The value is in the visit, not just the sale

Why experience and engagement are important at Macys.com

by Alison Bolen, SAS Insights Editor

In the retail industry, Macy’s is an iconic brand. Featured in television, on film and at the center of many holiday traditions, it’s hard to deny the popularity or the cultural influence of the Macy’s department store.

When retail customers started shopping on the Web, that influence extended online, and Macys.com quickly became one of the first retailers to get the online channel right. Then, along came smartphones and tablets – and Macys.com did it again. Highly regarded in the retail industry as a pioneer in omnichannel success, Macys.com built a strategy that offered personalized service, excellent selection and a common brand experience on every device.

But today, “the notion of the omnichannel is evolving,” says Darren Stoll, Group Vice President of Marketing at Macys.com. “We’re very much in a period of change.” Stoll discussed the evolving Macys.com omnichannel strategy in a presentation at Retail’s Big Show this week in New York City.

Omnichannel is about the customers, not the channel

Historically, omnichannel strategies have been all about optimizing sales for each channel, with the retailer’s goals focused on driving a purchase from every visit. “On the surface, that’s the obvious opportunity,” says Stoll, “Especially when the data tells us that customers who purchase online and in the store are worth almost twice as much as customers who shop only one channel.”

But Macys.com has realized that a successful omnichannel experience is more nuanced than that. Customers who engage but don’t purchase on some channels can turn out to be quite valuable. In fact, customers who use multiple devices to explore, search and compare products but never purchase online might end up being some of your best customers.

According to Stoll’s data, customers who engage on multiple channels are worth 70 percent more than those who do not – regardless of where they purchase. Customers who use multiple devices do not simply migrate their dollars from one channel to another, he explains. Indeed, Macys.com customers are using each channel differently:

• Desktop customers are looking for value and options.
• Mobile is for exploration and to get customers where they want to go.
• Customers who download and use the Macys.com app are interested in a more personal shopping experience.
• The physical store is all about the Macy’s experience, with the sights and sounds and smells of an iconic retail atmosphere.

“We need to fundamentally understand what a customer is trying to do when they’re interacting with us,” says Stoll. And not just by device. Instead ask, Where are they? What are they looking for? What is their goal for the interaction?

“The way a customer uses the Macys.com mobile app on the subway is quite different than the way the customer uses that app in the store,” says Stoll.

Analyzing omnichannel data

Traditional omnichannel marketing goals for most retailers sound like this: attract customers, promote products and move the customer on a path to a sale. When you realize that model no longer works, or that it’s not the only model, how can you use data and analytics to change your strategies?

“The value is the visit, not just the sale,” says Stoll. “It’s a shifting mindset, but once you grasp it, you can start to do some really neat things. And this is where big data comes into play.”

For example, Macys.com can ask, How are they engaging? How are they sharing? What are they purchasing? And where? And then use the data to understand how behaviors and engagements on different channels affect the bigger picture.

“With analytics, it becomes forward looking,” says Stoll. Combining engagement and purchase data to build forecasts reveals how omnichannel behaviors drive not only this month’s sales but next season’s sales as well.

Seeing the value in online activity – regardless of whether it leads to an immediate purchase – is key to the omnichannel strategy at Macys.com.

“Customers who start on a smartphone are just as likely to complete a transaction on desktop as they are on smartphone,” says Stoll. And according to their survey data, the No. 1 thing customers think about doing after smart phone behavior is a purchase in store.

Those two data points alone can really change the way you think about smartphone activity. Essentially, Stoll says, the smartphone amplifies consumer behaviors on other channels.

Utility, motivation and inspiration

Everyone in the industry is talking about omnichannel, but Macys.com is focused on the customer experience. “If you ask a customer in our store how we’re doing with the omnichannel experience, she won’t have a clue what you’re talking about,” says Darren Stoll. “But she knows when we get it wrong.”

If the event or product is different online than it is in the store, for example, she notices. “The experience needs to be easy, seamless and connected, not jarring” explains Stoll. “You do that poorly, and it will be a bad experience for the customer.”

Ultimately, it all comes down to providing the most value for the customer based on where and when they’re engaging. “Utility, motivation and inspiration are key to retention through convenience,” concludes Stoll.