Also, see:
Also, see:
Customers are always looking for “something extra” in their shopping experiences. And particularly when they do their holiday season purchases for their loved ones, they will not think twice before switching loyalties if the experience is not up to their expectations. If you fail to provide frictionless shopping experiences, IT WILL COST YOU CUSTOMERS! 65% of consumers in a recent retail consumer survey said they’d cut ties with a brand over a single poor customer service experience.
The festive season brings a hot time for retail businesses around the world with all its holidays and preparation for celebrations. Usually, it starts during mid-to-late October with festive occasions such as Halloween (10/31) and Diwali (early November; in the Indian subcontinent), scales up on Single’s Day (11/11), peaks during Thanksgiving Day, Black Friday, Hanukkah, and Cyber Monday (last week of November) and then continues through Christmas (12/25), and New Year (12/35), finally culminating with the Chinese New Year (late Jan – mid-Feb) every year.
According to a multinational professional audit and consulting services firm, the shopping activity will be 7-9% higher than in 2020 during the November to January timeframe this year. Total sales are expected at $1.28 to $1.3 trillion. The e-commerce sales specifically are expected to demonstrate 11-15% year-over-year growth during the 2022-2023 holiday season. It means online stores can count on total sales between $210 and $218 billion this festive season.
With many consumers still trying to avoid exposure to the COVID-19 variants, an overwhelming majority of retail consumers start their journey online with almost 80-85% of retail shoppers conducting their holiday shopping research online, from the safety of their homes, before buying. The festive season gives a chance for online stores to significantly increase their sales, revenue, and profit numbers. By making a few smart moves, retailers can take advantage of the surge of holiday traffic – and start making more sales! It is an extraordinary opportunity for eCommerce businesses to achieve great profits, which is why it is important to keep up with the demand and provide customers with an amazing, seamless shopping experience.
But if you don’t take the right steps to prepare for the holidays, they can turn into a disaster. Site downtime, loading issues, payment problems, delayed deliveries, and more could plague your store, and damage your reputation and your sales. Each year, you will find some retailers that do it very well — and some retailers miss the mark completely. This year too, there would have been winners and losers this holiday season!
So, what mistakes did you avoid when preparing your physical or eCommerce stores for the holidays in 2022?
Let’s take a look at the top 6 most common holiday sales preparations that retailers should get right up front. Super, if you got all 6 of them ticked in 2022 already. But if not, preparations for the festive shopping season 2022-23 are merely six months away. Start early and get them right next year –
Consumers expect that a shop will help them during the buying process when online stores are overflowed with holiday offers. Customers may additionally have confusion in shopping process details, they may have doubts regarding the product, etc. Hence, it is of prime importance to have trained store staff ready in-stores to be able to offer the shoppers a pleasant shopping experience. With increased crowds during the holiday season, the store staff needs to be trained to not only be quick in their service and checkout, but also for them to be good in their product knowledge so that they are able to assist customers promptly. The knowledge will help the store to be more efficient in tending to customers’ queries and improving their shopping experience. This in turn helps to manage the crowd and allows the store to serve more customers within a shorter amount of time, decreasing the wait time for customers waiting to enter the store.
Retailers that adequately staff up and strike the right balance of enforcing COVID-19 protocols while also creating a stress-free experience for customers win the holiday season.
Customer buying history across channels accumulated in an Omni-channel Retail CRM over a sufficient period of time serves as input to the promotions planning engine, enabling you to easily define business rules and roll out promotions specific to customer segments, making their relationship with you a personalized experience.
These promotions can be defined for a specific range of merchandise or for a specific time frame or for a specific channel or store and can be executed based on various parameters like customer age, gender, birth dates, demographics, ticket size, RFM (recency-frequency-monetary value) and more. This will give the retail marketing team the flexibility to run a wide range of campaigns to grow business with loyal customers and to increase same-store sales. It is important to be able to run a large volume of business and yet be able to make your customers feel special every time they interact with you.
Surges in traffic, both online and offline, are good if you’re prepared for them. But if you’re not, they can cause performance issues that may cost you sales and maybe even loyal customers. As part of the retail ecosystem, we’ve all been there at some point or the other. A holiday sale leads to a surge in traffic. All of a sudden, your loyalty program or inventory management system or the payment processor fails, your e-commerce pages start loading slowly, or your website starts to crash because it can’t handle the traffic.
