Crate and Barrel works to balance online and offline sales

Retailer talks about tech and sales balance at NRF’s Big Show

Even though more and more people are shopping online, executives at Crate and Barrel say they're not ready to give up on brick-and-mortar stores.

What the retailer has realized is that it's not about replacing offline sales with online, or about mobile apps replacing a website. It's about using each to support the others.

Call it the new retail balance.

"If you cut stores, you're ecommerce sales will go down," Michael Relich, COO of Crate and Barrel, said in an interview. "They're tied inextricably.... It's about making it work together."

Relich will be speaking about the "age of radical change" at the National Retail Federation's annual Big Show being held this week in New York City.

"What technology is driving is merging the online world with the brick-and-mortar world," he said. "It's not one specific tech that is changing things. The way we want to shop is changing. I know a millennial who buys her groceries online and I asked her why and she said she doesn't want to schlep them upstairs to her apartment."

Between younger consumers who take a whole different approach to shopping, the advance of artificial intelligence, in-store sensors, mobile apps and augmented reality (AR), there's a lot of change coming at retailers -- and at their IT departments.

It would be easy, for instance, to focus on changing a store's floor space with AR and sensors. AR could help customers virtually try on various outfits in different colors, styles and patterns without having to change into a single new outfit.

The problem, though, is if a retailer invests too much on a single technology - like augmented reality - it could lose site of the need to balance every sales channel a store has.

"We're focused on accommodating customers and having omni-channel capabilities," said Relich. "By tying it together, we can collect more data about our customers. We can tie browsing behavior together with transactional behavior."

A brick-and-mortar store, for example, might be able to carry the same pillow in two different colors. Online, though, it might be able to sell that same pillow in eight different colors.

The combination of a website, mobile app and brick-and-mortar stores means a customer can go into a store to actually touch and hold the pillows to see if they like the feel of them. Then they can go online to order them in the color they want or to avoid having to carry them around a mall or out to the car.

Other customers will go online to compare Crate and Barrel's merchandise to its competitors' and then go to the store to see it in person before making a decision.

At Crate and Barrel, online sales account for half of sales.

"Before, it was just figuring out how to get [customers] in the store," said Relich. "Now you have multi-channels and customers begin in one channel and then complete the sale in another channel or they go back and forth.... It all goes hand in hand."

Crate and Barrel, like other major retailers, is looking at how big data, the cloud and analytics can help better understand customers, what products they need to buy and when to buy them and where to warehouse the merchandise.

"Customers are getting much more demanding," said Relich. "A lot of retailers are organized by the channel. They have an online group and a store group. Customers don't care about that. They want to be able to interact with you in any channel."

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