News Feature | December 18, 2013

Bon-Ton Turning Business Around …With The Help Of Macy's Strategies

Source: Retail Solutions Online
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By Anna Rose Welch, Director, Cell & Gene Collaborative
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Company branches out with new strategy to meet mobile-savvy shoe shoppers’ needs

This holiday season, Bon-Ton has come out of the woodwork to try and wrest away customers from competitor JC Penney. Since 2011 when the company hired Brendan L. Hoffman as the new CEO, the company has been doing its best draw in younger customers, cut down on excess inventory, and improve its e-commerce business — quite often using strategies perfected by Macy’s. So far, the company seems pretty optimistic that it’s going to succeed following an improved third quarter. CEO Hoffman says, “As we look forward to the fourth quarter in the holiday season, we have a renewed sense of optimism that was absent until recently. While we recognize that we are operating in a choppy environment, we think we are well prepared for the springboard that we believe this holiday season will be.”

This holiday season, there’s been an increasing amount of chatter about the competition between retailers and about what all the holiday promotions might do to profit margins. Indeed, the cutthroat nature of this year’s holiday shopping stretch could leave stores stuck with a bunch of unsold inventory, causing higher markdowns and, in turn, hurting margins. However, for Bon-Ton, which has taken to localizing merchandise in the style of Macy’s, inventory has already become leaner by 5 percent versus last year. Through the use of field-office merchants, the company is now better equipped to pinpoint and deal specifically with regional needs. Not to mention that CEO Hoffman, like Macy’s CEO Terry Lundgren, has been making his presence known in a number of stores in the Bon-Ton chain, where he has been talking personally with managers. 

Besides working with managers in bricks-and-mortar stores, Hoffman has been focusing on the company’s online presence, which is one of the reasons the company hired him in the first place. Following the third quarter, Hoffman reported that, “The world retail congress ranked our website No.2 in U.S. department stores in their quarterly survey, with the focus being on user experience.” He also reported that the third quarter revealed that Bon-Ton’s e-commerce business has been growing steadily because of traffic initiatives and a “broader merchandise assortment.” Hoffman is most likely referencing the addition of more upscale offerings, including Coach, Michael Kors, and Ralph Lauren merchandise, which — big surprise — can also be found at Macy’s. This “arsenal of status resources” is helping the company “compete on equal footing with [its] peer group.” It should also be helping the retailer gain some footing with the millennial generation, which, judging from their fondness of technology, could help drive increases in the retailer’s e-commerce business.

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However, the company is proving it can be independent from Macy’s through its mobile commerce strategy. In late November, the company announced the launch of Thinaire RF:NFC technology in 30 of its stores’ shoe departments. Now, customers can use their mobile phones to determine if the shoes on display are in stock in their size and preferred color at that specific store — all by tapping their phones on the decals on shoes or in-store signage. If that store doesn’t have the right shoe, the RF:NFC technology can guide the shoppers to the nearest Bon-Ton that does or to the mobile commerce site to purchase the shoe right away. Technology initiatives like this one are helping to bridge the gap between these stores and their smart-phone reliant customers. As CMO Patrick Meyer says, shopping at Bon-Ton “has never been so easy.”

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