Make sure that your web host allows you to scale up your website quickly if you need to – add more capacity so that you can keep your site running even if you encounter an unexpectedly high surge in traffic. You should also look for a robust, stable POS system that allows to view and manage customer data and store inventory easily. Newer retail solutions such as an mPOS (mobile POS) prove extremely useful in busting checkout queues and handling surges in in-store traffic.
When shopping online more than 65% of clients will delete the item or drop their whole order if they see the out-of-stock sign. Nobody likes to shop for an item and add it to their cart only to find out that it’s out-of-stock, not the right fit, or back-ordered. Before the holidays start, you need to think through your merchandising approach and make sure that you’re fully stocked on your most popular items. Plan for sufficient buffer stock to meet the targeted sales volume for the season. Keep the warehouse inventory handy and the display amply stocked so that customers feel spoilt for choice. With Endless Aisle functionality, such as the one offered by ETP Omni-channel Retail Solutions you can easily view the entire inventory available at nearby stores, online/virtual locations, and your warehouses and assist the customer to order from there thus avoiding a stockout/lost sale situation.
Sure, a few stockouts are still inevitable. But by using the data you’ve gathered about your products during the rest of the year, you should be able to predict which ones will be the most popular throughout the holidays and stock up accordingly.
Once a customer clicks the “Buy” button, their order’s journey begins. New orders are placed on your eCommerce platform, then whoever is managing your inventory has to select, package, and ship the right products to the right place. This might not seem too hard when you have a brand new business: A few orders come in each day and you can quickly (and cheaply) fulfill them yourself. No problem. Potential obstacles can arise, however, as sales grow, channels multiply, products are added to your inventory, and your customer base expands.
The right order management system can help remove bottlenecks for you as your eCommerce store grows. It is a one-stop-shop to view and manage all customer orders in one place. Order information is passed between your order management system and your eCommerce platform while providing you with visibility into the entire process. This can help automate the flow of sales order information to every piece of the retail supply chain. You can track the entire journey of a customer order, from the “Buy” button to delivery — and even returns. An efficient order management system organizes and automates everything that needs to happen to get customers what they ordered on time and in good condition.
Omni-channel retailing is a consumer-centric approach that refers to the adoption of strategies, a variety of engagement tools, and a seamless approach to the consumer experience through all accessible shopping channels. This not only helps organizations to centralize their business operations and implement infrastructure changes but also enables them to provide a consistent experience to attract and retain customers, thus driving greater sales.
ETP is enabling brick and mortar retailers to embrace unified commerce and drive their brands and customer relationships in a seamless manner. ETP V5 Omni-channel Retail Solutions enable you to deliver a unified omni-channel experience with retail digital transformation features such as Buy Online Pickup In-Store (BOPIS), Reserve Online Pickup In-Store (ROPIS), Click and Collect, Click and Deliver, Endless Aisle, Buy Online Return In-Store (BORIS) as well as a holistic view of the inventory and a single view of customers across all channels. This is done using real-time integration of ETP’s POS, CRM, and Promotions engine with webstores and marketplaces using ETP Connect’s secured web services framework, which has the ability to see and manage order flows easily.
In addition to trained store staff, attractive discounts and loyalty programs, and multiple delivery options, what is it that you need to proactively be ready to offer your customers when they shop with you during the festive season? Browse through our 9 tips that add the extra sparkle to your sales and profits during festive shopping.
Retailers must double down on consumer research and ensure a positive customer experience. However long this period of turmoil lasts, those companies which will finesse it and succeed will be those that invest in competitive pricing, do research to understand their customers, and make the omnichannel online and hybrid shopping experience a cinch to stay ahead of the competition.
As the festive season is in progress, there is a lot retailers can do to bank more sales and boost profits as much as possible. The key is to be proactively prepared. If retail businesses expect to grab larger portions of the festive shopping cake, it is up to the retailers to take charge and make it happen.
The luxury and lifestyle retail industry has always set high standards for itself when it comes to extending outstanding customer service. It is this service and shopping experience that keeps the customers coming back for more. But what exactly goes into providing a truly superior experience?
