Nordstrom Gets Strong Same Store Sales with Ship-From-Store

25 08 2010

There’s an interesting story in the New York Times about how Nordstrom is driving strong same store sales with a supply chain and inventory system that allows online customers from Nordstrom.com to see what’s in each store online.  The customer can then drive to the store and see the product live, or can have the product shipped to them from the store.

What?  You can’t do that with every major, high-end retailer?

The vast majority of multichannel retailers (as they’re called, although any retailer that’s surviving or succeeding must be a multichannel retailer) run each channel separately.  “Traditional retailers have a traditional way of doing things” as Adrianne Shapira, an analyst at Goldman Sachs, points out in the article.

A large share of the innovation you’ll see in Retail and E-commerce will be in more efficient supply chain and inventory management.  These improvements that seem to be behind the scenes will drive the blurring of online and physical, and play a key role in change and innovation in the coming decade.

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Staples 2.0: When Online Resembles Offline

5 12 2008

Sarah Tavel of Bessemer Partners has a great post about The Staples 2.0 effect, how large e-commerce retailers are leading to the closure of mom-and-pop stores.  I highly recommend it.

The conclusion that e-commerce will come to more closely resemble physical retail in the long run always struck me as a largely underrepresented one. The seismic drop in consumer spending seems to be the catalyst to put this reality front and center.

The post got me thinking. Search Engine Ranking is the key ingredient here.

Many direct comparisons can be made between online retail and physical retail: branding, repeat customers, customer acquisition cost, economies of scale, etc. Many insurmountable benefits to scale.

With Search Ranking, it’s as if once you’ve “earned” your spot, you’ve not only got a flagship store in Times Square, but also in London Square, Union Square, Mall of America, and so on… for FREE. The land grab for this space spawned Web 1.0, Web 2.0, and on.

The existence of Search Ranking, based on popularity (links), makes it even more insurmountable to dethrone a market leader. It’s not the only benefit to scale, but my gut says that it’s the straw that breaks the camel’s back for new entrants.

Some of the thinking is very obvious. Commodities will be bought from the low-cost producer. Long tail wise, there can be a healthy long tail serving infinite small-scale interests given removal of geographical barriers. Today’s basically zero cost of real estate means these niches have a lot of room to thrive.

Hence an Etsy, Zazzle or such can thrive as well.

You’ll basically see large e-commerce retailers, with niche retailers competing on a specific niche service, which sure looks a lot like physical retail.

There’s still of lot of room to grow and create value to build a brand and your base of loyal users/customers/followers: aggregation, customization, community, socialization.

It’s just unoriginality that will go unrewarded… it’s no different on the Wild Wild Web.

(via GigaOM)