How to Prepare Your Organization for the Future of Brick-and-Mortar
The past two years have shown us the value of preparation. For the first time in a long time, the average American has had to consider that everything can change at the drop of a dime. Despite new and unforeseen challenges in 2020 and 2021, preparation for the unexpected is nothing new for retailers.
As a successful retailer, you’ve had to account for every possible contingency. By insulating your organization from supply chain disruptions, work stoppages, and PR disasters, you project calm in virtually any crisis. The fact is, though, that each year brings a new set of fresh and pressing challenges. 2022 will undoubtedly throw curveballs that you couldn't have predicted.
What all retail organizations must do is prepare for the predictable — or at least the semi-predictable. Consumers are evolving, but they’re changing in several ways that we can measure. The global retail ecosystem continues to feel pangs of uncertainty, but we have some idea of how the pandemic will affect our organizations. We can make many invaluable preparations based on trends and hazards that we're aware of.
Though the opening bell of 2022 has already rung, there’s still time to prepare. Here’s how.
Essential Preparation for Retailers in 2022
Many heavyweight retailers took 2020 on the chin. In 2021, many of those retailers rebounded in a major way. The key difference for many of them: being able to prepare for previously unknown challenges. Intelligent, proactive preparation will again be a major differentiator between retailers in 2022.
Preparation No. 1: Brace for supply challenges using innovative technology.
Technology is “transforming” the retail supply chain, and it couldn’t come at a more opportune time. KPMG expects logistics breakdowns, production delays, and labor uncertainty to continue plaguing supply chains well into 2022. When it comes to mitigating these challenges, smart retailers are focusing on what they can control — including inventory management.
Most retailers may be familiar with RFID, LiFi, warehouse management systems (WMS), and other time-tested tech for inventory management. Retailers are increasingly embracing newer technologies like artificial intelligence (AI) to assist their inventory management teams. This technology can monitor the flow of goods across the supply chain, helping predict demand changes and related product shortages.
Though the use of AI for inventory management remains limited in retail, 2022 could be a year of significant adoption. Considering the forecast of supply chain headaches, retailers may want to lay their AI foundations sooner than later.
Preparation No. 2: Embrace the 'retail-tainment' model for shoppers who want more than just goods and services.
Per PwC, 73 percent of consumers value experience highly when choosing where to shop. Only price and product quality are more important. When price and products are negligible across retailers, the in-store experience may serve as the tiebreaker.
Some retailers are looking to retail-tainment as a frontier for novel in-store experiences. Just as it sounds, retail-tainment means infusing elements of entertainment — like virtual reality (VR) headsets or popular culture — into the traditional retail experience. Tiffany & Co. has converted two of its stores into cafes, a playful nod at the film "Breakfast at Tiffany’s." Nike dedicated an entire store, its House of Innovation, to exploring the possibilities of VR for its apparel brand.
Attractions that retailers may have once dismissed as gimmicks may soon be necessities. As younger, highly stimulated generations age into their buying years, the need for entertaining stores will only grow. Now is past the time for brainstorming.
Preparation No. 3: Be ready to deliver products through multiple channels, faster.
With services like Amazon Prime offering two-day shipping in many locales, brick-and-mortar retailers must continue to quicken fulfillment times. Same-day pickup options may need to become two-hour pickup, and eventually one-hour pickup.
Click-and-collect experiences rose by nearly 107 percent between 2019 and 2020, and adoption continued into 2021. By offering your customers fulfillment curbside, at a drive-thru window, in-store, and through other delivery channels, you’ll meet every customer where they’re most comfortable.
Preparation No. 4: Experiment with novel in-store experiences (with help from the latest technologies) to find out what works.
In line with the retail-tainment idea, feel free to test various technologies and concepts within your stores. In 2020, U.K.-based food retailer M&S began using handheld scanners to check customers out while they were in line, significantly cutting wait times. M&S customers can now scan their own items while they shop using the retailer's app, skipping the line altogether.
As customers migrate further towards convenience and lasting retail experiences, now is the time to test which new tools do — or don’t — work for your organization.
Preparation No. 5: Incentivize and retain competent employees (before they even consider leaving your organization).
The average turnover rate in retail is an astounding 60 percent. Though the attrition problem may be somewhat structural, dissatisfied retail employees report poor training, overly long shifts, and mediocre pay. This isn’t the case for every retail employee, but the turnover problem appears to be widespread.
Retailers that prioritize employee training, communication and retention stand to gain a serious competitive advantage. There’s the sheer economic cost of replacing an employee — about one-fifth of their annual wage, depending on the position. Beyond dollars and cents, though, what's the value of having experienced, cohesive, dependable employees throughout your organization?
As the retail climate continues to pose unidentifiable challenges, investment in known quantities — e.g., your valued employees — can provide strong return on investment.
The Future is Bright — for Those Who Evolve
Though retail demand has remained strong through most of the pandemic, the past couple years have taught us to take nothing for granted. To survive and thrive as retailers, we must always be preparing.
This means maintaining your best staffers through achievable incentives, constant communication, and empowerment. It means implementing new technology in-store as you lay the groundwork for the retail-tainment era. It also means upgrading your supply chain management software and beefing up your omnichannel infrastructure.
Bobby Marmahat is the CEO of Raydiant, a digital signage and in-store experience solutions provider.
Bobby Marhamat is the CEO of Raydiant Screen Signage, a digital signage provider that helps businesses turn their TVs into interactive signs that drive sales, improve the in-store experience, and reinforce brand messaging. Prior to joining Raydiant, Bobby served as the COO of Revel Systems where he worked on the front lines with over 25,000 brick and mortar retailers. Bobby has held leadership positions including CEO, CRO, and VP of Sales at companies such as Highfive, Limos.com, EVO2, Verizon Wireless, LookSmart, ServerPlex Networks, and Sprint/Nextel. When Bobby's not spending his time thinking about the future of brick and mortar retail, you can find him traveling, reading, or tending to his vegetable garden.