; however, some traditional retailers saw sales declines to varying degrees. By comparison, online sales were up roughly 19% according to data from Mastercard, which said total holiday retail sales increased 3.4% compared with a year ago.

Macy’s, JCPenney, L Brands, Kohl’s and even Target reported disappointing results. Macy’s said it would close nearly 30 stores, while Pier 1 is closing almost half its stores. Total store closures last year exceeded 9,000 locations.

Mindset: Close stores, push e-commerce

Following lower-than-expected in-store sales, the natural impulse for some retailers is: close stores and push e-commerce. And that may make sense in the abstract and in some instances. However too many “omnichannel” retailers don’t fully appreciate the symbiotic relationship between stores and online sales. This is reflected most significantly in the still-frequent bright line separation (often with separate P&Ls) between e-comm and store teams.

Euclid Analytics CEO Brent Franson told me in 2017 that when stores disappear, it hurts online sales as well. (Euclid was acquired by WeWork in early 2019.) I haven’t been able to find further support for that statement, but it makes considerable sense.

In-store returns boost online sales

In an off the record conversation last November, I was told by a digital commerce executive at a major female apparel retailer that the mention of in-store returns in online ads boosted e-commerce sales. Why? Because people will be more inclined to buy “sight unseen” if they’re confident then can return products in store. And according to data compiled by eMarketer, 75% of online shoppers prefer to return products in-store.

An interesting twist on that concept is the partnership between Kohl’s and Amazon. Kohl’s accepts returns of Amazon products in all its stores. Amazon benefits from more than 1,100 “return centers” (Kohl’s stores) across the U.S. For its part, Kohl’s has said that the policy brings younger buyers into the store, who often go on to buy something.

Local search drives e-commerce too

The in-store return of e-commerce products often results in additional sales. People tend to buy more in a store after returning an online product. And easy returns create support and reinforce brand loyalty.

It also goes the other way. LocalSEOGuide’s Dan Leibson said in a phone interview that many of the firm’s big box retail customers see millions of dollars in online sales being driven by local search and Google My Business. In other words, someone looks for a particular branded store “near me” and then clicks through to the website, ultimately buying something online.

“This is a thing for all major retailers,” Leibson explained. “There’s an underreported amount of revenue coming this way.” In fact Leibson believes that major retailers, paradoxically, should be thinking about local search as a potentially significant driver of e-commerce and optimize their pages accordingly.

BOPIS and consumer agnosticism

This phenomenon also plays off the “omnichannel” paradigm. Consumers are relatively agnostic about where they buy something if they’re confident they can take the product back if it’s not right. This is also reflected in the growth of BOPIS (buy online, pick up in store).

As Deloitte has argued in its “2020 retail industry outlook” report, convenience is a major incentive or issue for consumers: “Whether in the store or online, consumers want a friction-free experience, from finding ideas and inspiration to making purchases, managing returns, and advocating for the brand.”

Convenience is king for consumers

Conversely, when a store fails to deliver on that convenience it can damage shopper loyalty and even the reputation of the brand. I had such an experience with Banana Republic over the holiday when I was not permitted to return a shirt purchased online (that didn’t fit) to one of their stores. I won’t be buying anything more from Banana Republic (online or off).

So, while closing underperforming stores makes economic sense for many distressed retailers they should think carefully about which stores they close and not simply assume that customers will shift their buying behavior to the brand’s online shopping cart.


About The Author

Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.



Closing the Network Gap

• Closing, Network
closing-the-network-gap

At LinkedIn, we believe that two people with equal talent should have equal access to opportunity. But unfortunately, that’s not always the case. 

We’ve all heard that “who you know” matters, and research proves that’s true. More than 70% of professionals get hired at companies where they already have a connection. And on LinkedIn, applicants who are referred to a job by a current employee are nine times more likely to get hired. 

In other words, networks matter a lot. But, like opportunity, they are not distributed equally and are built over time. In fact, there are three key factors that contribute: 

  • Where you grow up. A member in a zip code with a median income over $100K is nearly 3x more likely to have a stronger network than a member in a lower-income zip code

  • Where you go to school. A member at a top school is nearly 2x more likely to have a strong network

  • Where you work. A member who works at a Top Company is almost 2x more likely to have a strong network

We call this difference the network gap. The reality is that where you grow up, where you go to school, and where you work can give you a 12x advantage in gaining access to opportunity.

What we are doing about it

We at LinkedIn have a unique opportunity to help close the network gap by focusing on solutions in at least three areas – technology, programs, and people. First, through our technology, by measuring the unintended consequences of every new product or feature we build. We do this by asking, “Does this feature increase or decrease inequality among our members?” 

Second is through company-led apprenticeship programs that create opportunities for people with non-traditional backgrounds. At LinkedIn, we have introduced programs like Reach, Ramp, and Unlock, to train and hire talent for careers in engineering, recruiting, and sales. 

Third is through each of us. Together, we can make strides toward closing the network gap by reaching out to someone outside our own network.

Take the Plus One Pledge

Last year, I started keeping track of the informational interviews I was doing. I realized that almost every one of my meetings were with people who looked exactly like me: white women with four-year college degrees who were already in my network. The irony was not lost on me. Although I spend my days encouraging others to close the network gap, here I was unintentionally contributing to it. I made a commitment that, before helping another person who looked just like me, I would help someone outside my network. This commitment became the Plus One Pledge.

Earlier this year, we asked our employees to take the Plus One Pledge and intentionally share their time, talent, and connections with someone outside their network. Their response was greater than we could have imagined: more than 60 percent of our employees took the pledge.