The Future of Brick-and-Mortar Retail: Contactless, But Experience-Full, Part 2
Retail has undergone seismic shifts since the outbreak of COVID-19, when we radically changed the way we behave outside our homes — and whether we ever even leave our homes at all. Brick-and mortar retailers have had to radically restructure their operations, from click-and-collect options to refocusing on online shopping. As states gradually open back up and some shoppers begin to feel more comfortable venturing out, a key aspect of any retailer’s survival will be the salesforce consumers encounter when they do go into the store.
For years, retailers have talked about how important their associates are to their success. Some retailers, to be sure, have taken actions showing they really believe their associates are key to building and maintaining personal relationships with regular customers, and the benefit of their giving the customer one-on-one tailored purchase advice. However, most retailers have just talked.
It’s now time for all retailers to turn their rhetoric into concrete action that supports store associates as they bring to life the “in-store-at-home” experience for customers or streamline customers’ in-store shopping. To bring the digital experience to life by adding a human element to the customer journey — which will largely become digitized and contactless post-pandemic — retailers should use existing talent (i.e., those who are already familiar with the company’s product, processes and culture). Associates could turn today’s touchless online shopping into an experience that's far more compelling to the customer while increasing revenue for the retailer through upselling and instilling customer satisfaction.
Online shopping consultations can help customers choose the product that’s right for them. This could take the form of an online car salesperson advising a customer that the model they chose might not be big enough for their growing family, and directing them to another option that better fits their needs. Or it might look like shopping assistance for the elderly, who will likely have to continue their daily routines with extreme caution until we have a reliable COVID-19 vaccine. As the elderly are often not as comfortable with technology, they might need extra guidance: imagine an 85-year-old first-time online shopper. He wants to purchase gardening equipment, and navigates himself to the video chat button on a hardware store’s website, where he's greeted by a tech-savvy college student. She is able to point him to not only the items he wants, but a selection of plants he could order. He pays for everything online with his credit card and arranges for next-day delivery, guided through the process by the online associate. This is a triple win — the store has gained a new online customer, the senior was able to get everything he wanted and then some delivered to his door, and he now has improved self-confidence for future digital interactions.
Besides improving the online experience for customers, associates using digital technology could make in-store shopping contactless and experience-full for customers when they arrive in-store. Most retailers now offer some form of touchless shopping for their customers, but often it's sterile and lacks important aspects of the pre-COVID customer-retailer relationship. Without associates positioned to enrich the experience, customers go into a brick-and-mortar store, get their items, check out, talk to no one, and leave. They do everything as quickly as possible, without getting close to anyone — probably wishing they were invisible and hoping they're safe. This formula won't build customer loyalty, and therefore is a losing one.
Consumer demand for a safer in-store experience makes customers more responsive to nudging toward new ways of shopping that both enhance customer safety and help retailers improve their businesses. Apparel and beauty customers can be nudged to make appointment-driven visits for immediate personal service. Small-format stores (e.g., specialty grocers) could provide digital information about current wait times and store capacity to urge customers to shop during low-traffic periods — e.g., early morning, just before closing, or on certain days of the week — so customers can get in and out faster, while encountering fewer shoppers.
Retraining Associates to Excel at BOPIS
Regardless of which post-pandemic scenario plays out, consumers will maintain a sustained demand for buy online, pick up in-store (BOPIS). To meet this demand, retailers must increase the speed and accuracy of their pickup options by enhancing their in-store supply chain with batch picking of orders and grouping of high-velocity items. These will become table stakes for post-pandemic success.
In-Store Order Picking Must Become More Efficient
Today’s inefficient order-picking process usually includes a single associate fulfilling one customer order at a time by traveling throughout the entire store to find products. The future of click-and-collect uses a team of associates picking products for a batch of orders in their assigned areas or departments, yielding significant time efficiencies. Then, back-of-the-store associates can package the items into the correct individual customer orders.
Improving the in-store supply chain with better batch picking and the use of technology isn't the only way to more efficiently handle order fulfillment. Some retailers are turning to different models that enable them to move the fulfillment out of the customer store entirely. Whole Foods, for example, fulfills some orders in dark stores — i.e., stores once opened to customers but now converted to pure fulfillment centers. Rather than converting stores, Albertsons is creating fulfillment-only facilities where associates handle customer orders. Furthermore, Kroger, in partnership with Ocado, has opened a number of automatic fulfillment centers where the work is done by robots.
In addition, reorganizing all high-velocity products — e.g., hand sanitizer, toilet paper — in one location of the store will further increase the speed and efficiency of fulfilling the majority of orders. Alongside these steps, investing in smart-shelf technology could both improve order fulfillment and enhance the in-store customer experience. This technology, available today, provides data to associates’ smartphones that pinpoints specific items’ locations in-store as well as stock levels. Likewise, consumers could use this technology to locate the shelves containing products on their shopping lists and then use it to map an efficient, streamlined route through the store. They also could use it to scan the shelf’s QR code for information found on a product’s label, eliminating the need to pick up a product that may have been touched by someone else.
Consumers’ preferences for how they shop and what they buy have shifted rapidly during the COVID-19 crisis, as have their priorities for when they shop and how they receive their purchased merchandise. These shifts provide a perspective of what post-pandemic shopping might look like. And they offer retailers opportunities to give customers experience-full shopping that's enjoyable, safe, contactless, streamlined, and meets their specific requirements.
The evolving retail environment caused by COVID-19 requires that retailers transform their in-store supply chains and operating models to become more flexible, sensitive and resilient. Although made more urgent by the pandemic, this idea isn't new. Retailers have long been aware that they need to provide contactless shopping opportunities for their customers, and they have long talked about making this change. If retailers expect to get through the crisis intact and then succeed in the post-pandemic period, they must take action now. With new in-store operations management and digital efficiencies, coupled with a personalized, associate-driven touch, customers can enjoy safer, experience-full shopping, and retailers can employ their associates and other resources more thoughtfully and efficiently.
Suketu Gandhi is a partner in the Digital Transformation practice, Alanna Klassen Jamjoum is a specialist and vice president, Alex Fitzgerald is a principal, and Justin Pham is a manager in the consumer practice of Kearney, a global strategy and management consulting firm. They can be reached respectively at Suketu.Gandhi@kearney.com, Alanna.Klassen.Jamjoum@kearney.com, Alex.Fitzgerald@kearney.com and Justin.Pham@kearney.com. The authors would like to thank their colleague Michael Brown for his contributions to this article.