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Brick-and-mortar retailers find ways to stay equal to the online holiday competition

Nina Solis, of Huntington, gets in some early

Nina Solis, of Huntington, gets in some early holiday shopping on Nov. 16, 2014, at specialty retailer, rue21, in the Westfield South Shore mall in Bay Shore. Credit: Linda Rosier

This holiday shopping season, retailers are most wary of shoppers like Mahta Namdar of Plainview.

Namdar, 25, used to be a regular at malls and big-box stores. But in recent years, she said, the convenience of online shopping has often trumped the delight of a random bargain find at a store. This year, Namdar, a college math teacher, said she expects to spend more money on presents and will be buying most of those gifts online.

"Going to the mall used to be such a fun experience, but I feel these days it's not anymore," she said. "It's so crowded, usually they don't have the product you want, and you leave disappointed."

Namdar's sentiments are indicative of the preferences of many shoppers on Long Island and across the country as more turn to online shopping, which is a growing concern among retailers trying to increase in-store sales.

Holiday spending this season is estimated to rise to $616.9 billion, a 4.1 percent increase from 2013, according to the National Retail Federation, a trade association that represents retailers in the United States and abroad. Many big-box stores are stepping up their game to capture that spending in the store — where customers are more likely to spend extra and make impulse purchases — by improving the holiday shopping experience.

"It's more important this year than ever," said Nicole Larrauri, a managing director at The EGC Group, a Melville-based digital marketing firm. "The customer experience will just make or break the future of the big box and a customer shopping with that big box."

Reinforcing retailers

The Internet remains a popular choice for holiday shopping this year, according to financial and consulting firm Deloitte's annual holiday retail survey. Nevertheless, most customers — 52 percent — will still spend more of their gift budgets in a store.

To build on that foot traffic, retailers will need to be creative and conscientious. Deloitte noted that long lines, traffic and lack of desirable merchandise are in-store customers' top three holiday shopping frustrations.

But customers will reward retailers who make an effort to improve the shopping experience and environment. A recent survey found that 86 percent of shoppers are willing to pay more for a better customer service experience.

"Having that in-store experience that differentiates you from other retailers will . . . be an advantage," said Jonathan Rothman, U.S. retail analyst at Deloitte.

Retailers are already accepting the challenge. Walmart and Target are implementing longer hours, hiring more holiday salespeople and introducing digital store maps and price matching.

Retailers are also offering store-only merchandise and in-store events, said Natalie Kotlyar, a retail analyst at Chicago-based BDO USA, a tax and financial consultancy. High-end department stores have also held music- and food-related events.

Other enticements to draw customers away from their computers and into stores include bounce-back coupons — distributed at checkout and redeemable on future visits — and free in-store pickup of items ordered online that are not in stock at stores, Kotlyar said.

Shoppers who do make the trek out to shop say they tend to spend more than when buying online. Nina Solis, 43, of Huntington, said she doesn't want to miss out on a good deal when she witnesses other shoppers being excited by bargains they've scored.

"I saw everyone else getting it and thought, 'That has to be an amazing deal,' so I bought it," Solis said. "I did a lot of impulse shopping last year."

Solis, a legal assistant, said she won't do that this year and plans to cut back on spending since her children are growing up.

Impulse buying initiative

According to the National Retail Federation, purchases during November and December can account for as much as 40 percent of a retailer's annual sales. During the holidays, retailers also rely on impulse purchases, said David Cohen, business development manager at Tensator, a Bay Shore-based consultancy specializing in customer experience for retail stores.

"Having one buyer add one additional thing in their cart . . . can mean a larger bottom line for the year," he said.

Retailers still make a majority of their annual sales — on average about 85 percent — in the physical shop, said Maryam Morse, a retail practice leader at Philadelphia-based Hay Group. But the Internet is still a concern because shoppers who buy online tend to do so at online-only boutiques or giants like Amazon, not the websites of traditional retailers.

"It's almost as if it's a race," said Kotlyar. "There's a fixed budget, and it's a race among all the retailers on who will get more of that fixed budget and as soon as possible."

For Lauri Ketzlick, 49, of East Islip, stores have plenty of room for improvement.

"If you want customers, you need to make them want to come into the stores," she said. "If you only get a store appealing for Black Friday, then it's not worth it."

Ketzlick, an assistant manager at a Hess gas station, said that she will likely increase her holiday budget this year and that she prefers to shop in stores because there are no surprises in the merchandise purchased and she does not have to pay for shipping. But she added that she is sometimes frustrated by mishaps in customer service and workers' confusion about in-store deals.

Digital maps and more

Joey Sherman-Hessel, 49, of East Northport, is the opposite. The former handbag designer said she has started drifting online more and more to buy her gifts, and this year hopes to keep her holiday budget the same as last year's.

"The bargains are . . . better" online, she said. "It's much more comfortable sitting home and shopping, especially during the holiday season."

Sherman-Hessel said she is an active shopper throughout the year, but actually shops less during the holiday season because she is so put off by trying to find parking at a store and then a specific product inside.

Ironically, retailers have a digital-based strategy to lure reluctant shoppers like Sherman-Hessel and Namdar who prefer online shopping. Toys R Us and Walmart both announced a new feature that allows customers to view a digital map of their local stores and see where items are located before heading out to shop. Sears announced its Reserve It service, which allows shoppers who find items at the retailer's website to put them on hold at a local store so they can try them on.

No matter what the shopping season holds, some shoppers acknowledge that it's hard to ignore the holiday spirit.

"There's a different feeling in the air when you're shopping before the holidays," Sherman-Hessel said. "It makes you feel young, and like a kid again."

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