August seems to have been a month for department stores to expand their omnichannel capabilities. J.C. Penney appointed new omnichannel executives, while Macy’s and Bloomingdale’s expanded same-day delivery service and Neiman Marcus filed an IPO highlighting its commitment to merging e-commerce and physical stores. Digital now influences 75% of luxury spending at the retailer, according to the filing.

These developments point to a major trend. L2’s Digital IQ Index: Department Stores finds that retailers have made significant progress this year in terms of omnichannel capabilities. Only 16% of Department Stores displayed real-time inventory on product pages in 2013. Now, that number has risen to 61%. Similarly, the percentage of retailers enabling customers to buy products online and pick them up in-store has risen from 34% to 50%.

Percentage of Brands Utilizing Omnichannel

However, the study also shows significant variation between regions when it comes to the implementation of “seamless” online-to-offline capabilities. While 95% of North American brands let customers return items purchased online in-store, only 43% support in-store pickup. Their European counterparts are far ahead, with 78% supporting in-store pickup, led by U.K. brands such as Debenhams. In contrast, only one-third of APAC Department Store brands have implemented this capability.

Online Purchase, In-Store Follow-Up

As this suggests, there is a major disconnect between the seamless experience desired by consumers and the reality. While 72% of retailers claim to have “seamless” online-to-offline capabilities, 30% of surveyed consumers say cross-channel handoffs are in need of the most improvement. As department stores continue investing in omnichannel, however, the shopping experience will likely become increasingly smooth.



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