Thinking beyond sales key to omnichannel success of retail stores
01 Jun 2018 Thinking beyond sales key to omnichannel success of retail stores
(This article was originally published in the ET Retail – link )
Current dynamics of shopping behaviour is vastly different than what it used to be sometime back. A shopper today has distinctly different expectation of product, service, value and environment. e-Commerce has impacted today’s shoppers quite significantly as the choices for erstwhile customers have widened subsequently along with the convenience of access.
Hence, retail stores (both large and small format) need to radically re-think their purpose and how they can engage with today’s customers. Having said that, offline still dominates the retail ecosystem and stores are still considered as a preferred destination for most of the shoppers. However, the expectation from a store has changed a lot over the last few years as customers increasingly try to compare the experience with online platforms. Going forward, the store needs to be an embodiment of the brand and a ‘destination’ for consumers where they can do much more than simply browse and transact; it will no longer operate as a silo but as an integral part of the omnichannel experience.
Store as a fulfillment center for omnichannel customers
As retailers continue the journey towards meeting consumer’s omnichannel order fulfilment expectations – and doing so in a cost-effective manner – the brick and mortar stores are emerging as a key enabler. Increasingly, merchants are leveraging their stores as miniature distribution centre from which online orders or orders from other stores are picked, packed and shipped, or prepared for in-store pickup. However, store-level fulfilment of online orders requires improvement of inventory accuracy to accommodate allocation optimization. No merchant wants to sacrifice on-shelf availability to online demand. As omnichannel rapidly matures, technology to integrate all sales channels in order to enable a single view of inventory becomes absolutely crucial for stores to up their game in inventory optimization. Supply chain intelligence dictates the store allocation decisions that ensure the necessary presentation and buffer stock at the store level. It also holds great potential for supporting smarter decisions regarding last-mile logistics in buy online/ship from store and pick up in store scenarios.
Store as a destination to augment the brand experience
Despite currently accounting for a small share of sales, digital sales are predicted to continue to grow and retailers will need to re-evaluate the use of retail floor space, with space being focussed less on driving the sale of product in-store and more on engaging the customer. Retailers need to put an effort in creating dramatic customer experiences through in-store atmospherics that distinguish the store experience with other channels. Retailers need to free up space to create new customer experience in store that entertains the customer. Leveraging video content, large screens and interactive displays in stores to attract customers are some of the practices that retailers could adopt. The key is to keep the experience fresh and relevant through regularly updated digital content to build brand connect for the customer.
Stores converted into Endless Aisle
While assortment strategy in the past was restricted by the product that can fit within the four walls of the store, today retailers have the opportunity to expand their assortment with no space constraints. However, larger assortments can create clutter and potential confusion by providing too much choice for customers; they will need to be supported with strong personalization and curation capabilities in-store.
Stores no longer need to carry a full range of assortment in-store and can leverage technology to showcase products virtually. Retailers can invest in kiosks and store associates tablets to showcase the extended assortment. Similarly, retailers no longer need to carry stock for the full range of products on the floor, with fringe sizes, colours. etc. being showcased virtually. As a direct result, retailers can now consider reducing inventory levels and therefore stock room space in stores.
Empowering store associates beyond selling
The changing demands of today’s customers also made it mandatory to empower the store associates accordingly for the more personalized experience. As customers are increasingly well informed, they expect more from the service they receive from the store. However, this requires changing roles of store associates. They now must become brand advocates and start to play a key role in the execution of new customers experience in the store. Moreover, stores which equip sales personnel with technology to fulfill customer orders by accessing inventory in other stores creates the greater chance of conversion in terms of footfall. Customers now have more chance of getting the right size and color of the product even though it’s not available in the store they walk-in. Ultimately, this also helps in enabling unique and personalized experience for the customers.
The role of retail stores continues to remain critical for customer acquisition. Retailers who can adopt technology to transform the in-store experience can cash on new opportunities to create the true omnichannel customer experience. However, the success in this transformation depends largely on innovation, logical experimentation and smart use of data that will lead to seamless in-store experience in future.
How Omnichannel is helping retailers to meet the consumer’s expectations. Learn more