uploads///Online NRF

Department Stores’ Online Channels: Major Role in Holiday Season


Dec. 22 2016, Published 1:27 p.m. ET

Strong online sales

The comfort of online digital shopping is resulting in online retailers such as Amazon (AMZN) giving tough competition to department stores and traditional brick and mortar retailers. According to the NRF (National Retail Federation), online and other non-store sales rose 15.3% on a year-over-year basis in November. That marks the first half of the holiday shopping season, which includes November and December.

Article continues below advertisement

Preferred shopping channel

According to preliminary data from the NRF’s 2016 holiday season survey conducted by Prosper Insights & Analytics, 56.6% of shoppers surveyed chose department stores as their preferred shopping destination. That was followed closely by 56.5% who prefer online shopping. Discount stores ranked as the third preferred shopping destination by 55.7% of shoppers.

Initiatives to boost online sales

Department stores continue to enhance their online infrastructures to enhance the consumer shopping experience. In a fiscal 3Q16 conference call, Nordstrom’s (JWN) co-president Erik B. Nordstrom said the company had redesigned its homepage and improved its navigation. Department stores such as Macy’s (M) and Kohl’s (KSS) already have features such as buy-online-pick-up-in-store and same-day delivery to attract more consumers.

JCPenney, which didn’t offer a buy-online-pick-up-in-store feature in the 2015 holiday season, hopes to benefit this year since that feature is now available. In a fiscal 3Q16 conference call, JCPenney’s CEO (chief executive officer) Marvin Ellison mentioned the roll-out of its mobile device, called Mobile Warrior. It will provide a mobile checkout functionality that will help customers collect their buy-online-pickup-in-store orders without waiting in line. For this holiday season, JCPenney has added more than 150,000 new items to its online merchandise, including appliances, electronics, and fitness equipment.

The NRF’s 2016 holiday survey showed that 93.0% of surveyed shoppers would use a free shipping offer, 47.0% would use features such as buy-online-pickup-in-store, 17.0% were eager to take advantage of faster shipping, and 10.0% would use a same-day delivery feature.

In the next part of our series, we’ll look at some of the initiatives department stores are taking to boost holiday sales.


More From Market Realist