The holiday season in particular always brings in waves of shoppers both online and offline that lead to a large number of exciting promotions, massive sales, and increased revenue often also result in long queues, longer checkout processing wait-time, stock-out situations, and lost sales. With COVID restrictions further complicating the experiences at the stores, it is important for retailers to be proactive about utilizing the right retail technology that helps to not only avoid any of the aforementioned unpleasant situations but also boost the holiday season profits.
In this write-up, which is the concluding piece of our series on how retailers can actually deliver an amazing customer experience, we throw light on how innovative retail software solutions and the associated benefits can do just that! Here are some ways in which you can “upgrade” your customers’ experience in your store:
Apart from quality products, customers usually seek a pleasant store ambiance, easy access to merchandise with correct labels be it wherever, whenever, or however they may choose to access it from, promotions and offers that are tailored to their requirements, and helpful, well-informed staff as part of the overall in-store experience.
Unfortunately, these are often independent departments, functioning in silos and the data collected from each of them cannot be analyzed together in a unified manner, thus effectively reducing its value. To work around this and make optimum use of all the data obtained from the different segments, you need to unify your retail processes. Unified commerce solutions involve unifying your omnichannel retail software solutions along with inventory management, order management and fulfilment, and product information management systems. It gives you a single view of your customers, one version of the truth of your inventory helps to secure all your payment transactions, and to gain better control over your logistics and order deliveries.
This will transcend the level of customer experience you are delivering to a truly superior one.
This holiday season, move the queues super quick so you can sell more. Implementing an mPOS system in your stores will allow your staff to help customers scan their purchases swiftly and check out faster without even having to wait in the queue. This is particularly helpful for the store staff to assist customers with smaller purchases who can be in and out of the store in a quick manner. This helps reduce the crowd in-store and maintain safe distancing, allowing you to maintain the COVID-induced restrictions and sell more while attending to more customers within the same time.
Having an mPOS system would also mean that you can register your customers into your CRM/loyalty management system right outside the store and they are able to enter the store, purchase quickly, and start earning loyalty points. This allows you to engage shoppers waiting in the queue to enter the store and potentially drive higher sales using the mPOS system.
This divide and delight strategy will help ease the in-store crowding significantly and customers will not have to wait too long to pay for their items, keeping them happy and allowing them to have a great impression of your store.
BOPIS, i.e., buy online and pick-up in-store – this strategy allows customers to make purchases online and hop over to your store to grab the items. They may even be queueing outside another store that is not BOPIS enabled while purchasing your products so that they can grab and go afterward.
With this, customers will be able to have the instant gratification of getting the items instantaneously without having to queue for them. Reserve online, pick-up in-store and click & collect are features very similar to BOPIS that can also be enabled with the help of the right omni-channel retail software solutions.
Retailers can also set up pick-up points outside the store to facilitate fast pickups and reduce the queues. In this way, customers who purchase online can pick it up faster while avoiding having to wait in line in the store.
All in all, this holiday season, it is important for stores to stand out from the crowd and offer unique ways of shopping such that shoppers will feel at ease and have a more pleasant time shopping. This will encourage them to return to your store in the future and thus build brand/store loyalty.
Limited shelf space? No problem! With technology nowadays, it is easy to list your entire inventory across stores and at warehouses online. Even with customers that are unfamiliar with your store, you are able to showcase all there is to them on a single screen.
During the holiday season especially, it is common to see empty shelves and frustrated shoppers. Store staff is unable to restock the shelves in time and that leaves the shoppers unfulfilled and unsatisfied because they made a wasted trip down to the store. With an endless aisle feature, stores are no longer limited by the shelf space. Store staff is able to approach shoppers and offer them suggestions that are not on the shelves allowing them to view the entire inventory and choose from there. Then if the inventory is not in-store, the sales associate can order the products for home delivery from the store on the same screen.
Thus having an endless aisle option allows for the in-store customers to view the entire inventory across all your stores and warehouses and pick out the item either to be shipped to their homes or reserve it for pick up another time. Buyers get more than they expected and this will increase the shoppers’ satisfaction.
With the Ship From Store (SFS) fulfilment technique, you can transform your stores into virtual distribution hubs that use stock from the physical store estate to fulfil both online & offline orders by leveraging inventory held in physical stores & making it available for sale through the eCommerce channels.
Extend an enhanced customer service to your end customers where they can buy products online and return/exchange them at the nearest store, or they can buy in-store and trigger an online return/exchange.
