Three things Retailers can do Today, to prepare for the Customer of Tomorrow
The Retail Industry has changed. The last five years have more greatly impacted the industry as a whole, than all the changes across the last fifty. This year alone, as we previously reported in our article “The Retail Apocalypse”, more than 6300 stores will be closing before the end of the calendar year, and many iconic chains have gone bankrupt, laid-off tens of thousands, and are beginning to impact the traditional malls across the country.
Amazon and E-Commerce has risen to record highs, consumers are changing, with almost 68% of all consumers belonging to Generation X, Xennial, Millennial and Generation Z demographics, and mobile and social usage is fastly approaching complete saturation.
Yet amid all the change and chaos, there are a few beacons of light. Success stories that show that Brick-and-Mortar Retail is not dying, but rather changing, evolving. In order to survive the coming changes, there are a number of strategies and tactics Retailers can take in order to strengthen their core, and build a flexible, yet stable base.
1 – Click-and-Collect aka BOPIS:
This is not a new concept, but rather an intrinsic strategy Retailers need to take advantage of. Buy Online Pickup In-Store is also an area where many Retailers fail, both with technology, execution and customer satisfaction. In order to seamlessly merge the Online and Offline worlds of commerce, and to increase your In-store foot traffic, your systems (ERP, OMS, POS, WMS) need to be integrated in real-time. Inventory accuracy needs to be 95%+ and by far the best way to achieve this in a dynamic environment like a store is via RFID tagging all items, however this is a large expense for the ROI. The best way to increase BOPIS participation with consumers is to incentivize BOPIS purchases, charge for E-Commerce shipping orders and offer an order discount for BOPIS. This achieves several areas of success.
- This reduces the cost of shipping direct to the customer, an area growing quarterly
- Increases In-Store foot traffic and additional sales (BOPIS pickups generally result in an additional 25% higher sales)
- Leverages store inventory, and takes the pressure off of the increasingly active distribution centers.
- Combats online Giants like Amazon, by offering fast and local order fulfillment
- Preserves gross-margin on revenue
2 – Mobile-first:
There is a vast difference between being a mobile-first and a mobile-friendly retailer. Mobile-friendly refers to companies which utilize a mobile responsive web design, meaning the desktop experience translates well to a mobile device; while Mobile-first strategies refer to how a customer’s journey on a mobile device is planned on a mobile website/mobile app, and making sure it is translated in reverse onto a desktop.
Mobile devices are used by 9 out of 10 of the largest population segment (Gen X to Gen Z), and is quickly approaching total ubiquity. In 2016, of all the 211 million Americans who shopped online, 64% of them (136 million) made a purchase via a mobile device, and that number is expected to grow to 68% by the end of 2017. Forrester also predicts that US E-Commerce will grow to 459 Billion this year (12.9% of total Retail Sales), so that is a large potential mobile commerce revenue, probably exceeding 40% of E-Commerce sales this year alone.
In order to adopt a mobile-first strategy, retailers need to rethink their mobile browsing experience by creating an incredibly user-friendly design; large touch targets, simplified menus and navigation. This can be accomplished in a mobile browser, but there is also an added bonus to native mobile shopping apps, which are known to boost conversion and spending. Currently, according a Shopgate study, 85% of Retailers have launched a mobile-friendly website, only 22% have launched a mobile app.
Integrate this mobile app in-store for added bonuses via beacon technology, geo-fencing, in-store discounts with scan-able barcodes, and you begin to tap the potential of Mobile Commerce online and off.
3 – Data Analytics, AI & Chatbots:
It has become clear over the last few years, that one thing Amazon does correctly is to be able to use their immense amount of web data to ensure that their customer is understood, and that their needs and wants are met. Advanced analytics and Artificial Intelligence are helping Retailers to understand their customer needs, and how to better serve them. By employing machine learning online, your company is able to glean insights into the habits and tastes of their consumers, which can then be utilized to better the online experience, improve the product selection, pricing and availability by area, and to improve the personalized marketing efforts that consumers want, and get from Amazon.
While AI may be a stretch for most retailers currently, as far as deep machine learning, however BI (Business Intelligence) tools and analytics can and are being employed for the same purpose, and can give your organization a look into the who, the what, the when, the where and the why. Many retailers are using other forms of AI in the coming years, such as Chatbots on their websites to lower the cost of customer service and to improve the speed of customer satisfaction, and the hot-topic this year, shopping via voice on devices like the Amazon Echo, Google Smart-home, etc.
It is no secret that times are tough for Retailers, and unfortunately many won’t see the end of the next decade unless they make concerted efforts to adapt and evolve as the consumer has done.
There is no single remedy or strategy that will work for any particular retailer and only time will tell if the strategy is sound for your model of business; for example, BOPIS may not be a feasible strategy if your organization sells large pieces of machinery or furniture, but may be perfect if your organization sells clothes, books, or electronics.
At Advantage2Retail, we have been helping to guide and assist Retailers and Distributors for well over a decade, to become stronger, faster and better versions of themselves. Helping to optimize systems and processes in order to facilitate increased efficiencies, lower costs and pave the way to higher revenues. Please visit our website to learn all the Services and Partner Solutions A2R can offer to help your organization in the interim, and last beyond the next decade.