As Amazon continues to heap pressure on retailers by shifting customer expectations concerning fulfillment and pricing, department stores may be suffering more than anyone. Many retailers have responded by leveraging off-price subsidiaries to acquire new, value-oriented customers attracted by the prospect of finding bargains on luxury items formerly stocked at full-price stores. Essentially, this represents a reversion to a tactic department stores know best: getting customers into stores.
Tactically, off-price subsidiaries of department stores don’t need to offer direct-to-consumer (DTC) e-commerce to succeed, as evidenced by the continued success of off-price retailers like Ross. However, these retailers must leverage digital assets to drive potential customers to stores. For example, Bloomingdale’s Outlet and Macy’s Backstage use their homepages to advertise store-specific discounts.
In addition, 29% of off-price offshoots in L2’s study ask site visitors to select a favorite store location, allowing them to send newly acquired and loyal customers targeted alerts about location-specific promotions. By prompting site visitors to sign up for email and text alerts, off-price offshoots can stay top of mind when acquiring new customers. Only a third of brands in L2’s analysis employ this touch point, suggesting there is substantial room for growth.