July 16, 2018 by Jim Bengier, Chief Customer Officer
Where will shipping materials be stored? Who will train store associates how to package fragile items so they don’t get damaged? These are just some of the change management considerations for Ship from Store.
A retailer’s greatest liability is their inventory. It represents a huge capital investment. One on which the return must be maximized. Yet competition in retail is fierce. And not just because of downward pressure on item prices. Rivalry now includes the cost of delivery, consumer expectations for fast delivery, and their unwillingness to pay for speed. Thanks Amazon. So, what can multi-channel retailers do?
In the quest to compete with Amazon’s fast delivery speed, stores are a key advantage. Ship from Store, where ecommerce orders are shipped from a local store to the customer, is one of the fastest growing trends in retail. Stores do double duty as mini Distribution Centers (DCs). And it’s not surprising. With at least 80% of their inventory in the stores, at a location so close to customers, it is a great way for retailers to deliver faster, and for less money. Think about Walmart in the United States…
Their 4,700 stores are located within a ten-mile vicinity of 90% of the U.S. population. This means delivery from a Walmart store to a customer would be a fast, and easy way to reduce shipping costs. Now, not all retailers have 4,700 stores. But if they have more stores than DCs, there are still many advantages to Ship from Store. For instance:
But the complexity of Ship from Store should not be underestimated. Implementation requires store associates to learn new processes and skills. And like any other omni-channel fulfillment initiative, preparation is key. So here are some change management questions to consider:
Ship from Store is the most complex of all store fulfillment. Stores were not designed to be distribution centers. They were designed for cash and carry. But it’s a great option to leverage all inventory within the omni-channel journey. And with ‘Ship from Store’ you can take full advantage of your entire store network to fulfill online orders. To learn more about Ship from Store change management, please Contact Us.
June 27, 2018 by Jim Bengier, Chief Customer Officer
When she gets to the store to pickup her online order, will the pickup experience inspire additional purchases?
57% of online shoppers said they had picked up an online order in a store in the last year according to results of a study published in August 2017. And in-store pickup is a great way to drive traffic into stores. In fact, 71% of customers will make an additional purchase while in the store.
But if your customers have an unsatisfactory in-store pickup experience, there’s a good chance they’ll skip the additional purchases, which will impact the return on your Buy Online Pickup In-Store (BOPIS) investment. So, in this article, the second in a series that started with Buy Online Return in Store: 15 change management questions to consider, we’ll cover some change management questions that will help you craft a high quality pickup process.
To make it easier, we’ll align the question with the 3 different approaches to Buy Online Pickup In-Store, in order of complexity:
This is the simplest model. Orders are shipped directly to store, from the DC, pre-labeled with the customer’s information. Store associates do not have to pick orders, so business disruption is minimized. Key change management questions include:
Drop shipping is a popular way for retailers to provide an expanded assortment without owning the inventory. Drop ship to store offers this same inventory expansion, but with the added benefit of driving store traffic. It works particularly well when the drop shipped item is part of a bundle of products ordered by a customer, for example:
This way, the customer visits the store once and receives all their items at the same time. But to successfully receive in-store pickup orders from multiple sources (which may have inconsistent packaging and labeling) requires some additional thought. Change management questions for this use case include:
This is where things get tricky. Why? Because, while inventory accuracy in a well run DC is usually good, stores are a different matter.
Inventory moves from the backroom to selling floor, rides in carts, is abandoned in fitting rooms, or placed on random shelves by customers. And whether your revenue is $200 million or $12 billion, the number one challenge when fulfilling orders from store inventory, is inventory accuracy. Without it, you’ll have canceled orders which result in customer disappointment, and lost sales. So when you start preparing to pick orders from store inventory, consider how best to achieve the inventory accuracy you’ll need to ensure success. Some important initiatives to consider include:
Other change management questions you’ll want to address are:
As you can see, in-store pickup has some complexity. But it’s a great stepping stone on your journey to offering ‘Ship from Store’ after Buy Online Return In-Store. And with ‘Ship from Store’ you can fully leverage all your inventory across your entire store network to fulfill online orders. This let’s you minimize markdowns and reduce inventory carrying costs. In the next article in this series, we’ll look at some Ship from Store change management questions. In the meantime, if you’d like to learn more about BOPIS change management, please Contact Us.
