What retailers must consider as physical stores re-open
By Tom Summerfield, Retail Director, Peak
The gradual re-opening of business and society in the UK has begun, and is a huge stepping stone towards a return to normality. With non-essential retail reopening in particular bringing with it great opportunity and potential to change old habits of the retail industry for the better. It’s now more important than ever that retailers start considering what this new normal will begin to look like and how they can capitalise on it.
The eCommerce market matured beyond recognition in 2020, and for many, is set to form a huge part of their sales strategy going forward. This will no doubt have an impact on not only the role of bricks and mortar stores, but also how they operate. Ensuring all elements of the commerce strategy are connected will now be a given.
While we’ve seen varying stories of household names either adapting or failing to adapt to the new retail landscape, many retailers have found success in the online world. We will now begin to see these new strategies evolve further, as we see physical retail back in the fold. As bricks and mortar stores all begin to open in the months ahead, here are some key ways retailers can win in the new landscape:
Developing an omni-channel strategy Any retailers operating a multi-channel strategy prior to the pandemic will be well prepared for the challenges that now lie ahead in ensuring smooth, connected operations from many different touch points. A key advantage of a multi-channel strategy is being able to connect a vast amount of data points from across the business. The boom of eCommerce was testament to this, providing huge, rich sources of data, and as physical retail begins to be brought back into the equation, the combination of different data points from stores and digital, will be a challenge to manage.
The last year has proved that there’s been a maturity curve when it comes to connecting up previously siloed departments of a retail business. Digital transformation plans have accelerated and utilising the rich sources of data that this has created is now essential for making decisions. Multi-channel strategies already take advantage of these data points, so now it’s time the pure players followed suit. The retailers who start leveraging the rich variety of data points from customer transactions to marketing campaigns, will be able to streamline their offerings and work smarter not harder.
The ’Year of Demand’ While the months ahead may bring about more stability in the retail landscape with greater physical footfall and a matured eCommerce market, the challenge remains in mapping demand accurately. Retailers will need to focus on greater accuracy and speed so that they are able to meet demand with adequate stock while not being left with any depreciating stock if the waves of demand we saw created last year continue. Flexibility and agility are key buzzwords many attempt to adhere to already, but being able to predict demand with great accuracy and speed will provide unparalleled leeway. Being able to predict fluctuating demand provides huge relief in keeping accurate stock levels for retailers.
The geographical relevance of demand also comes into play much more with both increasing online sales and stores planning to open. To combat this, many retailers are setting up satellite warehouses and allocating their stock according to demand to deliver greater convenience to the consumer. A retailer’s allocation and replenishment strategy to manage the changing demand between in store and online, is going to have a massive impact on any success. By tying up all elements of the commerce strategy, retailers can accelerate operational decisions with supercharged data led decision making .
The benefits of connected commerce As points of purchase begin to increase, it is imperative that retailers are connecting up the supply chain to demand leavers. This connected commerce vision, where each cog of the commerce machine talks to each other, will help smooth out any disconnect between the different sales channels and the supply chain. Imagine if your recommendation engine on your website knew if you had a challenge in the supply chain and reacted accordingly…
Alongside this, retailers should also focus on connecting their supply chain up to their marketing and achieve greater synergy between those functions. This will help provide answers to questions such as what are people purchasing more of and where from? And therefore, what do we need to promote more heavily, to which people and to which regions? You can only do this with the relevant data - and here lies the challenge. Mapping and drawing insight from data are time-intensive tasks. This is where technology like Artificial Intelligence (AI) helps retailers to make high complex decisions - far beyond the ability of any operational team.
AI applications such as demand forecasting and recommender engines will help to ensure the right stock is available at the right time, for the right customer, supported by intelligent marketing to guide consumers to the products that need shifting in the supply chain. Adopting AI in this way will highlight potential bottlenecks and drive efficiencies that generate higher financial value.
The death of the high street? It’s long been discussed that the ‘death of the high street’ is on the horizon, but this is simply not the case. The high street is alive and kicking, forming an essential role of many retailers’ strategies both today and in the future. However, the fact is that its purpose and role is changing. While consumers do want to, and will begin to return to physical shopping experiences over the next year, the way they shop has been changed by the pandemic.
Therefore, it is understanding the new intersection of customer, product and channel that will prove pivotal for brands as physical retail becomes a part of the commerce model again. By predicting demand accurately, linking data from previously siloed sources and unifying the commerce strategy with intelligent insight, retailers will be able to deliver the customer ultimate convenience.
Success will look like having the right stock in the right stores, quick delivery times and effective return policies. This may seem like the basics, but it can all too quickly become an invisible brand equity killer if retailers get it wrong. Building upon the digital transformation work of the previous year to utilise data should be high up on the priority list for any retailer, ensuring these data points and technology like AI help them to work smarter, not harder.
This was posted in Bdaily's Members' News section by Peak .
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