Michelle is back for a three-part series on online versus brick and mortar retail in the fashion industry.

How does success sound to the fashion destinations we love? Is it the clink of our cash in their tills or the click of our mouse buttons that helps them stay afloat? What will they be hearing more of in the years to come? This three-part series will explore the answers to those questions, which aren’t as straight-forward as you might think!

Traditional brick and mortar stores have long been the bedrock of the global retail industry, and fashion was no exception. Present-day giants such as Nordstrom and Macy’s began life as standalone specialty shops that expanded to accommodate their growing customer bases. Physical stores are still key features of a typical retail business model, but the ascendance of online shopping and mobile technology has forced some retailers to reevaluate their strategies.

It’s a wise and lucrative decision. Online shopping is a well-entrenched economic driver, according to data from the U.S. Department of Commerce. Revenue from electronic retail business surged nearly 15 per cent to $165.4 billion in 2010, the department said. Analysts with eMarketer.com predict the trend of double-digit ecommerce growth will continue for at least the next three years, only starting to slow in 2015.

Most major retailers are well past the point of launching an online sales division, having run successful websites alongside their brick and mortar businesses for years. The current challenge stems from the need to integrate the two approaches – to find ways of keeping customers engaged by uniting traditional business approaches with modern innovations. For most retailers, technology will be the key to resolving this dilemma.

At last month’s Global Retailing Conference in Arizona, Macy’s Inc. chief executive Terry Lundgren made it clear his company planned to move forward by introducing elements of the online shopping experience into its physical stores. While delivering the conference’s keynote address, he identified mobile technology as the key innovation that will help bridge the two business approaches.

Products in Macy’s stores now feature Quick Response (QR) bar codes on some of its products. Customers can scan those codes with their phones and immediately access online content about the products. These include videos from designers explaining details of the item or brand they’re considering.

“I love the idea of using technology to bring the personalities of our designers to customers inside our stores,” Lundgren told the conference. “This is a perfect example of how we make the in-store experience reflect some of the benefits you get when you shop online.”

Mobile innovation is being put to a different use at Wal-Mart Stores Inc., though with the same goal in mind. Ecommerce vice-president Raul Vazquez told the conference the company is developing way-finding technology, which would allow customers to use their cell phones to identify where a product is located in the store.

Like Lundgren, Vazquez stressed the importance of reproducing the online experience in brick and mortar stores as much as possible, arguing the Internet has raised the bar for both customer service and satisfaction.

“Consumers today, when you ask them what their favorite retail experiences are, they list online companies,” he said. “One could argue it is a superior customer experience online.”

The internet has also become an increasingly crucial arena for corporate marketing efforts, Lundgren said, adding social media has provided unique opportunities for direct communication with its customers.

The Company used Facebook to run a successful contest, offering a $1 million makeover with Clinton Kelly to the lucky winner. Another initiative saw Macy’s releasing a video on YouTube, which featured Martha Stewart working her magic on a filthy fraternity house.

Such initiatives help expose customers to the Macy’s brand, Lundgren said, adding they don’t come cheap.

The company’s digital advertising budget grew from zero to $120 million in the past three years, he said, adding that sum will continue to rise for the foreseeable future.

“You can’t do just one new technology, you have to look at all the options and at the same time, focus on your brand and message,” Lundgren said. “The more we can make our stores as interesting as our online experiences, the more we are going to benefit in the future.”

If well-established online brands have to work to maintain their businesses, imagine the challenges for a company that hasn’t yet gained a toehold in the bustling ecommerce landscape! Next week, find out how one YouLookFab favourite brand intends to conquer the web.

In the meantime, let us know what you think. What do you look for in an in-store shopping experience? Do you like the idea of merging brick and mortar shopping with the online world, or do you want them to stay separate? Have you seen any of these or any other merging strategies in action?

Michelle McQuigge is a Toronto-based journalist working as a reporter and editor at The Canadian Press.  You can follow her on Twitter.