June 11, 2018 by Jim Bengier, Chief Customer Officer
If she can’t return her online purchase in-store, she may not buy it at all.
The retail race for digital supremacy is on. While so many have filed for bankruptcy protection, or closed stores, the trend is clear. Retailers who invested in tech early are doing well. Those who didn’t have struggled to keep their customers excited and engaged with their offerings.
And what’s number 3 on the list of ‘Top 10 Technologies for 2018’ according to the 2018 RIS/Gartner Retail Technology Study? One of our favorites: In-store pickup/return. But technology is just a tool. And while multi-channel customer experiences require a robust, well integrated technology stack, it is not enough by itself.
Yet all too often retail technology implementation plans fail to allocate enough time and resources to another essential component: Change management. But without good business processes, and employee training and engagement to support your technology, you can’t achieve maximum return on your digital investment. According to the study, “Change Management” was ranked number 6 of the ‘Top obstacles over the next 18 months’. And we have seen this first hand.
Retailers have bought software, underestimated the change management involved, then shelved the software (i.e., they paid for it, but didn’t implement it), because they failed to scope out the appropriate level of change management required to make the project a success before making their technology investment. What a waste!
We’d like to help you avoid that situation. So, in this series of articles, we offer you some questions to consider when designing your change management program.
Buy Online Return In-Store (BORIS) Change Management Questions
As you can see, there’s a lot more to ‘Buy Online Return In-Store’, than just connecting your eCommerce and Point of Sale system with an Order Management System. Next in our series, we’ll look at In-Store Pickup Change Management: 35 questions to get you started. In the meantime, if you have any questions about returns change management, feel free to contact us.
May 9, 2018 by Jim Bengier, Chief Customer Officer
The new Retail CX is a Shared Experience: a blend of the customer’s Retail and Brand experience.
In today’s market, Retailers must provide a superior Customer Experience to survive. They continue to fight to attract and keep more customers by making them feel special. Armed with data analytics, marketing insights, and artificial intelligence tools, retailers constantly tweak their messaging and pricing to attract customers and increase basket size. But one could argue that how you SERVICE your customers is just as important, possibly more so, than how you attract them. The days of personalized customer relationships and doing ‘out of the ordinary’ events are returning.
But, hasn’t retail always been about the customer? Isn’t the customer #1 or king? These questions are easy to debate in today’s world where technology has replaced interaction. What customer doesn’t use technology in their retail experience. Many retailers have invested in sales associate customer assistance devices. These hand-held units provide store associates with product and customer information. The value of sales associates and their necessity may be changing, but as new technology like Amazon Go becomes more affordable the game may change.
What is a Shared Experience?
A “Shared Experience“, SX, between manufactures, retailers and customers is the evolution of Customer Experience. Technology is designed to connect, communicate, and share. These three capabilities will continue to change the game. Imagine if the manufacture, retailer and customer were willing to fully integrate this concept. The retailer buys from the manufacture and once the delivery is made the relationship shifts from the manufacturer to the customer. The manufacture, if they are correct, may be lucky enough to get another order. The three are never connected in the experience.
SX for Out of Stock Recovery
Silos don’t work, and providing a shared experience is hard. Manufacturers make what retailers or customers request. The shipment is made, invoices submitted, and the manufacturer is off to the next season. The retailer is challenged to have the item in stock, at the correct price and size. At best, they may be able to achieve this 80-90% of the time. The latest trend is to share the customer’s data for the next season. But historical data doesn’t always predict future trends.
