Stores have become an indispensable part of the omnichannel strategy in times of Covid: it is a place where parcels get prepared, sent or collected from. Deloitte believes this trend will continue. But how can it be done more efficiently?
86 per cent of retailers want click and collect
Out of necessity, many retailers discovered last year that the physical store could be much more than a contact point for customers. Lockdowns and Covid restrictions left retail outlets with a lot of unused stock, while online sales peaked. Retailers, from small boutiques to global players, were quick to put the pieces together. According to a survey, 76 per cent use the in-store inventory to process online orders, and this will become more common in the future, predicts Deloitte in the study “A road map for omnichannel fulfilment”: 86 per cent of retailers plan to offer in-store pickup by 2021.
Target even found a second wind during the pandemic: in the first quarter of 2020, the retailer processed 80 per cent of its online orders through its nearly 1,900 stores. The number of online orders picked up from the store has increased by 500 per cent compared to a year earlier. This is possible because the stores have also become small fulfilment centres. The American chain now wants to open even more stores, but smaller ones, in cities and on university campuses to allow consumers to pick up their orders.
Stockroom gets dusted off
Nevertheless, in-store fulfilment poses some challenges. Inventory management is the most obvious one. Unfortunately, real-time and accurate insight into stocks is often not available. To be able to truly track inventories down to the item level, Deloitte recommends innovations such as RFID tags, which are integrated into the packaging of products. Such solutions can also be seen in our new Retailhub knowledge centre in Antwerp, Belgium.
Next to that, it is about time to take a thorough look at the backroom of stores: often, stores’ stock areas are small and outdated, while within the context of fulfilment, they are playing a crucial role. Even partial automation can significantly improve efficiency: with new technologies such as heat mapping, embedded sensors, digital store tags and ‘internet of things’ solutions, the customer instantly knows where they can go and when, while shop employees can prepare orders in a matter of minutes.
One order, one parcel
But what if not all items can be found in a single outlet? Customers do not want to receive their orders split up over five deliveries. The PPO (Packs Per Order) ratio has an impact on customer satisfaction, as well as transport costs and labour efficiency in the supply chain. The closer the PPO ratio is to 1.00 – one order equals one shipment – the better it is for the customer and the more profitable it is for the company. However, in addressing this challenge, companies and retailers often approach their last-mile strategy as a last-minute matter, treating it as a logistics or distribution issue when it should be an essential part of the company’s strategy.
And what about the staff, who are, consequently, given an additional workload? Requiring staff to multitask can result in employees who have to do everything but fail to do anything. Experience has shown on more than one occasion that customers and employees get in each other’s way when picking orders and assisting shoppers at the same time. It requires thorough staff training, concludes Deloitte, preferably done in short and frequent training sessions.
Retail experience on a higher level
All things considered, the advantages outweigh the disadvantages. Retailers can invest more in in-store employees, who can provide better customer service. They can upsell at peak times and can take care of online order processing during quieter moments. Offering pick-up at the point of sale also increases visitor numbers and store sales, while reducing shipping and return costs.
Retailers who nevertheless conclude they have too many physical stores can turn poorly performing branches into “dark stores” where only fulfilment activities take place. By doing so, the online capacity quickly increases, while the transportation costs decrease thanks to these local hubs. In any case, according to Deloitte, in-store fulfilment is “a crucial step towards a higher level of retail experience.”
Do you want to experience the latest technology and trends for an omnichannel customer journey? Take your team on an inspiration tour, tailored to your company, in our fully renovated Retailhub in the Stadsfeestzaal in Antwerp. Discover the many possibilities of RFID, retail data, smart sensors and more, both for your back office and for the customer itself. Click here for more information and bookings.
