Whilst talk of the death of the high street may be a little overblown, it does indicate the depth of the transformation that the retail industry is undergoing. While it’s true that e-commerce has certain advantages over traditional brick-and-mortar, physical stores do have their own benefits, which aren’t easily replicated by the likes of Amazon.com. And the truism remains that the two key assets of the traditional retailer are people and locations.
The trouble is, many retailers don’t leverage these assets to maximize full potential, making it increasingly difficult to differentiate and compete. Take, for example, the US retailer Circuit City, which was known for having knowledgeable employees that understood the products they sold. When faced with competition from online stores, Circuit City made a serious lapse in judgement. Instead of accentuating its competitive advantage of store associates, it let them go and hired lower-cost, inexperienced staff.
However, where Circuit City did better was leveraging its locations. The electronics retailer was a pioneer for buy online, pick up in-store, an experience consumers loved — and still love today. But where Circuit City could have done even better would have been to ship online orders from its stores as well, taking advantage of each store being a mini warehouse. By the time Circuit City started down this path, it was too late.
The lesson is that modern customers want the flexibility to choose the way in which products are delivered. Sometimes cost is the driver, other times it may be speed or convenience. Nonetheless, the end goal is to keep customers happy while driving down costs. The key is to unlock the potential that every retailer has in its people and locations.
1. Ensure 360-degree visibility into the supply chain.
Today’s consumers shop their own way, at their own time. As such, retailers need the flexibility and real-time visibility to serve consumers, 24/7. One such way is full visibility into products, leveraging locations and inventory as warehouses and reducing out-of-stock items by fulfilling them from all locations. This sets the correct expectations with customers, while optimizing shipping costs, delivery speed, labour costs and even the number of boxes shipped.
2. Choose the right fulfillment option.
For most retailers, there are now multiple fulfillment options, including distribution centers, stores and drop-shipping directly from vendors. Retailers must understand which fulfillment options meet the needs of both the buyer and the seller, in both B-to-C and B-to-B scenarios. Not to mention, choosing the right option is critical for companies that want to keep their costs down while still meeting ever-evolving customer expectations.
3. Always think customer service first.
The supply chain isn’t perfect, but success lies in putting the visibility to work and anticipating potential problems and keeping customers informed along every step of the fulfillment process. This includes handling customer calls, flagging issues for intervention, and managing orders from beginning to end.
4. Perfect in-store execution to lower costs.
For retailers, leveraging store locations as warehouses helps reduce costs and increase customer service. Customers can buy online and then either pick up in-store or have it shipped from the store. By deploying functionality in the cloud, companies can get up and running quickly without having to worry about scaling for peak, upgrading software or managing backups.
In the simplest, and perhaps most cliché, terms, the customer is always right. Every decision, be it in adopting certain technologies, hiring certain employees or choosing a store location, should revolve around the wants and needs of the customer. And recognizing that that customer – singular – is now a market of one.