In a perfect world, the retailer would have access to every item and size from the manufacturer. This model is conceptual, but possible. Think of how often you have been at a store looking for a particular branded item that is not in stock. The brand manufacturer and the retailer generally lose the sale. If a store doesn’t have an item available, why can’t the retailer order it from the manufacturer and have it sent from the manufacturer to the customer’s home or nearest store? Since out of stocks are a top influencing factor, dissatisfaction and frustration destroy brand loyalty. In fact, studies have discovered that 91% of customers don’t want to engage with a business anymore once they’ve had a bad experience with it.1
Shared Experience Agreements
The technology for SX out of stocks is available, but the manufacturer and retailer struggle with who owns the customer, and the revenue. Silos get in the way of taking care of the customer and the experience falls apart. The SX fails because of the lack of an integration, agreement and process. Manufactures who are willing to satisfy the customer in this process will increase brand loyalty. The store made the sale and the manufacture fulfilled the sale. Revenue is generated versus lost for both parties.
In the SX world, the manufacture, retailer and customer all win.
1. “The Out of Stock Problem and How To Approach It”, Streetspotr August 2017
Filed under: Retail
February 5, 2018 by Jim Bengier, Chief Customer Officer
Amazon prides itself on the customer experience and Amazon Go delivers, but in a different way. The line is no longer at the register but is at the door! The Amazon Go store has a capacity limit and sales associates restrict how many customers may enter. Even with the line at the door, the process was very quick and seamless.
Customer convenience is at an all-time high and no one likes waiting for a cashier to scan their items. This process is so simple at the Amazon Go store. You simply scan your bar code upon entering, and place items in your bag or hand. Leave the store through the designated scanner and the transaction is complete.
I tried to put an item in my jacket, pick up an item and replace it on the shelf at a later time and re-enter with items purchased. But I failed to trick the system. Each item was correctly accounted for on my receipt. This seems to be shrink proof!
Filed under: Retail
December 22, 2017 by Jim Bengier, Chief Customer Officer
hether you’re a retailer, distributor or brand, how well you deliver orders matters. So here are 8 predictions for 2018 that will impact your Delivery Customer Experience (DeliveryCX):
1. Sales via Amazon
76% of online shoppers said they would do most of their shopping on Amazon during the 2017 holiday season.¹
Expect to see: More retailers and brands listing their products on Amazon and using Amazon Fulfillment services.
2. Same Day Delivery
Expect to see: More retailers leveraging their store inventory to offer same-day delivery.
3. Real-time Delivery Status
Just like Amazon Prime has shifted expectations on delivery time, apps like Uber have shifted expectations around delivery details.
Expect to see: Uber-like maps with real-time tracking on package delivery, especially for same-day deliveries.
4. Increased RFID Adoption
The decline in RFID prices, combined with the increased need for inventory accuracy, results in more retailers rolling out RFID solutions.
Expect to see: More retailers implementing RFID to support their ship from store initiatives.
5. More Marketplace Sales
Third party marketplaces, like Amazon and Walmart, expose your products to a larger audience (and can be a great marketing tool). Self-hosted marketplaces let you expand your assortment without increasing your inventory carrying costs.
Expect to see: More brands and retailers either selling on third-party marketplaces or launching their own.
6. Loyalty based delivery perks
Nothing delights a customer more than receiving their order ahead of schedule, and who better to reward than your most loyal customers.
Expect to see: Dynamic preferential delivery perks based on loyalty.
7. Maintenance Subscriptions
Subscriptions move beyond makeup, shaving supplies, and grocery. Think ‘Home Maintenance’ (like bi-annual smoke detector battery replacement, air and water filters, driveway salt, etc.) or ‘Car Maintenance’ (like windshield wipers, antifreeze, oil, filters, etc.)
Expect to see: More subscriptions geared towards automated delivery of regular maintenance products.
8. Bitcoin Won’t be a Mainstream Payment Method
Cryptocurrencies aren’t design to support canceled orders and refunds. This, combined with their high volatility, will prevent mainstream adoption in the short term.
Expect to see: Big fluctuations in cryptocurrency values over the next 12 moths, and more time needed for them to become a mature payment method that can support canceled orders and returns.
