Here's how similarly both chains view the problem. On February 26, Macy's CFO Karen Hoguet said: "Candidly, it's getting so hard to know what's a store sale and what's a mobile sale and what's Internet. It's getting harder to figure out the lines between them." On March 11, Dick's CEO Edward Stack said: "We are making this reporting change because, as we build out our omni-channel platform, it is becoming apparent that the traditional sales channels are overlapping with the digital space and that providing comp sales on a combined basis will be more meaningful."
But by "combined" Stack means that online numbers will be explicitly broken out. "We will continue to provide the size of the E-Commerce business as a percentage of total sales," he said. Stack gave the example that E-Commerce for this quarter was 8.6 percent of total sales, which placed online sales at about $155 million for the quarter.
As Stack stressed through an analysts call, that result reflected an impressive 54.2 percent increase over the identical quarter a year ago.
One other interesting twist cropped up during the call. An analyst asked if much of the online sales increases were coming from areas where there aren't any stores, on the rationale that when shoppers want something from a national chain and there are no local stores, a Web sale would seem logical. Stack said the results were "mixed," and then added, "As we open stores in new markets, our E-Commerce penetration goes up pretty dramatically."
That's yet another indication of the symbiotic relationship between stores and sites. From an E-Commerce perspective, stores are these nice billboards for online. That's why E-Commerce in communities that have never seen a store will likely be weak. If shoppers are open to going online, there's no great reason to not go the Amazon route. No loyalty has been generated, unless the shopper happens to be a transplant from an area where the chain's stores do exist.
Pier 1 Imports (NYSE: PIR) toyed with this a couple of years ago, discovering that it could get E-Commerce mileage in towns without its stores. But that was when it had to shut down a store. That meant it had an audience of local loyal shoppers, who suddenly couldn't get to the stores to buy their favorite stuff. It's very different from a community that never had a store.