Amid a retail climate in which well-known retailers such as GameStop Corp., J.C. Penney Co. Inc., and Crocs Inc. are closing stores, Carter’s Inc. is taking the opposite approach.
The children’s apparel retailer has opened 29 net new stores so far in fiscal 2017, with plans to continue opening stores in the fourth quarter and next year, says Greg Fogelsong, executive vice president, retail, marketing and growth initiatives at Carter’s, No. 105 in the Internet Retailer 2017 Top 500.
“Our philosophy is centered on omnichannel,” he says. “Everything we do is in the context of driving online sales and that includes the in-store experience we’re delivering to customers.”
The reason is simple: Roughly 75% of the retailer and manufacturer’s direct-to-consumer customers only shop in the retailer’s stores. But consumers who shop online and offline have a customer lifetime value that’s roughly twice that of those who only shop one channel. Carter’s is in the midst of a major push to drive consumers to shop both online and offline by rolling out services such as free shipping for online orders delivered to a store, a loyalty program that connects consumers’ online and offline actions across the retailer’s three brands—Carter’s, OshKosh B’gosh and Skip Hop—and a revamped mobile app that rolled out last week that seeks to serve consumers who are in store, as well as those shopping online.
“If we can find ways to bring the channels together, that will pay off financially for our business,” Fogelsong says. “It also creates a better experience for our customers.”
Take the retailer’s free shipping to stores program. About 15% of online shoppers in the third quarter used the service. Among those consumers, roughly 30% made an additional purchase when they came into a store to pick up their purchase.
Carter’s also recently began offering in-store shoppers free shipping if the item they’re looking for is only sold online (roughly 30% of its overall SKUs are only sold online) or out of stock. While it is too early to share results, Fogelsong says the program has seen a “great response” and Carter’s is “interested to see how big it gets.”
Similarly, the Rewarding Moments loyalty program aims to link the retailer’s online and offline operations. The loyalty program, which is integrated within the retailer’s app, ties together a shopper’s online and offline purchases across Carter’s three brands. Shoppers can redeem points in stores and online.
The app also seeks to bridge the online/offline divide by offering users in-store offers, a store locator and the ability to scan items in a store to access prices, product reviews and additional information. Consumers can also scan items and build an online shopping cart, Fogelsong says, noting the retailer is “turning every store into an online showroom.”
While Carter’s is taking a holistic approach to retail, its omnichannel efforts are aimed in part at bolstering the retailer’s offline sales. Its U.S. retail sales rose 7.7% in the third quarter and e-commerce played a major role in that growth. The retailer’s third quarter comparable e-commerce sales (excluding Skip Hop, which it bought earlier this year) grew 20.9%, while its comparable stores sales fell 3.2%.
E-commerce is the retailer’s fastest-growing channel, in the United States and globally. U.S. e-commerce sales are expected to jump roughly 25% this year, making up a little more than a quarter of its overall direct-to-consumer retail sales. And it expects its international online sales to rise 30% this year.