The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Recommendations For Contactless Retailing

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Retailers’ plans for alternative fulfillment options now are virtually unrecognizable from those they shared with us at the beginning of 2020 just prior to the pandemic, the last time we surveyed them on the topic.

Back then, retailers believed that alternatives to traditional fulfillment such as Buy Online/Pickup In-store (and its derivatives) would be nice-to-have features someday, but customers weren’t really demanding them yet. That sentiment has changed in a very short period, driven by the worldwide health crisis, a spate of natural disasters and civil unrest.

One thing for clear: there is no such thing as “normal” in the post-pandemic world. Those who can build in the flexibility to fulfill orders in new and non-traditional ways will perform better than those who don’t. Retailers already recognize how much more valuable customers that cross back and forth between the physical and digital worlds are. Not providing enough fulfillment and delivery options could well spell disaster.

As is often the case, over-performing Retail Winners are demonstrating the best way to navigate through the challenges and seize on the opportunities that the new retail environment presents. Based on those winning behaviors in our most recent benchmark report, What Contactless Shopping Means For The Store, we offer these recommendations to all retailers:

Get the Best Of Both Worlds

Winners understand that giving shoppers the ability to shop online and pickup their purchases at or near the store provides the best of both the digital and physical shopping experience. This fundamentally means those two selling environments must be integrated. For example, the customer order management system must be integrated with in-store Point-of-Sale systems. A prerequisite is enabling enterprise-wide real time and accurate visibility into three key data elements: inventory, customer, and product. These capabilities are no longer optional – their absence is a barrier to successful competition.

Be Sensitive To Changing Consumer Needs

When retailers think about new fulfillment options, they think of Buy Online/Pickup In-store (BOPIS), Buy Online/Pickup Curbside (BOPAC), or direct delivery.  But Retail Winners understand that in these dangerous times, they need to provide ways for customers to independently pick up their own orders in a safe and secure way.  They, far more than average and under-performers, are looking at solutions such as lockers near the store that will allow consumers to pick up orders during off hours, within the store during store hours, and even at 3rd party locations.

Winners are being sensitive to new consumer needs – and that is the point! Consumer needs will change, and retailers need to implement processes and supporting technologies that make it relatively easy to change with the consumer. Flexibility and agility are key success drivers.

No Sacred Cows

Winners are willing to challenge old assumptions built into their operating models, including those that relate to store design, labor requirements, process designs, and technologies.

You Can’t Do Everything, So Do The Important Things

All retailers must recognize that shoppers will continue to alter their shopping behaviors for quite some time to come. This is unprecedented, and it means retailers are going to have to make hard decisions on which of these behaviors to prioritize going forward. Everything can’t be equally important, and priority capabilities will change from market to market, retailer to retailer, and even store to store. Support those capabilities that strengthen your brand.

Plan To Address New Costs

New processes require new people and skills as well as new technologies. Winners are aware of this. But while retailers in general might have saved the sale by offering Omnichannel order and fulfillment options to consumers during the lockdown, “efficiency” was a secondary consideration.

Winners don’t have any magic bullets. Their focus in 2020 was to find new pragmatic ways to leverage their investments in both digital and physical selling environments, knowing efficiencies would have to follow. Now it’s time to optimize the new processes they implemented, and that includes automating wherever possible.

To paraphrase American baseball legend Yogi Berra’s tongue-in-cheek wisdom, “retail is 90% about being customer focused; the other 50% is about operational efficiency.”

You Can’t Do It Without Technology

Retailers must implement Omnichannel order management and order fulfillment capabilities to compete in the world as it exists after the pandemic. There is simply no way for them to brute their way through new consumer requirements for 24X7 accessibility, fulfillment options and convenience, and (above all) safety while still making a profit.

Top-valued capabilities include mobile status updates, reserved curbside order pickup times, customer service desks and order pickup kiosks. Retailers are also thinking about the employees who fulfill online orders in the store and interact with customers: mobile devices to alert employees of BOPIS/BOPAC related tasks, store-level pickup confirmations, the ability for employees to view order status information, and order picking and staging capabilities.

To support new processes, fundamental changes to the enterprise technology portfolio are required. In 2020, retailers did “whatever it takes” to fulfill and deliver online orders, without too much regard for whether those processes were optimized. But Retail Winners haven’t jettisoned the need to “do it right” with the desire to “just do it.”

Going forward, retailers must go back and optimize the processes they implemented in the heat of the crisis. This will require enabling technologies get re-examined and either re-worked or replaced. While Retail Winners are farther ahead on this path, no retailer is exempt. The work must be done.

If you haven’t yet read the full report, we highly recommend it.

Newsletter Articles October 19, 2021