Tobias Hartmann, VP for Client Success, Operations and International at eBay Enterprise discusses the way retail supply chains are evolving, and how you can stay relevant in an omnichannel world
The pistol has been fired in the race towards omnichannel retail. Capabilities that were once thought to give a retailer an edge – multichannel delivery, m-commerce, same-day delivery – are now seen as routine. The upshot of this is that delivery is playing a big part in the revamped high street, and here is how.
In-store fulfilment will drive the evolution of stores
Click-and-collect announced itself last Christmas as the stress-free way to navigate the festive high street. In fact, John Lewis reported that click-and-collect orders accounted for more than half of its online Christmas sales. Research from eBay also showed that one in four click-and-collect visits drove £27 in additional spending at Christmas, giving retailers an improved bottom line as well as increased consumer convenience.
Ship-from-store, the in-store fulfilment method that turns high street outlets into mini-distribution centres, is also gaining ground. As well as making deliveries quicker and more efficient in larger geographies, our research also shows that ship-from-store represents the biggest revenue impact of the various omnichannel fulfilment methods available today. Retailers can improve their bottom lines by 20% by using ship-from-store to better balance store inventories, reducing the need for discounting and improving stock availability.
Far from killing off the high street, omnichannel retail will give it a fresh sense of purpose; led by in-store fulfilment, stores of all sizes will act as mini-distribution centres. Larger key location stores will act as digitally enabled brand showrooms, where well-informed, tablet-wielding staff will be able to troubleshoot customer queries and enhance customers’ product interaction.
Apple is an obvious example of how stores are adapting. Its branding is consistent and distinctive across all stores, and last summer it even patented its store layout. In an omnichannel high street that emphasises brand engagement, layout will become an increasingly integrated part of retail strategy to help consumers connect with brands. This emphasis on customer connection will increase the importance of one-to-one engagements between consumers and employees, which will be enhanced using digital innovations. One example of of this is the interactive fitting room mirrors that Rebecca Minkoff installed in its New York store, which are facilitated by store assistants. These mirrors allow consumers to pre-book their items to try on using the mobile app, receive tailored recommendations and even seek opinion on outfits from their friends on social media.
The move towards a circular supply chain
Increased omnichannel volumes create a ripple affect that has led to more returns, and retailers need to see these returns as a source of competitive advantage. Retailers should extend the omnichannel philosophy to reverse logistics, by adopting a “buy anywhere, return anywhere” approach and enabling stores for returns from sales across all channels. Encouraging in-store returns allows retailers to convert refunds to exchanges, creating an additional incentive to invest in well-informed staff that can engage with consumers. Locker delivery locations and collection points can also double up as drop-off points for returns to make the process as convenient as possible.
Omnichannel retail has removed siloes between points of sale and fulfilment, and is starting to do the same for outbound and inbound logistics. Rather than analysing the separate channels, retailers should consider the entire supply chain, creating mirrored flows going in both directions. Deeper logistics partnerships will allow for improved data collections, where both partners share a commitment to compiling and sharing data. This circular supply chain is constantly evolving, and every consumer interaction should be seen as an opportunity to gather insights that can be used to improve delivery completions or move stock back into the supply chain faster.
The modern retail world has a single goal – to offer a single, customer-facing brand across all channels. This means removing distinctions between points of sale and inventories to allow a complete, company-wide view of stock. While this sounds straightforward, it requires managing the whole retail ecosystem. This requires retailers to accurately track stock, stores, payments, carriers, warehouses and customer data.
Enter the order management system (OMS). This piece of kit is the “brains of e-commerce”, and allows retailers to connect supply to demand for buyers across all sales channels to determine the best source of inventory for every order received.
As in-store and online sales continue to become more sophisticated, the importance of the OMS will grow massively. We can’t predict exactly what the future of delivery will look like, but we can almost guarantee that “brains of e-commerce” will become an even more important tool.
Omnichannel retail is evolving at a breakneck speed and order volumes are shooting up. If retailers take a systematic approach to consolidating data across all touch points, it allows them to optimise each customer’s order and stay on top of macro trends. This leads to an efficient, insight-led and consumer-friendly service that is centred on customer convenience. Retailers that sit on legacy infrastructure and ignore this opportunity could wake up to a new retail landscape that no longer needs them.