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Survey: Retailers not using consumer data to boost omnichannel shopping efforts

BY Marianne Wilson

Chicago — While retailers have collected years of customer data, only 9% are leveraging the information in a structured, usable way, according to HRC Advisory, a leading strategic retail advisory firm and unit of Hilco Global. The finding is part of HRC’s latest retail industry study, which found that outdated organizational structures and processes, non-integrated IT platforms and a lack of a clear roadmap are major barriers preventing customer data in enabling a retailer’s omnichannel efforts.

“Retailers are inundated with consumer data and research, but the reality is the vast majority are not able to effectively use it,” said Farla Efros, executive VP/COO of HRC Advisory. “Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick and mortar practices.”

The survey also found that retailers aren’t operationally structured for omnichannel. Most retailers (87.2%) said they have taken initial steps toward or are planning to initiate an organizational change to better integrate processes across all purchase channels. But for 88.2% of retailers surveyed, e-commerce operations and marketing largely remain separate silos.

Other significant findings of the report include:

Retailers aren’t leveraging customer data in a structured way. Only 9% of retailers studied are effectively leveraging their vast amounts of customer data in a structured way as part of their merchandise buying and planning processes. While 87.2% of retailers in the study plan to focus on more effectively using customer data to grow sales, but only 65.4% are actually in the very early stages of such efforts.

• Inventory isn’t being fulfilled effectively. 84.5% of retailers surveyed (across all sectors) said they are focused now or over the next 12 months on enabling new fulfillment options to avoid the lost sale. However, only 10% of retailers surveyed have the capabilities to effectively fulfill from store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns.

Retailers have not found the right balance between online exclusives and product available in all their channels. Less than half (42.5%) of the retailers surveyed said they had or were exploring “online exclusives” beyond color and size extensions to new categories and brands, while 66.2% of retailers are primarily focused on size and color extensions to address the realities of constrained brick and mortar space and slow inventory productivity.

Key additional findings:

• 78.2% of the retailers surveyed have efforts underway to clean up, organize and integrate various sources of customer data.
• 74.3% of the retailers have migrated to the same prices across all stores and channels.
• 45% of retailers are considering varying prices across channels and stores post initial markdown.
• Less than 15% of retailers have started to make the necessary changes to planning and forecasting processes to reflect the impact of new fulfillment capabilities.

“First and foremost, retailers need to recognize there has been a meaningful shift in power towards the consumer resulting from today’s numerous ways of purchasing and much increased price transparency,” Efros said. “In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can’t be matched by newer pure play online competitors.”

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Wal-Mart names Instagram co-founder to board

BY Marianne Wilson

Bentonville, Ark. — Wal-Mart Stores has appointed Kevin Systrom, CEO and co-founder of photo-sharing service Instagram, as a new member of the company’s board, effective Sept. 26. Systrom will also serve as a member of the retailer’s technology and e-commerce committee and its compensation, nominating and governance committee (CNGC).

“Kevin’s entrepreneurial background and his technical and digital expertise will be invaluable as we further connect with customers and deploy new capabilities through e-commerce and mobile channels,” said Walmart chairman Rob Walton. “Walmart is investing in e-commerce capabilities through talent, technology and fulfillment. Kevin’s passion and deep knowledge of social media align with our focus to engage customers through our digital and physical

Systrom is currently CEO of Instagram, which was acquired by Facebook in 2012, where he is responsible for its day-to-day operations and has overseen its growth to more than 200 million monthly active accounts.

“Walmart has had a profound impact as a global leader in retail,” Systrom said. “It’s an honor to join the Walmart board and have an opportunity to help provide more convenient and flexible ways for people to shop.”

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Macy’s to increase holiday hires by 3.6%, driven by increased omnichannel needs

BY Marianne Wilson

Cincinnati — Macy’s said it plans to hire about 86,000 seasonal associates for its Macy’s and Bloomingdale’s stores, call centers and distribution and fulfillment centers for the 2014 holiday season, an increase of about 3.6% from 2013.

In particular, Macy’s said, its seasonal workforce has grown in recent years in the company’s network of online fulfillment centers in support of increased sales generated by the company’s omnichannel business strategy.

In 2014, approximately 10,000 of the 86,000 total seasonal positions will be based in the direct-to-consumer fulfillment megacenters in Martinsburg, West Virginia; Goodyear, Arizona; Portland, Tennessee; and Cheshire, Connecticut, and well as in product-specific fulfillment centers in Sacramento, California; Stone Mountain, Georgia; Secaucus, New Jersey; and Joppa, Maryland.

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