Wednesday, April 18, 2007
Macy’s New $100 Million Online Store
byOnline retailing continues growing at a rapid pace. That’s why Macy’s recently announced plans to spend $100 million for a new online store. Considering their goal is $1 billion in Web sales in the next year alone, the online expenditure looks like a savvy investment.
According to the MSNBC story link above, Macy’s online sales were $450 million in 2005 and $620 million last year. That represents 38 percent year-over-year online revenue growth. The article also quotes Jim Sluzewsk from Macy’s, “Research has certainly demonstrated that a customer who shops both online and in stores is a much larger customer.” It is clear the Macy’s online strategy is meant to increase the average total sales from this important dual-shopper demographic.
Another reason more retailers are devoting increased marketing budgets for their online presence is the importance of online shopping to offline purchases. An Internet Retailer story about a new Accenture study reveals the following strategic facts:
• 69% of consumers do research online before making a major purchase
• 68% compare purchase prices online before making a purchase in a brick & mortar store
• 58% of consumers use the Internet to find out where to make a purchase in a physical store
Based on the Accenture statistics, investing in an improved online presence not only increases Web-based revenues, but also has a profound effect for sales in a retail chain’s physical stores.