All the previous options are all related to the physical storefront. What if you have a fully digital option where shoppers are able to shop online and have the goods delivered right to their doorstep? In this way, you can reduce the number of customers in the stores and may even potentially have more sales online because the customers are not limited by the number of items they can carry!
At the onset of the holiday season, it is important for your business to be ready for the different types of shoppers that will walk through your store doors or browse through your e-commerce sites. Knowing your customers well is the key to retail success. Consumer behaviour is an important factor to consider when preparing your business, particularly your store for a festive opening and these steps will help you figure out the shopper personas with ease and plan your promotions for each one of them.
Buyer personas are pseudo representations of your ideal customers based on extensive research and data collection. They help you focus your retail marketing efforts on qualified target audiences and prospective customers. As a result, you’ll be able to attract high-value visitors, leads, and customers to your business who you’ll be more likely to retain over time. From your existing pool of buyers, figure out the most common personas to uncover trends about how certain leads or customers find and consume your content and/or respond to your promotions. How old are they, their gender, where do they live, which income group they belong to, and so on.
After identifying who these people are, the next step is to understand their typical buying behaviour in your store or on your website/marketplace.
Leading to the next point, look at their purchases and figure out the objective of their purchases. Are they buying for themselves or others? Especially during the holiday season, what type of gifts are they adding to their shopping carts, both online and offline? Are they buying for an office gift exchange, for friends, family, or their partners? How often do they buy products that you sell? What is their average basket/ticket size? And, so on. Different types of shoppers will exhibit varying budgets and different product purchases. This will help you see what inventory to stock up and how your staff is able to give sound recommendations.
Based on the research data for the above two points, you’d be able to create various buyer personas such as Decisive/Commanding, Collaborative, Outgoing, Sceptical, Analytical, and Easy going. Using the right kind of omni-channel retail software, you will be able to design your marketing promotions to suit each persona, build and manage your loyalty programs, and offer them a variety of speedy order fulfilment options to suit their needs.
Typically, shoppers like to browse/explore several products and take their time shopping. During the festive season, we all know that shoppers want to get their festive shopping done as soon as possible. But they also look for the best promotions and offers suitable to them. Stores are also in a rush to clear as many shoppers as possible so that they can clear their stock and hit the KPIs for the year. So how then do we go about speeding up the process?
Make use of all the online and offline data you’ve collected throughout the year and send your existing customers a curated list of gift ideas, festive promotions, and offers. Not only does this show that your brand cares for its customers, but it also reduces the time they need to think about what to buy next. They can spend more time browsing and buying/adding to their wish list more items from your shop.
The personalized promotions pique the interest of the customers and the discounts/offers essentially encourage them to buy more!
With ETP’s Promotion Planning tool, ETP Accelerator, you can roll out promotions specific to buyer personas or customer segments as well as easily define the business rules based on merchandise, time, and location.
81% of retail shoppers conduct online research before buying. The overwhelming majority of retail consumers start their journey with online research. The majority of these searches occur on mobile devices (nearly 77%), since retail shoppers frequently research competitor products and pricing in-store. App downloads increased greatly during the pandemic and a vast majority of the retailer fraternity has planned to prioritize a retail mobility or mPOS solution to transcend the omnichannel customer experience their brand offers and to be present where your customers are and when they are looking to purchase.
Many stores are looking at growing their customer base to generate more revenue this festive shopping season. More customers equals more revenue, right? Yes, in some sense that is the truth. However, if you are not retaining your customers and the outflow of customers is equal to, if not larger than the incoming new customers, not only will you not grow your revenue, you might even be losing revenue! So, what should you do to retain your customer base? Loyalty is the key; here are some ways you can work on your loyalty programs in the festive season.
In the after-effects of the pandemic, as we move further away from fear and anxiety towards a holiday season that is filled with hope, bounce back and fully vaccinated retail staff as well as fully vaccinated shoppers, even with the rise in online purchases, there is undoubtedly going to be an increased footfall in the retail stores in preparation of the gift-giving season.
Through much of last year (2020) and a greater part of the beginning of this year (2021), given the Covid restrictions, many stores had a limit as to how many customers can be in store at a given point in time. With many of these restrictions being relaxed globally this holiday season, there is a need for brands to be ready to tackle large crowds and long lines at the checkout counters resulting in frustrations and potential loss of sales during a potential peak period.