June 16, 2017 by Jim Bengier, Chief Customer Officer
Competition in the Grocery eCommerce and fulfillment market will increase as grocers scramble to provide customers with more convenient ordering, pickup and delivery options.
rocery look out! Whole Foods Market will add over 430 stores to Amazon’s already superior fulfillment network. It will also provide Amazon with access to more grocery purchase history data than ever before. And you know they’ll use it well. So, what’s in it for Whole Foods?
A reduction in supply chain and distribution costs will let them drop prices (and maybe steal back some organic food market share from Kroger). And if they leverage even a fraction of Amazon’s eCommerce knowledge and experience, they will no doubt dominate the online grocery segment. But given Amazon’s commitment to continuous innovation, it won’t stop there.
Combine this with:
The grocery industry is about to get a shakeup. So, what can you do to compete?
1. Buy Online, Pickup In-Store
Offer Buy Online, Pickup In-Store, sometimes called Click and Collect. Your customers receive all the benefits of same-day or next-day groceries without a delivery charge. Whole Foods Market may have 430 stores, but for now, many of you still have the local advantage. Use it to build loyalty while you can.
And if you really want to win them over, offer curbside pickup. Ideally a covered drive-through to protect customers and employees from the weather. Combine this with delightful customer service at pickup and your customers with young children or physical disabilities will rave about you.
2. Real-Time Substitutions
Your store associate is picking an order for pickup. An item is out of stock. Can they contact that customer immediately? Via text or phone? If so, they could offer (and get approval for) a substitute product in real-time. You save a sale, the customer is happy, and there is little extra work required by the store associate.
3. Dynamic Scheduling and Delivery Pricing Model
Grocery delivery can be expensive. But a dynamic model can help manage that cost. How? You can incentivize customers to select a non-peak delivery window by offering a lower delivery cost. This helps you manage the impact on your stores, and leverage off-hours labor for delivery orders.
4. Subscription based orders
With subscription orders, a single purchase decision equals many transactions. You only need to convince or entice the buyer once. And it doesn’t just benefit your top line, it can also provide customer insight that can be used to improve inventory forecasts.
5. Integrate your offline and online loyalty programs
Your customer data is a huge competitive advantage. Use it well. If you integrate your loyalty card data with your ecommerce platform, you can provide better online product recommendations and promotions.
In short, the time for change is now. Can you afford to be left behind? If you need help crafting your grocery fulfillment strategy, contact us today.
May 23, 2017 by Nicola Kinsella, Director of Marketing
Over 3000 store closures have been announced for early 2017 and more bankruptcies are expected.
Retail is in trouble. Bankruptcy filings and store closures abound. According to Bloomberg, as of April 24, 14 retailers had announced they were seeking court protection in 2017, including The Limited, Wet Seal, BCBG Max Azria. Gymboree and Rue21 are also in danger. And over 3000 store closures have been announced for early 2017 according to Business Insider.
It’s not surprising given the U.S. has so much retail space. Business Insider recently noted that “The US has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia, the next two countries with the most retail space per capita.”
Clearly something needs to change.
Meanwhile online sales continue to grow. But can they grow fast enough? Is B2C enough? Some retailers are hedging their bets.
While Staples revenue has always been dominated by B2B sales, they’ve typically marketed to consumers. However, their most recent marketing campaign, “Staples – It’s Pro Time”, is clearly designed to boost the profile of their business division according to Retail Wire.
Lowe’s has long served contractors, but the recent announcement of the acquisition of Maintenance Supply Headquarters, in addition to the November 2016 purchase of Central Wholesalers, both distributors of Maintenance/Repair/Operations (MRO) products, indicates a renewed focus on the professional contractor market.
Meanwhile, J.C. Penney CEO, Marvin Ellison (formerly at Home Depot), is also betting on B2B. Targeting the hospitality industry, they will sell bulk linens, towels and appliances directly to hotel operators and property management companies through a new B2B interface that allows for typical B2B purchase options including volume pricing, commercial credit, and tax exemptions.
The B2B Opportunity
Will J.C. Penney craft deals with hotels whereby customers can order in-room soft goods and appliances from their hotel room and have them shipped to home? Will other retailers look for opportunities to enter the B2B market? Will fashion apparel retailers enter the business uniform market? Only time will tell. But retailers who want to enter the B2B market will need to adjust their model.
