Hudson's Bay will be adding an array of digital marketing and development initiatives to its e-commerce business as it seeks to bolster sales online and offer luxury consumers more conveniences.
The company reported weaker-than-expected 2014 earnings last week but said it will be paying more attention to digital strategy for future growth.
"We want to capture [digital growth] and grow it as quickly as we can. Rather than go with the normal cadence of growth, we are making an attempt to grab market share and grab volume and grab [operating profit] earlier than we otherwise would," said CEO Richard Baker, during a conference call with analysts.
Baker said customers who shop at HBC in store and online spend three to four times more money than customers who shop in just one channel. He also said 70 percent of purchases are influenced by shoppers viewing the company's online websites first before entering a store.
"It's a stunning figure and something we're paying a lot of attention to," he said.
Baker didn't go into details about what digital upgrades were in store, but the company could join a growing number of retailers offering ship-to-store or click-and-collect service. Baker noted that the option for customers to return or exchange their online orders in-store has become a convenience that is "advantageous and profitable." Most recently, Saks Fifth Avenue modified its shipping policy to offer free shipping on all orders regardless of purchase total. Saks sent out an email to subscribers introducing the new promotion as, "Free shipping, every day, every order." The company also shared the news via its social media channels.
He said Hudson's Bay has an advantage in that customers who are unhappy with online purchases can return them to one of 90 locations, a convenience that is "advantageous and profitable" for the retailer.
Net profit in the period ended Feb. 1 fell to $29.1 million from $86.8 million a year ago. The company blamed the slump on administrative expenses which rose $434 million to $795 million in the period due to costs related to the acquisition of Saks and higher costs associated with the retailer's strategic growth initiatives.
Hudson's Bay owns and operates retail stores throughout Canada and the United States, including Hudson's Bay, Home Outfitters, Lord & Taylor, Saks Fifth Avenue and two Zellers liquidation stores.
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