Seamless! Why this buzz word may save retailers
With the continued explosion of Internet shopping this holiday season, retailers need to stop thinking about consumers buying either online or in the stores.
It's now both.
"The channels are becoming blurred," former Saks boss Steve Sadove said on CNBC's "Squawk Box" on Friday. "People used to think the Internet is going to take over and stores are going away. Now what's happening is it's seamless. People want anytime, anywhere."
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Bon-Ton Stores CEO Brendan Hoffman echoed those sentiments. "We're trying to make it seamless. We don't really care how they shop, how they return, or how they engage with us."
While ramping up its website, Bon-Ton has kept its store count constant this year. "The website is clearly our fastest growing channel," said Hoffman, adding that he's tapping into his experience running neimanmarcus.com.
But as retailers strive for this "seamless" experience, mall owners can't just give up. "People still love going to a mall. One of the things that we have to learn is that it's not just about the product," Sadove said. "It's about the experience the consumers is getting."
Nobody knows that better than Steven Tanger, chief executive of Tanger Factory Outlet Centers.
"Consumers love to buy direct from the manufacturers. And we are the place where they can do that," he said. "It's a social experience. It's all about the lifestyle. We have restaurants and fountains and free Wi-Fi to entertain the nonshopping spouse."
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Mall expansion has been recently static, and Tanger sees opportunity in that trend. "There's only about 160 to 170 factory outlets in the entire country, compared to 1,100 regional malls."
"There's only about 70 million square feet of outlet space, compared to a billion square feet in regional malls," he continued. "We have a long runway of growth ahead of ourselves."
Tanger also said it's all about the brands. "If you look at some of the profits of our wonderful tenant partners like Coach and Michael Kors and Polo and Under Armour, you can go down the list. You'll see they're very profitable in the outlets and continue to grow there."
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Bon-Ton's Hoffman is also going after those desirable brands. "We just launched Ralph Lauren last month. We just launched Michael Kors and Coach a few months earlier."
As for the consumer, Hoffman said, "I think she's certainly feeling a little bit better than she was in the spring."
Sadove—who's also a current board member of J.C. Penney—wasn't as sanguine. "There's a concern and a malaise with the consumer."
"Even though unemployment is coming down, the job creation is a lot in the service sector where they're not as high wages," he continued. "People are looking for deals."
That's not a surprise to Matthew Shay, president of the National Retail Federation, because he's been monitoring what he called the two-track economic recovery. "There's that segment that's doing really well. There's that other segment of the population that doesn't feel so good about things."
So far that's translating into a rather tepid holiday shopping season.
The federation estimated sales fell by 2.7 percent during the full Thanksgiving weekend to $57.4 billion. The average shopper spent $407.02, off nearly 6 percent because of lower prices.