B2B is different to B2C. A business customer will need a company account and multiple users associated with that account (procurement, accounts payable, etc.). After login to an online store, they’ll want to see bulk pricing, or custom pricing that reflects pre-negotiated discounts. And they may require support for purchase orders and net terms. But while these changes require adjustment, the payoff could be large. Or in the case of some retailers the difference between bankruptcy and survival.
Filed under: Retail
May 17, 2017 by Jim Bengier, Chief Customer Officer
“We’re out of stock at the moment, but I can ship it to your home.” – Enabling store associates to recover from out of stocks is one of 5 great ways to recoup your Order Management investment.
he heart of any omni-channel strategy is order management. But, implementing an omni-channel strategy designed to meet the customer’s expectations while making money can be a challenge. The customer continues to demand more for less. According to a recent PwC and JDA Software survey, only 10% of retail CEOs say they are able to make a profit while fulfilling omni-channel demand (you can read more here). Where is the Return on Investment (ROI)?
Here are 5 ways a retailer can achieve a positive ROI with Order Management:
Regardless of the retailer, out of stock inventory is always an issue. An automated capability to locate, reserve, fulfill and restock inventory, not only increases revenue for lost sales, but increases customer loyalty. As retailers add channels the placement of inventory becomes more difficult. Predicting supply and demand across different channels regardless of the planning and allocation tool is a huge challenge. These issues can be mitigated when an associate can find the merchandise, and reserve it, or have it delivered to the customer, regardless of where the transaction originated. The inventory visibility by location is one of the greatest attributes of order management. Fulfilling from an overstocked store reduces markdowns and increases revenue.
Many companies, such as Walmart, take orders online and ship the merchandise to the store for pickup. Having the customer visit the store for pickup results in an additional 25-35% increase in the purchase. This revenue increase, along with a transportation decrease (as the merchandise can be shipped on the usual DC-to-store truck), results in a strong ROI. With an order management solution, it is possible to aggregate store replenishment inventory with online orders. At the DC, the customer pickup order can be clearly marked and identified for staging versus store stock.
In many cases, the customer wants to see or try on their merchandise before completing the transaction. But, they don’t want to make the trip to the store unless the item of interest is available in store. CEOs surveyed said 51% of their companies plans to allow customers to buy online and pick up in-store in 2017, up from 47% last year. According to a Harvard Business Review survey, omni-channel shoppers who engage with retailers through online and offline channels spend 4% more, on average, every time they visit a brick-and-mortar store, and spend 10% more when shopping online. Order management provides the tool to orchestrate the demand in the store for pickup. This capability adds fulfillment flexibility while leveraging store inventory driving up return on assets.
On average retailers have an 8% return rate. Retailers selling shoes, apparel, and electronics have anywhere from 10-17% rate. In the PwC and JDA survey, 75% of respondents said their online operating costs are increasing because of costs related to omni-channel returns. And 77%% said customer returns were eroding profits. Since customers expect free returns, profits can be diminished by 10-20% per year. Order management provides the store with customer history so that the associate knows the customer. A good associate can turn a negative experience into a positive one by offering the customer a complementary item to something they may already own. They also can reduce fraud by having a complete view of the customer’s transaction.
Many retailers are looking to use their stores to compete against Amazon. Their stores have become fulfillment centers or mini distribution centers for online orders. This process is an extension to the BOPIS process as an associate not only picks the merchandise, but they also ship it to the customer. Order management is the tool that provides the capability to pick, process, confirm the order for payment. The store uses order management much like a distribution center would use a warehouse management solution. But, it goes one step further by providing complete access and visibility to the order status. The customer knows what is happening at all times. BOSFS is a transportation savings tool by having the stores closest to the customer fulfill rather than paying shipping from the distribution center.
Using order management for these 5 business models, delivers ROI by having inventory visibility, leverage inventory, fulfill profitably, increase revenue and customer loyalty, and reduce shipping costs.