A recent case of concern was when a leading footwear store had its flagship store closed due to the breaching of COVID restrictions during a product launch which drew huge crowds outside the store despite the advisories on crowd management. Nobody wanted this to happen, but it did!
So how do you get your retail business including the stores, your brand.com, marketplaces, mobile apps, etc. to be ready to welcome the holiday season shoppers and give them access to your products, payment methods, and order fulfilment options from wherever they please and whenever they please while offering them great service and amazing shopping experiences? There are a few ways that brands can adopt to tackle the basics while reopening stores, and potentially improving customer experience and sales.
In stores, other than the products, the staff is crucial in giving the shopper a pleasant shopping experience. With increased crowds, the store staff needs to be trained to not only be quick in their service and checkout but there is a need for them to be good in their product knowledge so that they are able to assist customers promptly. The knowledge will help the store to be more efficient in tending to customers’ queries and improve their shopping experience. This in turn helps to manage the crowd and allows the store to serve more customers within a shorter amount of time, decreasing the wait time for customers waiting to enter the store.
Keeping Covid restrictions and requisites in mind, the staff needs to be trained to handle social distancing and product handling as per policies set up. Having masks and hand sanitizers handy is mandatory and certainly goes a long way.
Deploying the right retail software tools both in-stores and at the head office is crucial for getting the right product at the right time to the right place in the right quantities, and in effect, empowering you to offer an enhanced shopping experience to your customers that makes them buy more, buy fast and buy again! Retailers who leverage an integrated supply chain, POS, CRM, Promotion Planning, and Analytics tools stand to gain in a competitive market from business benefits such as efficient business plan for channel/store based on historical sales and the economic scenario, for example ‘sales during seasons (festivals)’. Some of the most important software that every retailer must invest in are:
1) Point of Sale (POS)
Benefits of an innovative POS software for your retail business notably include making it extremely easy to manage your retail business by significantly simplifying daily business tasks such as maintaining customer details and buying history, better promotion, inventory, and loyalty management, simple invoicing, quick checkouts, secure payments and many, many more.
The last thing you want is for the checkout to be slow and frustrating for the customer enough to leave the queue and not buy anything. Having a faster POS workflow not only reduces wait time but also allows employees to concentrate on engaging the shopper and potentially selling more through the checkout process.
With an efficient and easy-to-use POS system, instead of fumbling around with unnecessary checkout processes, retail store staff will be able to offer cross-selling and up-selling recommendations and convince the shoppers to purchase other items to complement the customers’ original purchases.
2) Mobile POS (mPOS) system
Nothing beats being able to purchase items without even going to the checkout counter and queuing up. Since there will be a long line of shoppers at the checkout counters, why not make use of the opportunity to sell items to the people in the queue? Having an mPOS system opens up a lot of opportunities – inventory can be checked on the go, applicable promotions can be looked up, additional items can be purchased while waiting in the queue, adequate social distancing can be maintained in-store, and secure billing can be completed making the shopping experience a truly memorable one.
Shoppers who just want to grab a small item are able to purchase it quickly from dedicated counters that have the mPOS system in place. Meaning, shoppers who just want to buy a single item would not have to wait in line and can be in and out of the store faster. This allows the retailer to clear customers faster, maintain a healthy queue, have a quicker inventory turnover, and keep the shoppers happy.
Making the transition from traditional retail to being an omni-channel retailer during this festive shopping season while the pandemic is still around, makes it hassle-free for stores to limit the number of people in the store and in the checkout queues, and yet improve the store’s revenue and get more sales while still maintaining good COVID practices.
Buy Online Pickup In-Store (BOPIS) or click and collect is something that is up and coming around the world. It is important for shoppers who are not able to head to the shops during office hours to be able to still browse and pay for the items and pick up the item when it is convenient.
This allows customers to purchase items online without even stepping into the store and mingling with other shoppers. This arrangement will free up the store to allow other shoppers to enter and it will help the store to not lose sales due to COVID restrictions and impatient or anxious customers.
Given the store’s limited capacity and limited shelf space, it is difficult for all the products to be displayed in-store. Having the endless aisle option will open up the ability for customers to view the entire inventory and pick out items either to be shipped to their homes or reserve them for picking up another time.
