Tag Archives: retailing

Reinventing the Retail Store

Online orders are increasingly fulfilled through stores, making retailers much more efficient and competitive

Reinventing the Retail Store

GUEST POST from Howard Tiersky

I’ve worked with a lot of online retailers over the years, and a frequent question I’ve received is, “When you have physical stores and you also have an online presence, where should you be shipping goods from?”

In the early days, a lot of retailers were trying to ship from their stores because that’s where the merchandise was.

Further, these retailers didn’t necessarily have the infrastructure or process in their warehouses to ship directly to the consumer. Their warehouses were just for shipping goods to the store.

But when e-commerce started to take off in a major way and orders jumped, those retailers that we’d think of as traditional large brick and mortar stores started to do the vast majority of their e-commerce shipping from centralized distribution centers, so much so that some actually had quite different inventory from their stores.

As a result, there was a period where chains were shipping from centralized distribution centers for the most part.

In some cases, these chains didn’t even expose you to what was available in the store when ordering online.

BUY ONLINE, PICK UP IN THE STORE

After that, retailers started trying to show us alternatives.

“Buy online, pick up in the store” became increasingly prevalent, with retailers creating more integrated systems that allow us to see the online merchandise that may not be available in the store, as well as the store merchandise that might not be available online.

Some of the merchandise was available in both places, and you could at least see the full universe through these systems.

You would know if an item was carried in the retailers’ stores, then you could find out if your local store had it, buy it online, and arrange to pick it up there.

Once retailers got to that point, it became more and more logical to have the store ship at least some merchandise out, as they did in the early days.

And today, we’re seeing even more shipping from stores because e-commerce orders that are “order online, pick up in the store” have risen substantially with Covid.

With more and more orders being fulfilled this way, it’s imperative that stores are able to handle e-commerce effectively.

NEWFOUND ADVANTAGE

In fact, Best Buy reported recently that 60% of their e-commerce orders are either buy online, pick up in store or buy online, pick up curbside.

More than half of their online orders are not only being fulfilled through the store, but they’re actually being physically picked up at the store.

As physical retailers continue their effort to compete with Amazon, they realize that one of the assets that they have that Amazon does not have at that scale is a physical store location.

It makes sense to use this shift as an opportunity to either make it convenient to pick up items that are ordered online or even start to use stores as distribution hubs to permit faster delivery for items that are ordered to the home.

In their recent announcement, Best Buy also reported that of their thousand stores, they have designated 250 of them as distribution hubs.

This means that they will be using those stores not only as physical showrooms but also as fulfillment centers for e-commerce orders.

So if you order something on the Best Buy website, it’s increasingly likely to come from the back room of your local Best Buy.

DISRUPTIVE CHANGE

This shift is interesting because it’s not just Best Buy—we’re seeing it across the industry.

And when you have a lot of retailers repurposing their physical locations as e-commerce hubs, there are bound to be greater implications.

For one, this change is going to affect store design, as stores will need larger storage areas and shipping facilities.

As a result, the ratio of the back of the store to the front of the store will probably shift.

It may also make a shift in terms of how stores think about real estate.

A location that may not have been viable due to a lack of foot traffic may all of a sudden make sense if it’s in a convenient spot for pickup or in a central location that allows online orders to be distributed to a large geographic area.

In focusing more and more on fulfilling orders through their store locations, Best Buy may see additional, industry-specific benefits.

In the electronic space, we know that there are a lot of SKUs, and it’s hard to keep some items on stock, particularly the ones that are popular.

The opportunity to leverage not only the inventory at a warehouse or distribution center but all the inventory sitting in their stores expands Best Buy’s ability to provide a great customer experience.

Today’s top retailers are making sure that if they’ve got that new iPhone, or camera lens, or obscure cable, or whatever it is that you’re looking for anywhere in their ecosystem, they are going to find a way to get it to you one way or the other.

This article originally appeared on the Howard Tiersky blog
Image Credit: Unsplash

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Three Ways Technology Improves the Retail Customer Experience

Three Ways Technology Improves the Retail Customer Experience

GUEST POST from Shep Hyken

E-commerce hasn’t killed retail—it’s just transformed it.

For years we’ve been hearing that retail is dead, and the rash of store closures in cities across the country would seem to confirm the trend. The local mall no longer serves as a de facto community hub, if it’s even stayed open at all.

Given what we think we know, would it surprise you to learn that retail sales in 2021 were actually up more than 10% over the previous year, topping $4.44 trillion? Although fears of recession loom, the U.S. Bureau of Economic Analysis reports that both personal income and consumer spending continued to rise in June. And while e-commerce may be an unstoppable force, much of this consumer spending is still happening in brick-and-mortar stores.

That said, there’s no question that the retail experience is changing—and must continue to change. E-commerce growth and tech developments, in general, have transformed customer expectations. I always advise my clients to meet customers where they are, and where retail shoppers are right now is standing in an aisle, smartphone in hand, comparing prices and reading online reviews. Technology has become an integral part of the retail experience, and retailers would be fools to ignore that.

Luckily, they aren’t fools. Whether saving their customers time or offering them unique experiences, retailers are incorporating technology to improve the customer experience. Here are three ways they’re doing it:

1. Smart Screens Digitize the In-Store Experience – You probably remember the first time you went to fill your soda cup at your favorite fast-casual spot and found yourself facing a dizzying digital array of fountain soda choices. Smart screens are on the march, and they’re not just in restaurants anymore.

