Multichannel Retailers: How to Effect Real Change
As the COVID-19 pandemic rages on this holiday season, multichannel retailers are making quick changes to improve store and online shopping experiences to drive sales while meeting social distancing guidelines. This is especially important with the second wave of coronavirus spiking during the busiest shopping time of the year.
Beyond the holiday rush, retailers cannot afford to be short-sighted, ignoring the paradigm shift in consumer purchasing behavior that will extend long after the pandemic is over.
One of the more obvious early indicators: What retail leaders are doing. In late October, Walmart announced it was turning four stores into ecommerce labs, testing technologies and workflows to create hybrid digital and physical experiences. If multichannel retailers aren’t looking at their own long-term investments in these areas, they will soon face a more substantial chasm between themselves and the market leaders.
Below are some of the most crucial long-term changes multichannel retailers need to to make in order to survive and thrive in the new normal.
Complete Inventory Visibility
The supply chain is a complex patchwork of technology from point-of-sale (POS), order management systems (OMS) and third-party ecommerce connections to suppliers, distributors and manufacturers. And some challenges are outside the control of multichannel retailers. For example, stressed manufacturers facing production delays resulting from lockdowns earlier this year must prioritize big retailers over smaller ones. The clearest path to creating better hybrid customer experiences is obtaining a complete view of inventory.
Store-level inventories for most retailers are housed in the POS system, so the first step to realizing hybrid experiences is making sure it’s integrated in near real time with the OMS and ecommerce platform. This allows inventory visibility across every store location, in the warehouse and online, enabling things like ship from store. It’s crucial to compete with ecommerce-native leaders like Amazon that leverage AI to anticipate customer purchases and ship items to the closest FC even before checkout.
While most multichannel retailers don’t have the resources to invest in this level of technology, ship from store can get products to customers faster.
Retail Extension Terminals
These are essentially smart POS systems that extend ecommerce to physical locations, enabling things like tablet-based ordering. While retailers like Apple have embraced this for years, its application has largely been relegated to popup stores and in-person events that have all but disappeared during the pandemic. Extension terminals can instead be part of a broader initiative to further blend online and store shopping, enabling easier management of social distancing protocols that limit the shoppers in a store.
For store queue management, extension terminals can virtually add customers to the line through their phone and send a notification via SMS when it’s their turn. They can wait in the car or explore other stores while they wait. Associates can share item location and availability with customers, instead of checking themselves. With visibility of the online stocking levels and other stores in the area, they can help customers either make an online purchase or go to a nearby store.
This same functionality allows for easy BOPIS capabilities. Once the order is placed, the associate preps the order and brings it curbside when notified of the vehicle’s approach. According to research by Cardytics, spending at stores is surprisingly only down only 14% year-over-year due to the pandemic, making it the No. 1 conversion location. Additionally, NRF research from 2019 found these conveniences were expected, and they’re quickly coming to fruition now. The combination of inventory visibility and ecommerce technology merges online and store shopping for a seamless experience.
Investing in Global Ecommerce
Many larger multichannel retailers have major store locations in markets where a sizable portion of revenue comes from tourist foot traffic. With high rental costs and overhead and lower foot traffic, they cannot make up those losses on domestic ecommerce alone.
Instead of waiting for travel and tourism to return to pre-COVID numbers, retailers should invest in expanding to global markets. This is easier said than done as it requires plenty of market research, integrations with third parties for country-specific billing and payments, international shipping, logistical infrastructure and translation, among other necessities. With the pandemic accelerating ecommerce growth, retailers need to consider building their global presence and insulate themselves from the unknown.
Savvy retailers have done a tremendous job gearing their business to adapt to COVID-19 protocols and the explosion of ecommerce, but many changes are short-term fixes to maximize revenue until the pandemic passes. However, customer habits formed today will not necessarily revert back, and retailers are certainly not waiting to find out.
Matthew Carroll is President and CEO of Ignition Commerce