Online sales are not the answer to retailers’ foot traffic woes

by Infor Retail July 28, 2016 Converged Commerce

By Kevin Sterneckert, SVP Predictix

Over the past few years, retail foot traffic has continued to decline—and the overall industry assumption has been that online retail is making up for it. Unfortunately, that hasn’t proven to be the case, as prominent retailers like Neiman Marcus and many others have reported huge drops in sales and earnings.

The U.S. Census Bureau reported that while e-commerce sales were up 3.7% during the first quarter of 2016, overall retail sales were still down .2%. While that might not sound like much, for a big retailer that normally sees $1 billion in annual sales, that means a loss of $2 million—which would certainly be a big deal to the company’s investors. In fact, some retailers’ overall sales are declining at a rate that’s greater than their increase in online sales.

So, if e-commerce alone isn’t the answer, what is? Unfortunately, one single solution won’t fix the problem. But the right combination of strategies and modern retail technologies can make up for lost sales. And if retailers want to stay in the game, now is the time. Here’s a look at some of the strategies leading retailers are using to get ahead of the competition:

Order management and fulfillment

Amazon has created an industry standard and, more importantly, a customer expectation, for order management and fulfillment. This means retailers need to ensure they offer a wide variety of options such as same-day delivery, online purchasing, in-store pickup, and ship to/from store. But simply offering these options isn’t enough; retailers needs make sure these processes are as efficient as possible by optimizing their delivery networks, distribution centers, and store picking procedures using predictive analytics and machine learning.

Customer experience

At the end of the day, shoppers aren’t robots, they’re human beings with emotions, budgets and busy schedules. If you don’t make them happy and deliver the products they need, when they need them, they can simply go across the street or pick up a smart phone and make the purchase from your competitor. Pricing and promotion tools, an inventory management solution, and assortment planning can help ensure merchandise is always in stock, at the right place to keep your shoppers happy and away from the competition.


Retail ads have encouraged shoppers to hurry to stores for deals and promotions since the late 19th century. But since shopping no longer requires going to a brick-and-mortar store, retailers need to stop selling what’s in their stores and start selling their brands.

But the advertiser’s job doesn’t stop once the consumer is in the store or on the retailer’s website. Retailers must continue to market to customers throughout their shopper journey to encourage impulse purchases. According to an A.T. Kearney report, 40% of in-store shoppers and 25% of online shoppers report making impulse buys.

While it won’t be easy and will require the right technology, retailers need to figure out not only how to transfer sales from the physical space to digital, but also prepare properly for that shift—otherwise their brands will suffer and they’ll be upside-down in a marketplace that simply won’t allow for their recovery.