Let me start off with a true story. Earlier this year, my daughter started preschool, and along with that milestone came the dreaded school supply list. You read that right, my 2.5-year-old needed school supplies. So, one warm Sunday afternoon, I buckled her into her car seat and headed off to the local office supply superstore in the short window of time between when her nap ends and the store closes. When we arrived, we were met with a flurry of other parents and kids, lists in hand, dutifully shopping for the supplies they were sent on a mission to procure.
Most of the items were easy enough… glue, markers, safety scissors. But, there were a couple big-ticket items that I just couldn’t bring myself to buy. What the store had available was not exactly what was requested on the list (wrong colors or quantities), and they were mighty expensive for a preschooler. If you’ve ever shopped for school supplies before, then you know that you had best not substitute the white card stock that the teacher requested with ecru. I whipped out my phone, and did what most shoppers would do in the same situation: I looked for better options and prices online. This is shopping in 2018.
I found what I needed quickly, and at a fraction of the price I would have paid in-store. When I reached the end of the aisle with the rest of the items in my cart and an increasingly antsy 2-year-old, I saw the dreaded line-ups. I ended up abandoning the rest of my order, too, walking out of the store empty-handed. Instead, I placed my full order online, on my phone while my daughter played on the coin-operated rides in the mall, just outside the store’s entrance. I received the order on my doorstep less than 48 hours later.
What could my local office supply store have done differently to retain my business? It really comes down to mastering the basics of retail: right product, right price, with fast service.
Smarter Assortment Planning
The web has a distinct advantage over physical stores in that cyberspace is not limited by the physical confines of the four walls of the store. A physical store only has so much selling and storage space. While the concept of the “endless aisle” is hugely promising in terms of stretching those boundaries, there will always be customers who want what they want, when they want it, and won’t want to wait to have the item shipped to them. That’s actually a distinct advantage that physical retailers have over Amazon and other web retailers: the whole concept of instant gratification.
So, how can retailers make the most of the space they have to ensure that every shelf is stocked with items that will actually sell in that location? Smart retailers are embracing the concept of demand-driven planning and investing in tools that automate and modernize their purchasing, assortment planning, allocation, and replenishment processes. Spreadsheets aren’t cutting it anymore when it comes to crunching the massive amounts of data that retailers need to accurately predict and satisfy demand, so retailers need to invest in demand management solutions that were designed for today’s complex omni-channel market.
Competitive Pricing
Another advantage that online-only merchants have over physical retailers is lower overhead costs. They don’t need to pay expensive mall rent, heat, staff, etc. That means that the cost of doing business can be much lower. Unfortunately, and to put it bluntly, consumers don’t care. They want the best value for their hard-earned dollars and are often willing to wait a couple days for shipping in exchange for getting a great deal.
That doesn’t mean that physical retailers are doomed, though. What it does mean is that they need to be as smart as possible when it comes to devising and executing their pricing and promotions strategy. Retailers need smarter, integrated tools that allow them to consider the entire product lifecycle when planning pricing and markdowns. Promotions can be used intelligently to attack the competition while still incorporating the impact on margins into the entire retail planning process.
Convenient, Personal, and Expert Service
What went wrong in my school shopping debacle? Left to my own devices, I was unable to find the items I really needed, and the similar items that might have been “good enough” were priced higher than I wanted to spend. In the crowded back-to-school rush, I wasn’t able to find a sales associate to give me a hand and let me know if I was missing something. Perhaps the items I really needed were just stocked in an endcap or elsewhere in the store? Even if I had found them, though, and even if they were at a price I was willing to pay, the wall of lineups at checkout might still have been enough to dissuade me from completing the purchase. I’m not the only impatient shopper out there (truthfully, my 2-year-old was the impatient one that day): one study found that 4 in 10 shoppers have abandoned a purchase due to long wait times in checkout lines, and 86 percent avoid stores where they perceive the lines to be too long. Seventy-four percent said that they would shop at a competitor instead.
Aside from staffing up appropriately during rush periods, what can retailers do to ensure prompt service? Equipping staff with tools like mobile POS can not only help to bust queues but also enable associates to perform inventory checks, answer product-related questions, create and process orders, serve customers in a more personal manner, and much more.