This opens up more choices for customers to choose from, while at the same time keeping the number of shoppers low in stores. Endless aisle will also allow staff to have a clearer view of the availability of items. They are able to provide prompt alternatives and offer other options to shoppers when stocks run out, saving time from checking the inventory physically.
If you have an online/omni-channel presence, the data you collect online is also very valuable. The online buying behaviour may be different from that in the stores. Hence, it is important for you to analyse the online data to figure out how to properly promote and structure the online purchases.
The online purchase behaviour can also be a piece of additional information for in-store buying behaviour – it can show you what are the typical items that are purchased together and this might help you figure out your store planogram – that is, deciding which inventory to prioritise when planning the display on your shelves.
Successful retailers know their customers (almost) personally. Not only do they know what the customers are buying and what they want to purchase, but also their behaviour outside the store such as their hobbies and interests, important milestones, etc. By analysing all that information, they are able to provide stellar customer experiences across all channels, particularly in-store. Stores are aware that the day they stop knowing their customer is the day they lose that customer.
It is definitely a difficult time for retailers during this festive season in the aftermath of the pandemic. However, it is also an opportunity for retailers to show their customers the adaptability and ingenuity of the store and impress them positively.
A POS Software is a robust and flexible retail software that offers your customers a unified online-to-offline shopping experience. It seamlessly streamlines all back-end operations and customer-facing services by syncing them with one another resulting in a quality omnichannel retail solution. With the help of omnichannel POS solutions, retailers can connect with their customers quickly, track their buying history which serves as raw input for creating personalized marketing promotions, and offer smooth, consistent quality experiences across various retail channels such as online markets or marketplaces, physical stores, company websites, mobile apps, and many more.
Listed below, discover the benefits of investing in cutting-edge POS billing software for your retail business:
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What omni-channel capabilities do you really need to enable business success?
Technology plays a crucial role in omnichannel in tying the back office with the front-end infrastructure. Retailers need the ability to manage their resources, inventory, and suppliers, and connect them all the way through the retail value chain for understanding how they should deliver products and then identify key customer insights in the pre-and post-purchase experience.
To enable that, there are some key capabilities for omni-channel – the basic building blocks:
There are some key capabilities that the retail business needs for being truly Omni-channel and some basic building blocks with respect to:
Omni-channel capabilities must provide rich customer data and insights across contacts, channels, sales, lifecycle, and more to serve as the cornerstone of all Omni-channel efforts.
Key elements (as seen in the building block diagram above) are –
How do you meet the customer’s expectations in terms of a seamless experience?
One area to address this is the ability to plan inventory for the new challenges of the omni-channel environment where you are not wholly sure where your demand is going to come from and how your customers want to receive your products. Omni-channel inventory management processes depend upon balanced planning and robust analytics to effectively scale the supply chain efficiency to serve the new omni-channel customer in today’s Omni-environment.
To enable these analytic engines and to improve customer experience, organizationally one of the key requirements is that companies need to break down the silos for omni-channel success. In traditional retail, there are silos set up that control – the development and the buying of the products, the channels of distribution, and how do you actually support your customer’s purchase. Companies that can group leaders across the functions and the silos to share teams and to share incentives, will have the most success in meeting customer needs in today’s new omni-channel environment. An agile approach to breaking down silos is necessary for omni-channel success.
Logistics & Supply Chain Management are two of the main aspects of technology investments that are an important enterprise infrastructure to better facilitate the omni-channel experience effectively. Retail businesses today have more trading partners with fewer common currencies, languages, and regulations. Costs incurred through longer cycle times, increasing raw materials and labour costs, and a tightening freight environment are encroaching on profit margins. Fulfilment is often hindered by poor distribution strategies. The success of a global supply chain’s omni-channel upgrade is now dependent on:-
With today’s customers being more powerful than the purveyor of goods, out-of-stocks are unacceptable; customers will go elsewhere. You should be able to offer your customers universal inventory availability – any item, anywhere, anytime!
In order to deliver this, one strategy gaining momentum is cross-channel fulfilment. Retail technology should be able to leverage store inventory and personnel to fulfil store and online orders, recapturing sales that would have been lost due to out-of-stock conditions. This enables the business to sell through select store merchandise at higher margins based on specific criteria such as end-of-life products.
