This article first appeared on MyCustomer.
At a time when retailers are looking for the next big thing to help them out of the difficulties they’re currently facing, it’s not surprising that some have been tempted to turn straight to surface changes – in-store gadgets, the latest VR/AR - anything to get customers through the door. While it’s important to offer the right kind of experience which sets you apart from the competition and encourages footfall, if you don’t tackle fundamental operational issues, you’re never going to meet those practical customer needs that are so often dealt with by just ordering online. As I explored in an earlier article, CX isn’t all about the customer – if your operations aren’t in order, they may visit once for the sparkling in-store experience, but they won’t be coming back.
Space – the final frontier
Currently, retailers have two options – they can see their physical retail space as an expensive problem, or they can see it as an asset. Those who take the former view are unlikely to be able to find a solution – it will always be a cost and so, in their view, always be a burden. On the other hand, those who take the latter view are in a much better position to repurpose their stores and leverage the advantages. Flexible fulfilment is the key to success in this area – customers need to know that, after having a stellar experience in-store, they can pick up their purchases when, where and how they want to.
We recently conducted a OnePoll survey among 1,000 shoppers - when we asked them what types of experiences they’d like to see more of in store, the top three answers were related to fulfilment:
- 48% wanted simple returns of online purchases
- 42% wanted the ability to click & collect
- 35% wanted to be able to order online while in store when items were out of stock
There’s a clear path for retailers who want to realign their operations and make every square foot of their real estate work for them as a revenue generator instead of being a drain on capital:
1 Inventory accuracy and visibility
Becoming an effective fulfilment hub depends on having a real-time, accurate view of inventory, and allowing customers cross-channel access. According to research carried out by logistics company Geodis, 9 out of 10 supply chain leaders say that access to shared data and improved collaboration is important to long term success, yet 77% of the businesses taking part in the survey have either restricted or no end-to-end supply chain visibility.
This is a problem that is easily solved with today’s digital store platforms – all it takes is a willingness to integrate data, systems and processes across all the operations involved in supply and inventory management. There’s no reason why each store, each store associate and each customer shouldn’t be able to see, order and receive goods from any business channel and have those purchases attributed correctly. The result? More accurate analysis of inventory movement and product popularity, leading to better purchasing decisions and resource/space allocation as well as more satisfied customers.
2 In-store fulfilment
The ability to meet customer needs in-store is the natural, positive fallout from better inventory management. Whether their purchases are off the shelf, ordered online via a store associate’s app, completed at home or delivered to the customer’s preferred address, giving them a choice ensures that they don’t leave the store without getting what they want. And it also gives store associates the ideal opportunity to cross-sell, upsell and make recommendations from the entire product range – a happy customer is more likely to spend more, and access to inventory makes it easy for them to add to their basket.
This is backed up by the results of a consumer study by Kibo, which highlighted the fact that 76% of the shoppers they surveyed said having multiple fulfilment options influences their purchasing decisions.
3 Last-mile delivery
Of course, while adjusting inventory and delivery options can make all the difference to profitability and customer loyalty, one of the consequences of giving them flexibility over fulfilment is that they become more and more demanding – they expect delivery within a couple of days and, increasingly, within 24 hours. It’s a challenge that some retailers are struggling to address – according to a survey by logistics experts Convey, 52% of them identified delivery/fulfilment logistics as a significant last-mile challenge, while 52.8% of supply chain managers said the high cost of appeasing customers is one of their top three concerns.
While it’s not something that can be solved overnight, creative retailers have found ways to make sure last mile delivery is efficient without having to add a fleet of delivery vans to their operational costs. The most practical options involve collaboration – with the gig economy/urban logistics via companies such as QuiQup who use freelance drivers and couriers to guarantee same-day delivery, with legacy carriers including DHL and Hermes, and, increasingly, with other retailers. M&S recently announced that it was teaming up with Ocado to offer its customers a home delivery service for the first time, alongside Ocado’s own brand products, and a number of retailers from Target to Next have collaborated with Amazon and Google to take advantage of their mature and mighty logistics operations.
Fulfilment in the future
With ever-increasing pressure to manage the expenses involved in running a physical store, flexible fulfilment is key to cost-effective operations which deliver for the customer. Getting the right in-store platform will allow you to have full visibility of your inventory across all channels as well as seamlessly integrate with both internal and third party logistics and operations, taking care of the all-important last-mile challenge.
Eventually, if they work with the right tech and partners, retailers have the potential to become so efficient at managing these processes that where inventory is stored, ordered and delivered from will no longer be an issue, whether that’s warehouses, distribution centres or direct from the manufacturer. Driven by demand, the mechanisms for fulfilment will be an invisible and seamless part of the customer journey - one with the power to mitigate costs and increase sales.