How Omnichannel Technology Protects Market Share; Bed Bath and Beyond Struggles With Integration
This week, ratings agency Fitch presents its take on the omnichannel future, and Bed Bath & Beyond struggles with a common side-effect of growth in ecommerce – cannibalization of its instore sales. On the publishing front, Neiman Lab has put together an excellent roundup that points the way toward three of the biggest trends we’ll be seeing in 2017: an increasing emphasis on subscriptions, less excitement about third-party platforms, and of course, more of everything mobile. Happy New Year!
Fitch Says These Retailers Are Giving Market Share Away
A recent report from Fitch Ratings divides the retail landscape into two categories: retailers that qualify as best in class and those that the report describes as “market share donors.” The dividing line between the two? Investment in omnichannel marketing. “Those that find success have invested in the omni-channel model and have differentiated their products and customer service to draw customers in,” says the report.
Fitch expects retail sales to grow between three and four percent next year, but in-store sales are expected to grow only about one percent. Instead, growth will be online. Among retailers, Fitch sees Dollar Tree, Levi Strauss, and Coach as being on “a positive trajectory,” while Fitch says Sears, Gymboree, and Abercrombie & Fitch will continue to be more challenged.
Online Efforts at Bed Bath and Beyond May Be Cannibalizing In-Store Sales
Retailer Bed Bath & Beyond is coming up against a dilemma common to many publishers and retailers: Its online sales are growing nicely, but at the expense of its traditional offering. In its recent third-quarter conference call, the company said same-store e-commerce sales rose 20%, but physical same-store sales fell “in the low single digit range,” according to Retail Dive.
Part of the problem seems to be that Bed Bath & Beyond’s strategy and offerings are particularly susceptible to digital competition. The company’s retail stores stock an overwhelming variety of inventory, making it difficult to find any particular item. Worse, many of those items have become commoditized, and the store itself doesn’t provide an aspirational experience. If all you need is a vegetable peeler, it’s easier to go to smaller store or to buy it online.
In response, Bed Bath & Beyond recently issued its first print catalog and purchased furniture retailer One Kings Lane. It also bought Personalization Mall in an attempt to differentiate its offerings. But this seems like just the sort of problem that omnichannel personalization was designed to solve. Rather than confront consumers with a tsunami of products, Bed Bath & Beyond needs to figure out how to get the right one to the right person at the right time – both in-store and online. That means knowing who their instore buyers are, who’s buying online and and who’s using the app, and then making sure every single customer gets the appropriate experience, no matter which — or how many– channel they use.
Making Sense of a Wild Year in Publishing
If you’ve acquired a case of whiplash after trying to follow all the news about media companies over the past year, you’re not alone. Luckily Ken Doctor, of Neiman Lab, has put together a great explainer that puts the year into perspective and points the way toward 2017.
Among the highlights:
- More subscriptions. A few publishers, such as the New York Times, The Financial Times, and The Wall Street Journal, have made substantial progress in lessening their dependence on advertising and moving toward a more subscription-based model. Admittedly, this comes in the face of some stunning ad-revenue losses: The New York Times saw an 18% print ad drop; McClatchey 17%, and Gannett 15%.
- Mobile matters. Compared to other publishers, those that specialize in business news have been slower to feel the impact of mobile. This year, the importance of mobile became impossible to ignore. On weekdays, readers spend about the same amount of time reading news on desktops and laptops as they do on mobile, but on weekends, mobile accounts for 66% of digital news reading. Bloomberg Media says its total unique mobile visitors were up 92% in 2016.
- The best platform may be your own. Publishers have been mostly willing to experiment with third-party sites that promise to introduce them to new audiences, but they need to see results. For a fair number, that isn’t happening. The Financial Times is no longer putting stories on Facebook’s Instant Articles, and the New York Times contributes just a few a day. The FT hasn’t been super-impressed with Apple News, either, with John Slade, the FT’s commercial director, calling the results “very limited.”