How Legacy Retailers Are Infusing Tech Into Brick-and-Mortar

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Fewer people are going into stores and more consumers are shopping online. We know that. But many retailers, including Macy’s, are now finding more ways to integrate in-store experiences and ecommerce into their offerings to offset brick-and-mortar declines and drive more foot traffic into their stores.

It is a redefinition of a retail revolution that still has fighting power for the old retail guard.

When Macy’s CEO Jeff Gennette stepped into his new role in March (he has been with the company in various roles since 1983), he addressed the question of how to increase lagging sales head-on by introducing the five-point North Star Strategy that will be rolled out in stores: From Familiar to Favorite; It Must Be Macy’s; Every Experience Matters; Funding Our Future; and What’s New, What’s Next.

The points are difficult yet still tenable even when pitted against retail behemoth Amazon, which is predicted to surpass Macy’s in apparel sales in 2017, say many analysts such as Cowen & Co (see chart below).

“Everything is changing almost on a daily basis now,” Tom Caporaso, CEO of Clarus Commerce, a Rocky Hill, Conn.,-based technology and marketing firm that sells loyalty technology, told Street Fight, “It’s an amazing time to be in this digital space, touching retail and mobile and loyalty.”

Caporaso is optimistic about big-brand, multi-location retailers such as Macy’s, referring to its biggest asset: its (billion-dollar) real-estate portfolio.

But Caporaso cautions legacy brands must listen to their customers to effect change and adapt from the top down. Caporaso looks at retail through the “lens” of a loyalty program to create more engagement content with consumers.

“Agility and flexibility aren’t words that you use for legacy retailers, but if you’re able to do that you can be quick to listen, understand and ultimately change how you’re doing things that can be more experiential and [create] more loyalty,” he says.

Part of the business strategy involves adapting how to market, how to interact with consumers and how to invest in technology. Retailers cannot continue to do the same thing they did 10 or 12 years ago, or even two years ago, Caporaso says.

“Consumers speak very loudly with their dollars, and the brand and experience might not be what they want.”

For millennials it can mean being more innovative and mobile savvy to reach a younger demographic during one of the biggest times for purchases, by text or geolocation prompts.

Not all, but more and more are making decisions by mobile phone or online, he says.

“How do you impact through innovation to reach those millennials to get them to look at your brand as kind of cool and fun and maybe not so old and familiar?”

Retailers can engage through low prices or loyalty programs or with in-store experiences, he says.

Rent the Runway, with its cash back, coupons, promo and coupon codes, appealed to many prom-focused youngsters.

“We watch this stuff every day [at Clarus Commerce] and you can see these trends and you can see some of the mistakes, some of the right moves,” he says. 

Could there have been a way for Macy’s to draw in new customers into its stores, with a “Meet Me in Macy’s” during the prom season, Caporaso asks.

“These are the types of things that play a part with the flexibility that all retailers need to have today,” he says.

Publishers Reach Out to New Customers With Loyalty Programs
Caporaso says Condé Nast has debuted an exclusive program called SELFstarter, a meal-plan service based on health and wellness for consumers. Clarus Commerce built the platform and commerce engine that will marry content and commerce to inform shoppers and engage customers.

The new site started last month, Caporaso tells Street Fight, and the publishing house is monitoring how customers are reacting to the content.

For the new venture, Condé Nast built all the meal plans from scratch, hired an in-house chef, and invested in photos and artwork. 

“It’s a very exciting program,” says Caporaso, pointing out that companies are trying to get into the competitive market that already claims Blue Apron and other healthy food-conscious sites. Everyone is “figuring out how to eat better, look better as well as save money.”

He also sees more opportunities with other publishing houses outside of Conde Nast that are looking for more engagement content for consumers and more loyalty to their brands.

“For me it’s a fun time because we’re sitting in the middle of a transformation across retail every day and it’s really exciting,” Caporaso says.   “Sometimes people get really nervous about change or get excited, it’s a fun time to be a monitoring technology company in this space because a lot of change is happening.”

Amazon Prime is probably the best premium loyalty example, Caporaso says, adding that most customers see real value in being a subscriber and no longer balk at the $100-a-year fee.

To the loyalty company CEO, that’s the key.

“That’s what we do for our partners and our programs, to try to build in premium loyalty programs them to enroll with messages and communications and impressions for customers to get them enrolled and engage with the brand in a meaningful way,” Caporaso says.

“If loyalty programs is what you want, the fee is not going to be such a big deal,” he says. That’s why Amazon is doing so well.”

Nancy Ayala is a Street Fight contributor.

Photo credit: Dan Nguyen @ New York City, under Creative Commons license.