What are the disadvantages of also treating retail stores as warehouses? Is this a good solution for competing with Amazon.com?
A key to satisfying retail customers is to carry products they want. However, Macy's used to find that although an item was out of stock online, it had plenty of stock in the physical stores and ended up marking it down to clear the item out. Not anymore. Macy's is now turning almost 300 of its 800-plus stores into combination retail outlets and online warehouses to combat competitors such as Amazon.com, which has an extensive network of warehouses located near high-population areas. New technology dynamically updates the status of all items in every store, so if an online shopper wants an item, and it exists in any Macy's store, the store will ship the item to the consumer. In-store shoppers can also have an item shipped to them from another store if it's out of stock where they are shopping. Items not selling well in stores are shifted to the online site, where they can be sold at full price rather than marked down. Integrated Internet and physical stores are called "omnichannels." Nordstrom and Toys R Us have used omnichannels for a few years and realize fewer markdowns, improved margins, and faster inventory turnover.