Clothing retailers are using touchscreens to help customers build their wardrobes, while furniture stores use similar tech to let shoppers design rooms in their homes. Smart screens can offer retail customers what they love about online shopping—plentiful product information, eye-catching photos and on-the-spot promotions—in an in-store setting.

Consider the cooler aisle at Walgreens, where high-resolution smart screens from Cooler Screens have transformed the drugstore chain’s fridge and freezer doors. Shoppers no longer have to brave an icy blast—they can see the beverages and frozen treats inside at a glance without even opening the door. Plus, they can get calorie counts and take advantage of instant deals—and soon will also see customer ratings and reviews.

Data showed that 90% of Walgreens customers prefer the new smart screen cooler doors to the traditional kind. For retailers looking to bridge the online/in-store gap, smart screens present the opportunity to both accomplish some point-of-sale digital marketing and enhance the customer experience.

2. Click-and-Collect Services Save Time – Another way retailers are meeting their customers’ hybrid shopping expectations is by beefing up their click-and-collect capabilities. Buying items online and picking them up in person offers consumers the best of both shopping worlds. They can browse a store’s product selection on their desktop or phone, and once their order is assembled, there’s no wait or shipping expense. Curbside pickup goes one better by allowing people to order products online and pick them up without stepping foot in the store.

I admit it’s not rocket science, but I believe that high-quality customer service depends on listening to what customers want, and many of them clearly value this hassle-free shopping experience. The 2022 Click-and-Collect Forecast shows that U.S. buyers will spend $95.87 billion via click-and-collect this year, a 19.4% increase over 2021. Retailers that expand their click-and-collect offerings stand to increase revenue by giving customers more of what they want.

Enabling this experience requires an up-to-date e-commerce website that’s optimized for mobile. Furthermore, retailers will need to achieve seamless integration between their online shopping platforms and on-the-ground operations. Many are already adapting by adding more parking spaces for click-and-collect customers and hiring more personal shoppers to gather orders.

3. Self-Service Improves Convenience – Another thing the e-commerce revolution has changed is customers’ expectations of self-service. From product page to shopping cart to checkout, the typical online shopping experience is a solo affair. While a retail store offers the possibility of assistance from a real person, many shoppers would rather take care of themselves. Smart retailers are using tech to let them.

Digital self-service kiosks help in-store shoppers get their bearings, look up product information, scan prices and see whether the item they want is in stock—and order it on the spot if it’s not. Retailers’ mobile apps enable customers to locate products, read reviews, compare prices and pounce on in-store discounts. By offering the right tech assistance, retailers give their customers a sense of control.

When customers think of self-service, self-checkout is usually the first thing that comes to mind, but even that is evolving. Going beyond the usual “Scan your first item and put it in the bag,” Amazon has launched fully autonomous checkouts. In its Amazon Go stores, customers scan a barcode going in and get charged electronically for purchased items as they leave. Instead of making customers do more work, Amazon employs its “Just Walk Out” technology to make customers’ lives easier and the retail experience friction-free.

Technology has greatly impacted people’s lives, and the retail setting is no exception. Retailers that use tech to improve the customer experience will see increased profit and customer satisfaction. Research has shown that experiences increase happiness more than things, so retailers that can provide both are setting themselves up for success.

This article originally appeared on Forbes

Image Credit: Shep Hyken

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Followup – Following the Line to Innovation at Costco

Followup - Following the Line to Innovation at CostcoDuring the winter holiday shopping season in 2007 I was suspicious when a man at Costco asked if he could scan my Costco card while I was standing in line, thinking that he was going to try and sell me on their executive card. I was pleasantly surprised when he then scanned my items with a portable scanner/computer and gave me a slip of paper to alert the cashier that he had done so.

It is a pretty simple system:

  1. Scanner/Computer reads my Costco account number and creates a record
  2. It then associates the item numbers scanned with that record, and sets a flag in the system that this temporary record exists on my account
  3. Cashier enters my Costco account number and retrieves my account
  4. The flag in the system enables the cashier to transfer the scanned item numbers into a live order
  5. The cashier verifies the number of items
  6. The cashier processes payment
  7. The system deletes the temporary record

I thought “wow!”, this is brilliant, this is exactly the type of potential process improvement that I’ve talked about before, most recently in Following the Line to Innovation (a November 2007 refresh).

The fact is that when it comes to busy holiday seasons, Costco and all other retailers have a fixed number of registers and the cashiers can only scan items and process payment so fast. If the cashiers only have to process payment and maybe throw a few things in a box, then the throughput of each cashier increases and lines become shorter or non-existent. This appears to be a new process to accommodate the increased volume of shoppers that all retailers experience during the holiday season, but the process could be even better.

Normally when I go to Costco there is a cashier working busily and a box person working less frequently. It seems to me that this scanner/computer task could become the normal job responsibility of the box person. If the jobs were re-distributed then maybe the non-holiday throughput could be increased and possibly free up people for other tasks.

All I know is that I was a happier customer that day. And–as I’ve said before–by making more efficient use of waiting time, companies can potentially decrease costs and increase revenue at the same time, while also increasing customer satisfaction. What can be better than that?

Innovation Training for your whole organization from Braden Kelley

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