COVID-19 Drives 3 Key Omnichannel Capabilities
The COVID-19 crisis is proving to be a catalyst for change across all dimensions of retail. Some of this transformation was already underway for some specialty brands. They were on a path to building a more direct-to-consumer (D-to-C) business. However, what the pandemic ultimately underscores for them and others is that retail can’t go back to the models of before. The shift to D-to-C compounded by COVID is accelerating the adoption of omnichannel retailing. And it's exactly where the industry needs to be headed.
Here are three of the important trends coming out of COVID-19 that will define the new retail industry.
Brands will hold less inventory in their stores as they reopen — in most cases 30 percent less. Not only because stores will be smaller in square footage, but also because there will be proper and precise inventory data control.
Precise inventory is the foundation for all omnichannel use cases, from store fulfillment to endless aisle. It also enables a retailer to respond quickly and efficiently to local events, which will be common as store performances change. Knowing with accuracy where inventory is in the enterprise is critical to being able to respond to localized demand, getting customers what they want, when they want it.
Optimized inventory management will also allow for better forecasting and planning. Consumer behaviors will continue to evolve. Trends across markets will be different; some consumers will exercise caution and heed advice from local officials, while others will be more willing to get out. With RFID and serialized inventory, retailers will know exactly what's happening down to the item level. They will be able to align supply to demand.
E-commerce may be driving the lion’s share of revenue for brands right now, but physical stores will always be an important part of the retail equation. There's particular value in leveraging stores as fulfillment centers, especially if websites serve as the primary sales channel going forward.
Stores can deliver efficiency, speed and convenience when used to fulfill online orders, especially if the brand has integrated its web and store inventory. This will allow the brand to ship from a store closest to the consumer instead of from a far-away distribution center. It also enables buy online, pick up in-store (BOPIS) and curbside pickup — table stakes that brands will need to offer to protect those customers who remain wary of shopping in person. These capabilities can help mitigate the high costs of shipping across transit zones and get orders to customers faster.
In the case where the store is the point of sale in the future, an endless aisle transaction will be a standard operating procedure. It will be more normal that something isn’t available, and that items are shipped from other locations to the customer’s home. Having a simple and efficient way to “save the sale” can help store revenues increase by up to 20 percent. It also allows the store to become a highly curated and personalized experience venue. Consumers will measure their trips based on service and will attribute their loyalty accordingly.
Store associates have always been an intangible asset to retailers, whether they knew it or not. As retailers look to find efficiencies in their human capital in the wake of the pandemic, an omnichannel associate will come to life. It’s the end of four wall economics. Associates will now be highly efficient and multipurpose employees while working in-store and from home.
Remote selling makes it possible for the customer to have a knowledgeable brand expert in their living room. So long as the stylist has access to product and inventory information, as well as a “look” into the customer’s closet, they can deliver the high-touch, intimate selling experience that's synonymous with in-store shopping. And because they’re selling from home, they can unlock fulfillment from across the enterprise unbeknownst to the customer.
Finally, remote selling makes it easy for customers to pay in a touchless and secure way. Shoppers will do what it takes to avoid swiping and signing for a long time to come. Even more likely, they’ll only utilize digital and mobile payment methods. Thus, it becomes paramount to offer customers a shopping experience that promotes social distancing and contactless payment. Retail brands can lean on this approach year-round, but even more so right now as store traffic remains low.
Stephan Schambach is the founder and CEO of NewStore, an omnichannel retail platform.
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