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Express delivery on digital is on trend

Stuart Lauchlan Profile picture for user slauchlan November 30, 2017
US fashion retailer Express had a to-do list around omni-channel a year ago. The results from its latest progress report are encouraging.

It’s been over a year since we last took a look at the omni-channel shift underway at US fashion retailer Express. At the time, CEO David Kornberg had a number of issues to address, including a need to boost e-commerce revenue, re-invigorate customer loyalty and overhaul brand awareness.

As 2017 draws to a close, there are encouraging signs that these challenges are being met. The e-commerce story is a particularly strong one, with a 23% year-on-year rise in the most recent quarter, compared to 15% for the comparable period in 2016. For the year to date, online sales now account for over a quarter (26%) of total revenues or around $500 million - and that’s just the start, reckons Kornberg:

At this pace, we expect e-commerce sales will exceed 40% penetration of our total sales within the next five years. We see this as a meaningful opportunity for the Express brand and our continued relevance well into the future, while recognizing and representing a significant transformation in how we engage with our customs and support their diverse shopping preferences.

That brings the focus onto the omni-channel strategy and again there are signs of success at achieving the right balance between direct-to-consumer initiatives and the optimal offline real estate. Kornberg states:

Our omni-channel strategy hinges on us having the right location and brand exposure to serve our customers when, where and how they choose to shop. We will continue to take a holistic approach to managing our store footprint, recognizing a future where demand across channels is more balanced.

One of the big programs here is the expansion of ship-from-store to 150 outlets around the US. Kornberg explains:

We are pleased with how this has demonstrated our ability to drive incremental sales. In addition, we are also gaining important learning regarding the opportunity to drive inventory productivity and reduce markdown. These include utilizing 'ship from store' to clear through ‘e-commerce exclusive’ items returned to store and redirecting the fulfillment of e-commerce demand to stores to leverage store inventory.

We are also optimistic about the potential of' ’Buy Online, Pick Up in Store', which benefits customers by providing them quicker access to the products and benefits us by driving additional store traffic and another opportunity to engage. We launched the pilot in a small number of stores and are pleased with the early results. We plan to expand this capability in 2018.

Social thinking

One statistic that Kornberg aired last year was illustrative of the importance of cementing customer loyalty:

Our data shows that our fully-enrolled Express Next customers shop with us four times more often than the non-Next customer.

That meant getting the Next loyaly program into better shape via a phased re-launch across the year was a key priority. This is working, says Kornberg:

Customer signups are up significantly year-over-year and have already achieved our 2017 targets. We believe that this positions us well to drive improved results for the remainder of the Holiday season and into 2018. This continues to be an important and ongoing initiative for us.

The loyalty program is complemented by more innovative social media outreach and digital marketing. Kornberg elaborates:

We’ve increased our content creation capabilities and expanded our partnerships with fashion influences. Our efforts are beginning to drive positive results, which we expect will continue to in the coming year…In terms of new customers coming from social media, we are [seeing that], but I think we’re also really getting it through influences and through the fashion storytelling that we are doing on social media.

We do it in many different ways across different platforms. So if you follow us on Snapchat, you’ll see one different view of stories and storytelling and content and films that we put on there and then you will see it communicating in the very different way on Instagram through the images that we put out there and we shoot and we also communicate with the customers. So we look at it really between social media, we look at it through the fashion influences that we have and the cost of product categories where we can really drive the most new customers.

We also continue to invest in digital transformation and personalization, which enables us to target customers with a greater precession through our digital marketing, as well as on our website and mobile app. We are seeing positive results in the areas where we are using it and we’ll expand our efforts in 2018.

My take

A positive example of the potential for growth and renewal that can come from a considered omni-channel strategy that’s being executed well.

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