David Jones’ e-commerce offering has been doing even worse than its bricks-and-mortar business, but IBM wants to change all that.
David Jones, suffering from dwindling sales and the huge overheads associated with maintaining multiple department stores, has been frantically searching for a life raft. Following on from the closure of its large Newcastle store and an underperforming e-commerce site, the brand has now turned to IBM‘s ‘Smarter Commerce’ solution for help.
IBM has struck a deal with David Jones (for an undisclosed amount) in order to develop and integrate the brand’s web design, online application development, social media, analytics and reporting. It will also provide back-end capabilities for orders, inventory management and sales fulfilment. That is to say: IBM will now provide a holistic online retail solution for the shopping giant. This investment into its e-commerce channel will be funded by David Jones’ $80M capital expenditure budget.
“IBM will develop an end-to-end multi-channel e-commerce platform for David Jones that will enable it to provide customers with a seamless customer experience across its physical stores, its online stores and mobile devices,” says Ian Wong, Associate Partner for IBM Global Business Services,
This is expected to be a positive change for David Jones, as its online store was found to bring in just 0.2% of its overall sales in its fiscal 2011.
“A recent study by IBM, which looked at consumer expectations of retailers, showed that more than 78% of Australian consumers expect to be able to use technology as a fundamental part of their shopping experience,” says Wong.
“The cross-channel platform is therefore a bold new step by David Jones to meet and surpass the demands of the ‘empowered consumer’,” he says.
The timing of the partnership could not have been better, as analysts have recently commented that David Jones is fortunate that no major dominant online retailer has yet emerged in Australia. With IBM’s assistance, David Jones may now be able to solidify a position in the online market by providing a true cross-channel shopping experience.
“Customers will not only have the ability to browse and buy, but also pick-up and return items through the channel of their choice, including their mobile phones, online or at a physical store,” says Wong.
If IBM is able to reinvigorate David Jones’ online offering soon enough, it will not only be a coup for the well-known retail brand, but it will also be the most significant change to the Australian online retail landscape in 2012 thus far.