E-commerce isn't easy...or cheap to build. But it's not optional either anymore in modern retailing. ... [+]
Another week, another retailer jumpstarting its e-commerce business. Another week, another retailer shutting down its e-commerce business.
Are At Home and Christmas Tree Shops operating on the same retail planet? Some days you just never know.
This week, At Home, which has had its own struggles in both its stores and its stock price, announced it was rethinking its digital approach and would ramp up e-commerce efforts with the goal of a fully functioning presence by 2022. For those of you calendar-challenged, that’s more than three years away.
At Home has said the cost of establishing an e-commerce business would be prohibitive as it continues to build out its physical footprint. Many of its products tend to be large—furniture, room-size rugs, outdoor items like patio sets and barbecues—making the logistics complicated. That said, At Home operates huge stores that could be used as distribution centers, much as big discounters like Walmart and grocery chains have done, eliminating the need for a separate network of DCs.
In the meantime, Christmas Tree Shops, a division of the equally troubled Bed Bath & Beyond that, despite its name, is really an off-pricer, said on its website that it has discontinued online sales and that its site would only be used for informational purposes to drive shoppers to its stores.
“This fun store adventure is at the heart of who we are,” a statement on its frequently asked questions page states, “and the thrill you feel when you find one of those treasures is not easy to replicate on a website. That's why you are no longer (sic) be able to make purchases through our website. Instead, our website is an exciting destination for you to enjoy sneak peeks, previews of new and exclusive products and tons of ideas to inspire you.”
It’s not known when this change was made; it was discovered and reported on this week by Chain Store Age, an online retail newsletter.
Christmas Tree Shops, is not the only retailer in the off-price space to have its issues with online but it is believed to be the first to end an existing e-commerce business. The TJX divisions TJ Maxx and Marshalls have nascent operations online, coming after the parent company bought Sierra Trading several years ago for its e-commerce capabilities. Other brands like HomeGoods still do not sell online. The very nature of off-price retailing, with fast merchandise turns and limited assortments sometimes specialized down to the store level, makes online a difficult dynamic to execute.
But Christmas Tree is not the first established national retailer to back off e-commerce and therein lies a lesson it perhaps should be studying. A decade ago, when it was going through one of its numerous downturns, Pier 1 eliminated its online business completely, saying it needed to focus all its resources on its physical stores. This, of course, turned out to be a terrible decision as it walked away from the fastest growing part of the retail business and when it re-entered e-commerce years later it basically had to start from scratch all over again. Pier 1 has many problems, but its weak online business is near the top of the list.
That lesson apparently was not looked at very closely by At Home either, which has stayed away from the online business as it rapidly expanded its physical footprint. When it finally arrives to the online world, it will be very, very late to the party.
The other poster child for how not to do e-commerce has to be the Ron Johnson-era JC Penney. This was a retailer that was early to online and, based on its expertise in direct-to-consumer sales through its catalog, JC Penney was a leader in the channel in the early days of the business. But under Johnson—somewhat incongruously given his Apple background—online was deemphasized and nearly a decade later, JC Penney has still not caught up to where it had been originally.
Nobody ever said building an online business was easy, particularly for legacy brands rooted in the physical world. It requires big investments, a lot of patience and the ability to take a leap of faith that it’s going to work.
But in the retailing world today, e-commerce has become table stakes and if you’re not in it, you are very much out of it.
