Credit: Mimi Phan
About 10 years ago the women’s clothing company Talbots was going through a rough period of declining sales and store closures. The company was losing market share and customer loyalty, Talbots chief operating officer Patrick Walsh said.
Despite this turbulence and dire predictions about the state of retail, the company rebounded. Today it has 550 stores across North America and more than $1 billion in annual sales, Walsh said at a recent talk at MIT Sloan.
Founded in 1947 in Hingham, Massachusetts as a catalog retailer, Talbots has long relied on an omnichannel model — an approach that blends sales in stores, by phone, online, and on mobile apps and social media platforms into one seamless experience. The company was purchased in 2012 by private equity firm Sycamore Partners.
Today its omnichannel strategy includes doubling down on existing strategies, like mailed catalogs, along with developing technology for customers to switch easily between shopping online and visiting stores.
In-store sales at Talbots are relatively flat, Walsh said. Direct business, in which the company sells directly to customers online or by phone, makes up a good portion of sales, he said. But areas of growth have been omnichannel sales, such as customers ordering items in stores and having them shipped to their homes.
Orders purchased online but fulfilled by stores are more than four times higher than they were three years ago, Walsh said. And stores are now processing more direct returns — such as when a customer returns a product they purchased online — than store returns, or when a customer purchases an item in the store and returns it to the store.
Here are two ways Talbots is managing its omnichannel strategy.
Putting stores at the center of a seamless experience
“Stores are the indispensable piece for a business like ours,” Walsh said, “because the customer’s omnichannel journey is very much intertwined in most instances with the store.”
Talbots is known for personal relationships between customers and employees and in-store styling advice, Walsh said. “We have a lot of best practices in stores, but the omnichannel challenge is how do you replicate it across all channels?” For example, the company works on perfecting online chat capabilities to add that service online.
In the past, Talbots had a red phone in stores that allowed customers to connect with a call center if a store was out of a product. Today the company is taking the friction out of mixing store and online orders, allowing customers to buy items both in the store and online with “one swipe of a credit card,” Walsh said. Meanwhile the “reserve in store” function has been replaced with a “buy online” option.
The goal is seamless service, said Jaap van Riel, senior vice president and chief information officer at Talbots. Customers don’t think the same way the businesses do about different channels, and might look at the catalog at home, order some things online, and return or buy more items in the store. “She weaves through all those channels because she’s thinking about the brand,” he said. “The customer thinks about the grand experience, and that is our challenge . . . to make one integrated frictionless experience.”
For example, Talbots introduced iPads in stores to help facilitate online shopping and orders. But the process was geared toward sales associates, and it was clumsy for shoppers. In-store screens were reimagined from a customer point of view, van Riel said. If a customer walks in liking a blue dress on page 14 of the catalog, “we should have a shoppable catalog . . . she comes in, goes to page 14, clicks on the blue dress, and then you put it in her fitting room,” he said.
Doubling down on catalogs
Like other companies, Talbots is invested in social media as a “number one” platform, Walsh said. Instagram has been a vehicle for introducing the brand to new customers, and the company’s existing clientele is mobile-savvy: about 40% of direct web traffic comes from mobile devices.
But the company is still invested in catalogs. Seven years ago, Talbots mailed less than half of the catalogs it mails today.
Walsh said getting rid of catalogs is a common thread among declining retailers like Victoria’s Secret and J. Crew. Victoria’s Secret eliminated its catalog in 2016. The company saw sales declines into last year. (Sycamore Partners, which owns Talbots, announced a deal to purchase a 55% stake in Victoria’s Secret on Feb. 20, the day of Walsh and van Riel’s talk at MIT.)
Talbots went the other way. “That catalog is a really important part of how you connect with customers and drive them through the omni landscape,” Walsh said. The catalog has also been a “great customer acquisition strategy for us,” he added. Talbots uses the catalog to reach lookalike customers — people with a similar profile to existing customers.
