Tablets and smartphones are driving the retail economy. Deloitte recently released a study indicating that mobile devices influenced 19% of the more than $3 trillion in total in-store sales in 2013. Including desktop computers, digital devices influenced half of all in-store purchases.
So, what are retailers doing about it? Well, according to Deloitte, many brick-and-mortar stores are letting dollars slip through their fingers, providing online retailers with a clear path to increased market share.
And it doesn’t have to be this way. Kasey Lobaugh, the person in charge of the Deloitte study found that online sales tend to be higher where a retailer has a physical presence. It turns out that conversion rates — a key driver of retail sales growth — substantially improve when a digital device is used before and during a visit to a physical location.
The integration of a retailer’s online and in-store sales is the key to success, and mobile devices will play a vital role in that success. Here are three retail stocks who are doing it right when it comes to mobile and stand to benefit most from this consumer trend.
Retail Stocks for Mobile — Williams-Sonoma (WSM)
You can’t have a discussion about e-commerce and the retail industry without including Williams-Sonoma (WSM).
In 2013, WSM reported that its e-commerce revenues were $1.95 billion, growing at a compounded annual rate of 18% over the past three years. More importantly those revenues represent 48% of its overall sales. While this shift in the retail landscape has hurt some firms, WSMs multichannel approach to business over the past decade has delivered huge returns for those owning WSM stock.
WSM might not get the accolades that some retailers do for its mobile initiatives, but they’ve been enough to move the needle every year. And at the end of the day that’s what’s most important.
Retail Stocks for Mobile — Nordstrom (JWN)
When it comes to department stores, nobody does it quite like Nordstrom (JWN). You tend to think of it as a high-touch business where in-store service is the difference maker. However, its e-commerce initiatives have proven to be very successful, growing 30% per quarter and representing a third of its overall revenue. That’s great news for JWN stock.
It’s no wonder, then, that Nordstrom plans to spend $1.2 billion over the next five years to boost its technology, with mobile playing a big part in that. Ben Davis states in his Econsultancy blog post Jan. 16 that JWN has built a mobile app that “does the basics efficiently.” An app that’s clean and easy to look at is a big deal and should help bring JWN more customers.
In the long term, the latest revisions to its mobile app will play big dividends for JWN stock.
Retail Stocks for Mobile — CVS Caremark (CVS)
One of the best retailer stocks of any kind when it comes to implementing a mobile marketing strategy is CVS Caremark (CVS), the second-largest drug store in America. According to Forbes, CVS has the most popular mobile app in retail. Utilizing an efficient, highly functional user experience, CVS helps customers quickly take care of refills. By making the process effortless a new customer could become a regular leading to additional revenue generation which is a good thing for CVS stock.
CVS has a popular app as well as one of the top-ranked mobile sites according to The Search Agency, a Los Angeles-based internet marketing specialist. The Search Agency evaluated the top 100 multichannel retailers in America, and CVS came in with the third-highest score behind only Toys “R” Us and REI. Interestingly, companies like GAP (GPS) and Urban Outfitters (URBN), who you might expect to do well, ranked far down the list.
If you believe, as I do, that mobile marketing is critical to a retailer’s success, then you shouldn’t have any problem owning CVS stock. When it comes to retail stocks, CVS wins with mobile.
Retail Stocks for Mobile – Bottom Line
Recent studies prove that brick-and-mortar retailers can only thrive if they have a strong internet presence. As more people use smartphones here in the U.S. and retailers get better at using mobile apps to educate those consumers, revenues online and off will continue to grow.
The three retail stocks mentioned above all are doing what needs to be done when it comes to mobile marketing. If they stay the course, you will be rewarded.
As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.