The COVID-19 situation has resulted in significant changes in consumer behavior. Retailers must work hard to match the ever-changing customer experience expectations. Since the pandemic began in 2020, the market has been shifting. For an increasing number of consumers, shopping online has become their preferred method.
According to Statista, by 2023 the number of buyers will grow to 291.2 million in the United States alone. However, as per the annual State of Consumer Behavior report, 46 percent of consumers still prefer to purchase in-store rather than online when given a choice.
It indicates that customers are eager to return to brick-and-mortar locations when it is safe to do so again.
For many conventional retailers, digitalization never was a top priority. Covid-19 led to a significant increase in integrating digital sales channels into retail operations and providing various points of sale. For example, Macy’s converted parts of its physical stores into digitally-enabled shopping centers known as “Omniservice centers,” emulating the popularity of ecommerce.
So, how can brick-and-mortar retail shops maintain their retail dominance? By following the lead of ecommerce and keeping track of the essential lessons listed below.
Embracing digital channels to fuel retail growth
It’s no secret that ecommerce competitors hold a higher share of consumer spending each year due to their digital strengths.
Covid-19 has resulted in a significant four-year acceleration of digital shift, with both old-age and young consumers changing their behavior dramatically. Also, the ‘Future Business Models’ report listed several retail categories in which digital channels outnumber traditional locations. By 2025, roughly half of all retail categories will surpass the ‘conventional retail frontier’ with digital dominance.
Investing more in digital technologies offers brick-and-mortar firms an advantage to outdo competitors.
In a recent survey, the consultancy firm McKinsey discovered that more than a third of consumers never observe their most preferred technology, accessible when shopping. The technology primarily includes mobile payments and app-based ordering. It results in what the firm calls an apparent disconnect between what consumers crave and what retailers deliver.
To stay in touch with the customers, brick-and-mortar firms must utilize digital media too.
Managing Omnichannel Inventory
Most product-selling business owners today understand the concept of managing inventory and how it might affect their bottom line. Poor inventory management can result in undesired commodities, or the unavailability of items frequently in high demand. Product turnover can be increased by using effective inventory management.
According to a recent CapGemini and Oracle joint study, about 29 percent of retail stores claim a lack of inventory tracking across locations and warehouses. It affects their ability to ensure multi-channel fulfillment.
Effective inventory management assists organizations in tracking, managing, and organizing inventory sales and acquisitions throughout all channels.
The best aspect of these approaches is that they eliminate the need for old-fashioned spreadsheets to maintain inventories. With increased inventory management integration with POS software, CRMs, and marketing automation technologies, you can ensure consistent inventory and messages throughout your branded internet outposts.
Here are four additional benefits of managing inventory effectively:
- With streamlined service, smart inventory management tools can help brick-and-mortar retail win repeat customers
- With good inventory management software, brick-and-mortar shops can effectively organize warehouses
- With mobile warehouse technology and processes like barcode scanners, inventory management tools help improve business efficiencies to boost productivity
- Using an inventory management solution reduces any liabilities, especially loss to overstock. For example, a shoe business may order extra stock to meet customer demands while having a sale on a sandal. The technology will consider the sale before ordering more of the sandals based on the uptick in sales.
Meeting omnichannel consumer expectations is the only way to cultivate solid, loyal customer relationships. So, streamlining your inventory management process is critical.
Managing real-time, automated inventory across channels is one of the most essential lessons brick-and-mortar retail can learn from ecommerce platforms. If retailers wish to boost sales and increase consumer conversion, these solutions should be available in physical stores.
Like ecommerce, brick-and-mortar retailers can effectively utilize software or applications to track channel inventory levels.
Bonus Tip: Making data-driven decisions
Omnichannel retailers offer a consistent customer experience throughout their in-store and online sales channels, effortlessly connecting the consumer journey across digital and physical surroundings. And data is continuously used by these astute sellers to inform their business decisions.
Data is critical in selecting where to open new retail sites since they must serve in-store customers and those ordering at home. According to Gartner, by 2023, over one-third of major businesses will have data analysts exercising decision intelligence.
Tracking behavioral data in a customer’s path to purchase is an ideal approach to making your store like an ecommerce site. Digital-first brands have historically been better at getting to know their customers, staying ahead of the trends, anticipating changes, and using data optimally.
So, how can brick and mortar shops replicate those data-driven experiences in-store?
- Internal teams must become acquainted with data culling
- Brick-and-mortar stores must recognize the value of data-driven decisions by harnessing the power of data, analytics, and artificial intelligence (AI) to gain a competitive advantage. According to an Accenture study, AI can boost productivity by far more than 40%
- Retailers can also employ spatial analysis of an area to make meaningful, site-specific decisions and eventually choose the best placement for a new shop
However, data is only as valuable as the actions it motivates. Following in ecommerce’s footsteps, brick-and-mortar shops should make the most of their data to provide the personalized experience that today’s buyers receive online, along with new, data-driven services.
Otherwise, businesses risk falling behind emerging digital players who invest in physical stores with data technologies. These include VR/AR, AI/Computer Vision, and other forms of game-changing technology.
Offering Personalized Experiences
For years, ecommerce marketplaces added a customized touch to online purchasing, and brick-and-mortar shops can learn to do the same. Each web page visitor sees a different version of a successful ecommerce website.
A company that provides an excellent personalized experience is a preferred place of purchase by 80 percent of consumers. Moreover, according to McKinsey’s research, personalization can result in a 50 percent reduction in acquisition costs and a 5-15 percent gain in revenue.
Any customer engagement is tracked, evaluated, monitored, and converted into individualized suggestions thanks to omnichannel reach, beacons, loyalty programs, social media presence, or shopping applications.
After a positive experience, 83 percent of customers return to your store for repeat purchases. Customers understand that you are investing in their fulfillment by providing value beyond the items you offer when you break the norm.
Brick-and-mortar retailers can influence purchasing decisions by aggregating a feed of goods customized to customers based on past purchases and customer demographics.
Birthday messages with personalized discounts and adverts based on your browser history are becoming commonplace, even though they, too, are the product of personalization.
With best personalization practices, Adidas’ flagship store in Dubai mixes digital and experiential elements to stimulate creativity and increase brand loyalty.
Bonus Tip: Several ecommerce players deal with trend forecasting by setting up lean supply chains and integrating useful internal tools. On the other hand, brick-and-mortar stores broadly use pen and paper, spreadsheets, and bulky binders. If physical stores wish to compete with online stores, it’s time to equip in-store teams with the same degree of training, tools, and transparency as ecommerce teams. Also, stores can build employee scheduling software for retail to nurture efficiency.
Brick-and-mortar retail must play to its strengths as a physical store, while acknowledging its flaws.
Any retail strategy must be thorough, creative, and strategic to engage customers and produce revenue in today’s competitive economy. The in-store and online shopping interactions cannot be separated.
Fortunately, ecommerce ideas can be implemented smoothly in your physical store, transforming it into a competitive, digitized in-store experience.
The pandemic has undoubtedly accelerated the adoption of ecommerce, but rather than viewing this as a threat to brick-and-mortar stores, retailers should learn from best ecommerce practices. These practices range from inventory management, data-driven decisions, innovative tools, personalization, and embracing digital channels for omnichannel optimization.By guest contributor Rob Press.