Mobile-commerce has the biggest potential to reach consumers. In the epic “app vs website” debate, department stores with higher digital IQ's have invested in both platforms. The majority of iOS apps offer social sharing, e-commerce and push notifications but less than half offer ratings and reviews, coupons and bar code scanners.
This indicates that while department stores are on the right track, they are not quite hitting the mark. L2 argues tablet optimised sites are the greatest missed opportunity.
Search engine visibility is the real test of a digital IQ. Some department stores are purchasing paid ads to increase their visibility and brand, while other department stores already have strong organic visibility, appearing on the first page of Google results.
Recent media reports suggest the implementation of Google's "mobilegeddon" is likely to lead to the 'disappearance' of retailers from Google if they do not have mobile enabled websites, reinforcing that this should be an area of considerable focus for challenged contenders.
Despite the challenged ratings, Australian department stores are making in-roads to better their digital footprint. Myer reported strong online sales growth in its recent results announcement and highlighted its intention to build “digital capability off the back of the Myer One loyalty program to accelerate omni-channel.”
DJ's new CEO Iain Nairn has commenced the implementation of a fresh approach with a digital focus, suggesting the current DJ systems are archaic. He plans to introduce the same retail systems that Country Road and Woolworths in South Africa successfully use.
It's interesting to note that while the Asian brick-and-mortar department stores are deemed 'Challenged' and 'Feeble', e-commerce platforms such as Alibaba, Gmarket and Rakuten are booming.
Alibaba controls approximately 80 per cent of China's online market and is one of the world's largest e-commerce players, rivalling the likes of Amazon and eBay. E-bay's Korean subsidiary Gmarket, estimates smartphone penetration rate stands at almost 74 percent. In 2014, Rakuten was ranked #17 on the Forbes 'The World's Most Innovative Companies'.
As the digital world keeps expanding, Australian department stores and their Asian counterparts need to be on their A-game to maintain relevant and viable businesses. The most successful international department stores have invested heavily in mobile online platforms, adopting digital competence to the department compartment.
James Stewart is a partner at Ferrier Hodgson.