BOSTON (MainStreet) -- The debate among shoppers this year, as it has been for a few holiday seasons, is whether they find their bargains in-store on Black Friday or online during Cyber Monday.
Fiona Dias, once executive vice president for
and now chief strategy officer for
-- a membership club offering free shipping and other perks in conjunction with online purchases for many top retailers -- tackled five questions about the shift toward online shopping.
With more shoppers going online, how will this holiday season shape the retail battleground?
Can Cyber Monday overtake Black Friday?
Dias sees a "phenomenal move to shopping online," but perhaps not with the momentum needed to overtake Black Friday just yet.
In surveys, consumers are claiming they will do as much as one-third of their shopping online, but she is skeptical.
"They may or may not do that, even though there are large numbers that say they are going to," she says. "The big question is what is driving people out of stores and onto Web sites?"
"It is a tough economy. Clearly people are seeking value," she adds. "It is much easier to get a better deal and fair prices online. I think the continuing woe of the economy actually helps online. The second trend is the penetration of mobile devices. It is so much higher this year than prior years and the quality of devices is much better. There is no comparison between an iPad and an iPhone in terms of ease of shopping on a bigger device, and the bandwidth is so much better ... It's a gorgeous device. Catalog companies, which we all thought were dead, are doing somersaults because of the beautiful photography and creativity you can have on a tablet device that, quite frankly, you couldn't do on a Web site."
Can mobile devices hurt in-store sales?
"As people go into stores they are relying on their mobile devices as a way to ensure that they are not paying too much," Dias says. "That's going to suck even more business out of stores."
Dias says that retailers "for the first time have really acknowledged that threat" and she rattles off a list of stores that, in recent days, have said they are going to price match in their stores to online retailers. Among them are
Bed, Bath & Beyond
"I think it is because they recognized that if they refuse to match an online competitor they can just watch the customers go 'click, click, bye,'" she says.
Will there be a big winner this season?
"I think the prize for me goes to
," Dias says. "Nordstrom has always had this reputation for excellent customer service, but the model was always one of some really nice person in the store who would hold your hand while you went to the dressing room and brought you six blue shirts until you found the exact blue shirt you wanted. The model was very people-centric, relationship centric and store-centric."
In the past 18 months, she has seen the store lead the way in being "neutral," in other words: "If the customer shops here great, and if they shop online great."
"They have made the inventory completely mobile," Dias says. "Nordstrom has built a supply chain so that no matter where the customer shows up, the product can be shipped from anywhere. They've broken the barriers of a store wall and they are able to take all of their inventory
store by store and use it to fill customer orders. They have a magnificent supply chain."
The retailer is also testing a new same-day delivery service where, for $10, online orders placed before noon can be delivered by 6 p.m. that same day.
"About a month ago they took the gloves off and they decided they were going to offer free shipping for any customer no matter how big or small the order is," Dias adds. "If you only buy a $7 pair of socks, they will still ship it to you for free. Retailers have been leery about doing that because they want you to come to their stores. In some ways they penalize you by making you pay for shipping. Nordstrom has just decided they are going to make that barrier go away. Their retail brethren are gnashing their teeth, wondering if they should do the same thing, but Nordstrom clearly has a lead on them now."
Can small businesses challenge big-box dominance?
Dias says she'd love to see online shopping as a "great equalizer" that puts big retailers and small businesses on a level field that's not yet even close to being reality.
"It does matter if you are a physical store retailer with a great footprint," she says. "Even in the online world, scale matters. You've got to have warehouses all over the country so you can get product to the customer quickly. You also need to have a Web site that is state of the art."
Dias says that consumer expectations for an online shopping experience have grown more sophisticated.
"The little guys are actually getting very challenged because a $1 million- or $10 million-a-year retailer is being held to the same standards as Nordstrom or
. For the little guys, really the only way they can survive is to carve out a niche -- a product assortment that, for whatever reason, the big guys don't want to carry."
What about returns and exchanges?
Having conquered consumer concerns about security and fast shipping, the next big hurdle is how to handle product returns.
"Returns have always been a nightmare," Dias says. "If you get something you don't like, you have had to pay shipping to return something you didn't like. That really sucks."
Shipping services (including her own) and companies such as
are setting a standard with free returns. It is something retailers will have to start seriously considering in terms of ease and cost, Dias says.
"It takes away the sense customers have that they don't want to buy online because if they don't like it, returning it is a pain in the neck," she says.
-- Written by Joe Mont in Boston.
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