A Kendra Scott store in Austin, TX (photo credit: Texas CEO)
The COVID-19 pandemic has made digital transformation efforts essential in retail’s next chapter. A report from the World Economic Forum states this imperative quite bluntly: Companies that do not digitally transform will fail.
As the nation prepares for a new wave of COVID-19 cases and more uncertainty, increasing economic pressures could put a strain on consumer spending. Retailers must prioritize digitalization and digital transformation efforts — and fast. While ecommerce has surged in 2020, it’s not nearly enough to offset the impact of the shutdowns many retailers experienced.
As the ability to digitally transform will be the difference between success and failure in retail’s next chapter, a digital-first approach must include omnichannel acceleration, inventory transparency and an emphasis on customer communication.
Below are 5 digital transformation pivots retailers should focus on now.
To build an agile, digital-first business, dissect online and offline processes: Consider what it’s like for customers who want to “pre-shop” a store before they visit it in person. Do inventory stock levels show up correctly online? Does the business support key in-store processes such as ship from store, pickup in store and curbside pickup? These flexible fulfillment options can make or break a sale for online shoppers. Additionally, retailers without delivery services already in place can consider partnering with third-party home delivery providers. It is crucial to be as accessible as possible.
Review your portfolio of physical stores and define the right role for each location: Although some stores may need to be closed due to low foot traffic or sales, other stores can be used as fulfillment locations. For example, some locations could be converted to dark stores or gray stores, whose only purpose is to hold or fulfill local orders or to offer a small selling space backed by a much larger fulfillment space. Another possibility is to use a storefront as a curbside pickup location for customers who don’t want to enter the store.
Re-balance planned inventory in stores to align with these roles: This should be revisited daily, especially as consumer behavior shifts, resulting in even more in-store or curbside pickup as holiday shipping deadlines loom. It is also important to consider how COVID-19 buying habits are impacting inventory needs. If a store is engaging in both fulfillment and in-store selling activities, retailers could pull items off the sales floor that do high volume through fulfillment and restock with items that need a sales boost from in-store shoppers.
Entice customers with new experiences and cross-sell/upsell opportunities: For instance, consider how in-store associates or fulfillment experts can engage customers with upsell or cross-sell opportunities as they collect an in-store pickup order. Another strategy is to offer impulse items near the curbside pickup tent for any BOPAC (buy online, pick up at curbside) transactions.
Think mobile-first to support the holistic customer journey: Explore how mobile can be used to enhance the customer experience — such as sending delivery updates or pickup instructions via SMS. Smartphones can also be used to deliver a safer, touchless and more efficient in-store experience. For example, a mobile app that allows customers to pick up an item in the store and scan it with their phone to make a purchase eliminates the need to queue or engage directly with staff.
These five purpose-driven pivots should serve as inspiration to help companies make the most of their physical and digital resources and to adapt their operations to new consumer buying behaviors in retail’s next chapter.
Nikki Baird is the vice president of Retail Innovation at Aptos