Nordstrom, Inc. (NYSE:JWN) is also in touch with recent Internet trends. For example, it capitalized on the popularity of Pinterest by marking its most-pinned products with “P” tags at 13 of its 248 brick-and-mortar locations in a testing phase that will end in July. With 4.5 million followers on Pinterest, Nordstrom is the most popular department store on the social networking site, and it is using this lead to gather information regarding the popularity of items in certain geographic regions. The company intends to use pinned items to realign its inventory for different regions.
In addition, Nordstrom, Inc. (NYSE:JWN) has also invested in Wantful, a gift suggestion site that uses personal data about the gift recipient to customize product recommendations, to create The Nordstrom Gift Collection by Wantful. This could help strengthen Nordstrom, Inc. (NYSE:JWN)’s dedication to creating a more personalized online shopping experience for its customers.
J.C. Penney
Whereas Urban Outfitters and Nordstrom represent companies that have made staying in touch with customers, both offline and online, a top priority, ailing retailer J.C. Penney Company, Inc. (NYSE:JCP) represents the polar opposite.
Many retailers are able to pump out gains in online sales despite reporting falling brick-and-mortar numbers. Yet J.C. Penney Company, Inc. (NYSE:JCP) was able to achieve neither in fiscal 2012, reporting total sales that declined 24.8% year-over-year to $12.98 billion and same-store sales that fell 25.2%. E-commerce sales plunged 32.0% to $1.02 billion, and its share of total sales fell from 8.7% to 7.8%.
As this meltdown was happening last year, former CEO Ron Johnson managed to alienate customers by eliminating limited-time sales, confuse them with completely rearranged store layouts and turn them off with a minimalist re-branding effort. Controversial and sappy ad campaigns did little to save the ailing retailer as Johnson burned through more cash than the company could generate to make his new “JCP” a reality.
By focusing so much on brick-and-mortar stores, Johnson neglected its e-commerce sales. He notably stated, “The digital environment you can change quickly. The physical environment takes time.” But as we have seen with Nordstrom, it can’t change quickly as a mere afterthought–it’s a big investment that requires a lot of strategizing, time and effort.
By the time Mike Ullman was hired back as the company’s CEO, J.C. Penney Company, Inc. (NYSE:JCP) was an irreparable mess. Last quarter, total revenue declined 16.4%, its loss doubled to $348 million, and same-store sales declined 16.6%. E-commerce sales, which Ullman did not discuss, plunged 30%.
The Foolish Bottom Line
For retailers, e-commerce and m-commerce are vital strategies that should not been taken lightly. There are far too many retailers that dismiss mobile apps as an afterthought, creating poorly designed apps that sully their reputations and inadvertently turn away mobile shoppers.
Over the next few years, companies such as Urban Outfitters, Inc. (NASDAQ:URBN) and Nordstrom, Inc. (NYSE:JWN) that have invested wisely in creating well-designed apps that connect with their customers will reap the rewards, while aging dinosaurs that have neglected e-commerce completely, like J.C. Penney Company, Inc. (NYSE:JCP), will crumble.
The article When Dinosaurs Can’t Evolve, They Go Extinct originally appeared on Fool.com and is written by Leo Sun.
Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Urban Outfitters. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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