Winning formula for “the new retail normal” where consumers adopt more delivery, curbside and touchless instore buying
Rapidly shifting buying behavior
With the COVID-19 pandemic entrenched in our daily lives, the world as we knew it before the virus has been inexorably changed, perhaps forever. We have a new term in our vocabulary – social distancing – which has governed nearly every facet of our lives. There have been winners and losers and clearly one of the big winners has been online shopping which has experienced a major uplift thanks to the pandemic. Consumers are shifting more of their buying patterns from traditional in-store shopping to curbside, delivery and buy online pickup in store (BOPIS) channels. In a world where retail is already challenged, it is imperative that retailers recognize these new trends and move quickly and nimbly to support these new ways of shopping.
Let’s look at the numbers:
- the number of orders placed online and picked up at stores by customers surged 208% between April 1 and April 20 compared with a year ago, according to Adobe Analytics.
- April 2020 e-commerce sales for grocery home delivery or store pickup increased 37% over March sales, which were already at an all-time high, per Progressive Grocer.
- 75% of customers new to multiple delivery services (including Amazon Prime), said they were likely to opt for curbside delivery once the pandemic subsides, based on a survey by commercehub.com.
Dawn of a “new normal”
This behavior is likely here to stay, as a “new normal” in consumer buying channels emerges. Consumers have gotten used to the convenience of buying online, and even when they visit a store, they are increasingly demanding a touchless digital shopping experience. Consumers will pick their buying channel based on various factors – the product, the amount of time they have, their perception of risk of contact, and their familiarity with the brand, among others.
Traditional in-store experience
- I don’t want to mingle
- I want my product quickly
Deliver to home
- I want extreme convenience
- I want no mingling at all
Digital in-store Self Service
- I want to check myself out (touchless)
- I want to locate products easily
Retailers are taking notice of these changing buying preferences. As found in a survey done by RIS News, 47% of retailers offer BOPIS via counter pick-up, 44% offer curbside pickup, and 33% are setting up services now if they don’t have them.
The charts below, from RIS News, show how retailers are adjusting their model to meet customer demand.
New capabilities are needed to win in the new normal
These new ways to shop and buy have never been a priority for retailers for several reasons, top among them being that disconnected systems and processes led to poor ROI on digital channels. Even though the click and collect and buy online pickup in store models can provide retailers with new revenue stream, there are added costs, such as labor costs, that retailers must optimize in order to make these new models profitable . Grocers spend an additional $5 to $15 on every manually picked online order which in a market segment with ultra-lean margins, can mean the difference between making money and losing money on curbside orders. To help turn curbside into a profitable business, retailers need to look for systems and processes that enable them to gain a greater share of existing customers’ wallets while attracting, and retaining, new customers. They need to add fundamentally new capabilities that can help deliver an engaging and consistent customer experience while improving efficiencies needed to drive profitability.
Some of these new capabilities include:
- Real-time inventory visibility across all channels to ensure customer commitments are met
- An outstanding customer pick-up and delivery scheduling experience
- An intelligent work allocation process to ensure that in-store and pick-pack operations are optimized, weaving together various store tasks to drive operational efficiencies
- Ability to accept digital payments and issue digital receipts at multiple points of purchase
- Ability to collaborate with customers on their orders
- Ability to offer customer-tailored product recommendations, much like Amazon’s product recommendation features
- Customer loyalty programs that adjust and take advantage of new shopping models
- For customers who do visit the store, the ability to engage them digitally and provide a touchless shopping experience
In the U.S., Walmart and Instacart have taken an early lead in the grocery segment. Other retailers need to move very quickly to win in this new environment or risk being left behind as customers develop new loyalties. It is equally critical that this is done in an efficient manner, with a solution that communicates seamlessly with core IT systems and leverages the power of IT and ERP investments to maintain profitability.
Just another “consumer app” will not solve the problem
There are many solutions in the market that support this new customer behavior but in a disjointed and siloed manner, focusing only on the consumer’s user experience. These new solutions simply add another “app” to the burgeoning list of IT systems that the retailer already has, and do not address overall inefficiencies inherent in these new processes. This is just the tip of the iceberg; what retailers really need is a new way of connecting with customers before, during and after the sale in an engaging and efficient way. This means knowing the customer and anticipating her wants and needs through features such as buying history, clienteling, product recommendations, loyalty programs and product acquisition methods. It also means that the store operations need be reimagined to drive hyper-efficiencies across pick-pack, delivery, and other regular store operations.
Of course, these features need to enhance the shopping experience for the customer, provide tools to increase store associates’ efficiency and provide the retailer with critical shopping and buying data. A solution that includes support for curbside and delivery in addition to the abovementioned functionality needs to fit into the retailer’s existing architecture to drive efficiencies and reduce the number of solutions, instead of adding new ones. Retailers have invested heavily in their ERP platforms in an effort to gain some efficiencies and are not ready to start over, so any new solution introduced into the IT landscape must work seamlessly with existing systems while delivering new, much needed functionality.
Applexus Solution for Retailers
Applexus Technologies is meeting the needs of today’s omni-channel challenges with their revolutionary solution, SimpleRetail. SimpleRetail is a cloud-based, AI-enabled and omni-channel ready solution that addresses the new world of retailing. This powerful retail solution works both online and offline enabling retailers to access their store anywhere, anytime. Its multi-store, multi-user, e-commerce, loyalty-ready abilities enable retailers of all sizes to engage with shoppers on several levels. The solution provides an engaging, mobile-based digital shopping experience for the consumer while also improving efficiencies in store operations across all delivery channels.
SimpleRetail consists of the mobile-based consumer app, in-store apps that support the store associates and a backoffice module that supports corporate operations.