The decline of brick-and-mortar retail has long been discussed in the industry, to the extent that some alarmists started to talk about its inevitable death. However, recent reports of Amazon’s plans to create a network of physical retail outlets demonstrates that in-store shopping is far from ending up on life-support. In fact, brick-and-mortar retail still remains strong among consumers, and for retailers it continues to be a critical way to connect with customers and drive sales.
The ‘great disrupter’, Amazon, has revolutionised the way people shop online over the last twenty years to become one of the largest retail groups in the world. So, what does Amazon creating a physical store presence mean for retailers?
Until now, established brick-and-mortar retailers’ primary defence against the eCommerce giant has been their local store presence. The ability to be close to shoppers and offer a physical shopping experience that allows consumers to interact in-person with retailers in real-time has for many stood out as a better customer experience. However, once the ‘moat’ (or point of differentiation of having physical stores) starts to be breached, defending the ‘castle’ against Amazon becomes much more challenging.
Amazon is very good at what it does and bringing a digital-first approach to brick-and-mortar retailing will introduce new, creative and technology-centric options for the consumer. In addition to the purchase of Whole Foods and its partnership with Kohls, this latest move into the physical retail space by Amazon clearly validates that physical stores are a vital element of the omnichannel shopping experience.
Amazon’s push to develop physical stores means that all retailers need to go ‘all in’ on omnichannel. To survive the next phase in Amazon’s evolution retailers should prepare their systems and processes for a new marketplace that will be dominated by those brands that are able to deliver seamless, personalised shopping experiences simultaneously across physical and digital channels.
But what does this mean for Asian retailers today? How can they create omnichannel experiences that engage with and maintain customer loyalty in the face of new competition from Amazon?
Modernise the customer journey
The rise of online shopping, click and collect and the world of social media has transformed the buying experience. Customers have access to information, expertise, and validation at every step of their online journey, but today they want an in-store and offline experience that complements and meets the same standards of excellence they have already experienced online. Whether it’s an in-store associate tracking down stock in another store and organising delivery to the customer’s home, allowing a customer to return online purchases without complication in-store, or ringing the call centre to change an existing order mid-delivery – today’s consumers expect service excellence at every stage of the purchase cycle, including in-store and on the phone.
The problem is, many retailers still perceive the customer journey to be one that is linear, when that’s not the case. Customers often flit between in-store and online, with social feedback, phone interaction and email for communication. Consumers do not always buy where they browse, instead looking in-store and then buying online or vice versa, and then if they change their mind they expect to be able to arrange a return via email, chat, phone or in-store. Retailers must be aware of this and provide solutions to meet customer expectations.
Store associates today need applications that give complete command and control of the customer buying experience, as well as all store inventory and fulfilment functions. From mobile checkout to guided fulfilment and inventory location notification, when provided with the right technology store associates are made more efficient and are better able to serve customers and meet their needs.
Seamlessly manage customer orders
Never has omnichannel execution played such a significant role in determining a retailer’s brand image. Consumers now expect retailers to provide seamless, ‘buy and deliver or pick-up anywhere’ experiences. To compete with Amazon across all aspects of retail, brands need to consistently meet the delivery promises they make to customers and ensure that the turnaround between order and delivery is shorter than ever.
To assist, new business-to-consumer distribution models are coming to market, with a core focus on the importance of ‘living’ the omnichannel customer experience, rather than just talking about it. One such model is Order Management Systems (OMS), which integrate all sales and distribution channels into one place, bringing absolute transparency and making it easier for retailers to manage customer orders. An OMS helps retailers to see what inventory they have where, what’s been allocated, what is in transit, what’s been sold, what is available, what needs to be replenished and what’s being returned.
Manage business disruption, customer expectations with an OMS
Innovation is occurring in the retail sector at an unprecedented pace and increased competition from Amazon will only speed the adoption of new systems to meet customer demand.
Without this push towards efficiency-boosting technology, retailers risk being left behind the competition. With innovations like advanced OMS, retailers have been able to navigate disruptions caused by COVID-19 by reviewing the rules of stock allocation, temporarily giving priority to in-store stock over warehouse stock, thus, freeing up any trapped inventory confined within closed stores. This is a great advantage for the many retailers whose physical stores have been closed for long periods during lockdowns.
Optimising order sourcing allows retailers to use the stock available in their entire network, wherever it is located. A smart OMS allows retailers to use the ‘pool’ of physical stores in large urban areas to offer same day, or next day delivery by couriers, whilst also favouring the warehouse stock for less immediate orders. This increased delivery efficiency will help build a stronger connection and more favourable brand perception amongst consumers.
In addition to using store level inventory to ship orders to a customer’s home, it can also be deployed for click-and-collect orders. With new fulfilment options enabled by the store, consumers can click, collect, and return goods at their own convenience, which works to achieve satisfaction in the short-term, as well as long-term loyalty.
If you can’t offer seamless shopping experiences, someone else will
The importance of brick-and-mortar retail to the overall equation of profitable sales is (again) attracting renewed attention following the move by Amazon to create its own store network. In fact, it makes sense for Amazon to create a store presence, given that stores themselves create the conditions for a sale. The experience that consumers can be given in-store is often more immersive, tactile, and engaging. These more emotional connections can lead to immediate sales and an increase in long-term loyalty.
However, the increased competition that will come from Amazon establishing their own in-store presence means that Asian retailers need to focus on meeting customer demands through technological innovation. Customers expect seamless, personalised shopping experiences across all physical and digital buying channels today and you can bet that if you can’t offer that, Amazon definitely will.
By Richard Wright, Managing Director, SEA, at Manhattan Associates
For more information on how your retail outlet can create seamless shopping experiences across multiple channels, please visit: https://www.manh.com/en-in/active/omni