A global leader in apparel retail has replaced over 40,000 cash registers to enable their omni-channel strategy to work by leveraging stores as online order fulfilment centres, equipping store personnel with web-enabled tools to check product availability across other nearby stores and place orders, and tap into all available inventory in real-time in order to meet demand, boost sales, reduce markdowns, and increase inventory productivity across all channels. The retailer has reported that this has helped the company’s overall sales grow by $1 billion each year over the last 3 years.
Investing in the right retail software solutions would enable you to integrate planning systems for all channels and connect front-end order management to back-end technology infrastructure. Not having to take a markdown and not having to build more warehouses is every merchant’s dream! And having the right technology that not only fulfils this, but also secures future investments in enterprise technology is every Technology Officer’s dream!
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As consumer spending moves to digital, retail CFOs must develop new strategies for managing CAPEX and OPEX.
Shopping has never been easier for consumers. But for executives behind the scenes, digital advances have created complexity. It takes an omnichannel approach to meet these new consumer demands, requiring companies to retool their strategies and operating models in areas such as marketing, merchandising, store operations, and IT.
Omni-channel — the seamless integration of physical and digital worlds to create an outstanding, cohesive shopping experience.
As the Covid-struck retail world has digitized hastily, the tools and structure of retail organizations have changed dramatically. Numerous retailers have significantly reorganized their merchant and marketing teams to consolidate or coordinate their online and store strategies across the organization. Retail software providing information technology organizations, once considered back-office utilities, have concurrently become strategic business partners.
These changes, in turn, have driven multiple new capital requirements. This creates a unique set of challenges for the CFO in migrating from historical investments to expenditures that will better support e-commerce and omnichannel enablement that will help reduce the overheads incurred from having more stores, carrying extra inventory, and relying heavily on single-channel distribution capabilities.
A greater return on capital in the Omni-channel era necessitates the need to adopt a multi-pronged approach and new ways of thinking.
The Seamless Omni-channel Customer Experience is not just evolving, it is expanding.
The growth of digital commerce is far outpacing traditional retail. This trend seems sure to continue as retail emerges out of the pandemic impact increasing the competition and putting additional pressure on their margins. Consumers can now shop through various channels, often using six or more touchpoints before making a purchase. Retailers broadly agree their organizations must deliver a consistent experience across each touchpoint.
Virtually all omnichannel capabilities require technology investments. Most are not channel-specific but instead impact the entire technology infrastructure. CFOs, however, are still determining how to best define the impact of these investments’ on sales by channel, which then makes measuring return on capital that much harder to calculate — especially at the channel level, due to lack of clarity around performance and management accountability.
As channels have blurred, time-tested retail metrics have lost some of their meaning and value. For example:
Each channel yields data that makes it easier to track customer behaviour, and marketers are using emerging sales attribution models to better allocate marketing spend. These models — single-channel, last-click, multi-touch, multi-channel, and the like — could be adapted for broader use in informing capital decisions as well. By getting more specific about where and how sales originate, finance teams can better estimate the real margins and profits from different touchpoints. This will lead to more informed decisions on how to deploy scarce capital.
Enabling omnichannel strategy through technology and measuring the impact
Capital allocations should align with business strategy, but technology changes so rapidly that it is tempting to take a wait-and-see approach. Delays, however, could put a retailer at a competitive disadvantage. Unified inventory management systems and integrated distributed order management systems are examples of platforms that harmonize order fulfillment, regardless of channel. Mobile investments can help retailers combine new digital strategies while providing experiences unique to mobile.
Other investments include:
The question is, which options are the most advantageous, and how do you measure the impact? In an omnichannel environment, parsing out returns and costs across the business becomes trickier:
The ongoing demand for investment coupled with less predictable returns on capital creates tensions for CFOs that will continue to increase as more consumer spending migrates to digital.
An approach to taking the lead
To implement a successful omni-channel strategy, retail CFOs should consider the following strategies:
Striking a balance
The transformative effects of digitization in retail will continue in the foreseeable future. The finance teams will need to redeploy capital from stores and inventory to riskier, hard-to-measure investments in new enabling technologies and related processes. As the leaders of finance organizations, retail CFOs will need to develop new tools, techniques, and skills to stay at the forefront of this revolution while still delivering attractive returns on capital.
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