Bloomingdale’s impressive and aggressive tact
Upmarket US department store, Bloomingdale’s, believes the way forward is “impressive and aggressive” online and offline footprints, adding that it is actually the single channel retailers that will soon become obsolete, not department stores.
“I remember when they were predicting the imminent doom of the department store with the onset of the internet,” John Natoli, OVP store operations, Bloomingdale’s NYC, told this year’s Westfield World Retail Study Tour earlier this year in New York. “But, the department store hasn’t gone the way of the dinosaur. We’re still here.”
Bloomingdale’s, owned by Macy’s Inc, was started by brothers, Joseph and Lyman G. Bloomingdale, in 1861, with the first store opened in 1872 on Third Ave in New York City. It has more than 40 stores today. The original New York City flagship was moved in 1886 to its current location, on 59th Street and Lexington Avenue, where this year’s Westfield World Retail Study Tour was treated to a private presentation.
“No longer are people predicting the demise of the department store,” Natoli explained. “Our CEO predicts the demise of the single channel merchant. Unless you’re a speciality ma and pa retailer, if you want to compete in this market, you now have to have a very impressive and aggressive footprint in both areas.”
In knowing this, Bloomingdale’s, home to the iconic small, medium, and big plastic brown bags, which have been part of the brand’s image since the 1970s and are the number one selling SKU in the entire New York department store, has ramped up its online operations. This includes click and collect, mobile capabilities, and instore iPads, in an effort to keep apace with the changing shopper.
The tour learnt the rollout of click and collect, largely used by those in neighbouring suburbs to the NYC flagship, has led to larger sales instore. The average transaction of those buying online and collecting instore is higher than the average instore purchase and the average online purchase.
“The customer that picks up an item in the store, 30 to 40 per cent of the time they’re shopping more,” Natoli said. “That’s what we call ‘influenced transactions’. It’s more [spend] than the original transaction, and more than the average transaction of the other two channels – online and instore.”
Testing new concepts
Earlier this year, Bloomingdale’s opened a new concept store in Stamford, California, where it is currently testing new technologies, including same day delivery. At Stamford, Bloomingdale’s has also installed fixed iPads in the fitting rooms to assist with service.
“One thing every associate has in the Stamford store is a smartphone. It’s a smartphone, client book, cash register, lookbook, and a POS device. I can search and send. I can locate merchandise from other stores. I can see what items I have in my store. Associates can also access email. One of the things our associates love to do with their customers is text customers when they see an item come in they think they would like.”
Bloomingdale’s’ has also begun implementing the technology into fitting rooms. At Stamford, iPads in the fitting rooms are able to act as a product guide and can also connect to the online store. Customers can scan an item and view what others looked at who have also previously tried on the same item or similar products. There’s also an assistance app enabling customers to request service.
“Sometimes people stop shopping, not because they’re done with their shopping, but because they’re tired of getting undressed and then redressed to go out and find right size. It can be harrowing.
“Now, in our lingerie department we have installed telephones in every space. All the customers needs to do is pick up the phone and it’s going to ring through to a radio frequency telephone, where one of our specialists can go in there and assist. We are really trying to be an omnichannel retailer.”
A place of theatre
Despite the emphasis on technology, Natoli explained to the tour Bloomingdale’s associates’ relationships with customers cannot be replaced by screens or the click of a button, and retail stores still need to be a place of theatre.
Bloomingdale’s prides itself on its recognition programs for its staff, with monthly, quarterly, seasonal, and annual awards – including what it has dubbed the ‘Oscars of retail’ where top performing sales staff are flown in from around the country to New York for a day of recognition and pampering.
“Our stores are a differentiator, because there’s so many things we can do in the store that you can’t do online. There is no fitting room online. You can’t pick up a piece of merchandise online. My associates can create relationships with the customer. That’s the differentiator.
“Associates don’t have clienteling relationships with their guests, they have personal relationships with their guests. They get invited to their weddings, they get invited to the first birthday party. We want that. We want them to have a true relationship. It’s a lot more fun to shop with a friend,” he said.
“Some of these things that are still true today in omnichannel retail were true when Joseph and Lyman opened the first store, and that is animation. When Joseph and Lyman opened on Third Ave, they always had a showman. It was how they attracted customers, and they always thought retail was about theatre. It was fun and there were ‘made you look’ type animations, and that’s what we’re still trying to do today. We came here to create animation and excitement. You are as much an entertainer as you are a merchant.”
For more exclusive coverage of this year’s Westfield World Retail Study Tour, pick up a copy of Inside Retail Magazine’s August edition. For more information on Westfield World Retail Study Tour Breakfast series next month in Sydney, Melbourne, Adelaide, Brisbane, Perth, and Auckland, visit http://www.retailstudytour.com/BreakfastSeries.aspx.
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