This week in eCommerce, big-box retailer Target suffered the consequences of their data breaches from 2013 and 2014. This security compromise reportedly cost the retailer $162 million, not including the ensuing class action lawsuits and reputation damage incurred by the corporation. A beacon technology pilot project is being rolled-out at three select Neiman Marcus locations in attempt to take advantage of Bluetooth Low Energy networking to secure what the business-world refers to as “low-hanging fruit” in-store by interconnecting physical, mobile, and digital in one shopping experience. Target makes our wrap-up twice this week, in attempt to remain competitive with eCommerce in an aggressive market that they lagged behind in initially, by lowering their minimum order value required to qualify for free shipping. Gap Inc.’s omnichannel portfolio implementations that cater to the best of both the online and physical worlds resulted in success for the fast-fashion retail. In a particularly volatile category, omnichannel strategy allowed Gap to achieve positive growth. For all the details from this week’s eCommerce newsmakers, read-on below!
Breaches Cost Target Big Time
Source: Tech Crunch
Retailers have unfortunately become the biggest target of data breaches, and Target is no different. In 2013 and 2014 Target was hit by big attacks resulting in a reported $162 million loss to the company. These attacks, that affected 70 million of the retailer’s customers, occurred between these two years were the result of hackers breaking into the company’s network to retrieve credit card information. The figures released today in Target’s Q4 reports showed $4 million earned in the quarter and $191 million gross expenses for the year. The cost from the attack does not include the estimated expenses from the lawsuits filed against the company following, and more importantly the cost of the company’s damaged reputation among consumers. Data security firm FireEye reports that attacks spiked in 2014 and took on average 200 days for retailers to address the issue. Thankfully for Target, it only took them 13 days to notice there was issue…
Hone in Your Shopping with Beacon Technology at Neiman Marcus
Source: Internet Retailer
We’ve been discussing the omnichannel potential of beacon technology for quite awhile now, and Neiman Marcus are not only embracing beacons, they’re using them in a way that’s slightly different to most retailers. At three different locations – Austin, TX, Walnut Creek, CA, and San Antonio – Neiman Marcus is piloting a project to notify shoppers of in store events. Using Bluetooth Low Energy , beacons places throughout the store will send push notifications to shoppers with the retailer’s app. These in-store events range from trunk shows, guest designers, book signings etc. Other stores have been using the technology to only push store promotions to customers. Using Aruba Networks beacon hardware and BestFit’s Proximity Development Kit, Neiman Marcus integrated its beacons with the Apple Passbook mobile wallet app. This low-hanging fruit was easy to implement, however the high-end retailer will continue to only test this project at these three locations before determining whether it makes sense to roll-out this new communication tool to other stores.
Target Ups the Ante
It’s a war-zone out there! The battle over eCommerce is heating up between retailers, and Target is taking steps to ensure it can remain competitive against corporations like Amazon and Wal-Mart. This week Target announced that they will be lowering their minimum order size to get free shipping. Customers now will have to order $25 worth of product to qualify for free shipping, down from the previous cost of $50. In comparison tot other retailers, the min order value at Amazon (excluding Prime) and Best Buy of $35. Target is trying to distance themselves from the role that industry professionals refer to as the “fast follower” where they typically latch-on to the strategies of others and now solidify themselves as a leader in eCommerce. Target recently upgraded the backend of their eCommerce sites, and according to experts is now on-par with some of the other bigger names. Their site actually had at one time been managed by Amazon in 2011, and Target realized a change was in order when the site crashed during the debut of their collaboration with the designer Missoni. Target was slow to play catch-up with eCommerce over the years but are realizing the value of being aggressive with their online strategies.
Bridging the Revenue Gap with Omnichannel
With increased competition among fast retailers (RIP Mexx, Jacob, et al.) Gap is doing surprisingly well despite it all. Positive growth, although small, is good news all-around for the company as fourth quarter sales increased 2% year over year. Gap did fall a little behind at 3%, in comparison to the 3.6% that the apparel and accessories industry grew, this is mainly due to the fact that the store still relies on store sales while the industry saw online sales soar. Gap did make significant improvements to its omnichannel portfolio by catering to the best of both worlds for its customers, emphasizing both its online and physical presence. During Q3 of fiscal 2014 Gap installed WiFi to 1000 of its stores, giving customers the ability to access their apps and website in-store while shopping. “Reserve in store” also greatly contributed to Gap’s omnichannel success, allowing customers to reserve an item they see online in-store to try on.