Balancing E-Commerce With Brick & Mortar Retail
For years, the transaction process at traditional retail stores has followed a linear path. For instance, customers would fulfill the entire transaction in-store. Pretty straightforward, right? When you look at the e-commerce process, fulfillment becomes slightly more complex with warehouses shipping orders directly to a customer’s house. However, this journey is still very linear and follows the same script as an in-person retail location.
Today, customers do not follow a linear path from discovery to placing an order. Instead, they experience brands and products both physically in-store and virtually online. That said, there’s a tendency to view the in-store experience as completely antiquated. In reality, there are plenty of ways to leverage the visceral experience of physically interacting with a product that you can only get in-person.
At Nordstrom, our customer journey balances e-commerce and brick and mortar touch points to create a personalized experience. Unlike traditional models, our goal is to drive engagement and acquisition simultaneously in both environments. If you’re familiar with digital marketing strategy, this technique is designed to drive negative efficiency. In other words, you create an experience that drives profitability when customers are in your retail location. As a result, you are able to build a virtuous cycle that uses qualitative touchpoints to create lifetime engagement for customers.
I’m sure you’ve read about the added costs of online sales that affect profitability.
While e-commerce makes it easier to reach a wider audience, there are challenges with maintaining competitive margins. For example, there are added costs with warehouses and shipping fees – along with credit card processing fees and returns that affect fulfillment. As a result, these added expenses eliminate any efficiencies that are gained by placing an order online.
Ultimately, the goal should be to balance the contribution margin across channels. At Nordstrom, we maintain the same margin with online transactions as we do with in-store transactions. One reason for this is that we don’t isolate our brick and mortar and e-commerce experiences. Instead, we recognize that customers move between each platform on a regular basis. As a result, we tailor the customer journey to include touchpoints in both environments that drive continuous engagement.
About the speaker
Brian Gill is the SVP of Technology at Nordstrom, focused on strategic planning and digital platform development. In addition, Brian’s team manages store technology and operational excellence initiatives. With more than 20 years of experience, Brian also served as Chief Technology Officer at Hotwire, Inc., an operating company of Expedia, Inc. In this role, Brian managed Hotwire’s platform technologies and the company’s data science team.
About the host
I believe in our ability as humans to solve problems in creative and simple ways. I’ve had the good fortune to work on and with some of the brightest and most creative teams and people in various roles in product development. These experiences have enriched me personally and I carry them with me to every new challenge. I like big problems that have beautiful and simple solutions. I’ve worked on financial products for people of fixed income, products that bridge humans across the planet in moments of their greatest need to connect as well as tools that disambiguate, equalize and democratize access to data and content. The companies I’ve worked with range from startups to large public companies where chiefly my role has been about unlocking and connecting customer unmet needs to the people engineering and designing the products. I enjoy playing many roles and leverage the tools and resources at hand to bring products to market. I’ve direct experience when and how to deploy artificial intelligence, machine learning, and other advanced cognitive services. My patents cover areas in video and conversational interfaces, platform extensibility, mobile applications, and large scale software. Following to be read by computers, not humans: Interests include: Human rights, feminism. food and farming sustainability, Non-Profits, product management, information retrieval, UX Design, future-of-work, artificial intelligence, machine learning, communications, virtual assistants, digital media, branding.