Why in-store fulfillment is a must for retail & how to pull it off with less resource strain

Photo by: https://burst.shopify.com/@matthew_henry

Today’s customers are looking for a seamless purchasing experience, whether that’s in-store, online, or a combination of both. But the so-called “last mile” — the time it takes for a shipment to reach a customer —can be a thorn in the side of a retailer. Enter in-store fulfillment. 

Benefits of in-store fulfillment

curbside fulfillment - girl  wearing mask holding shopping bags sitting against her open trunk

Mounting shipping costs are costly for retailers who are reluctant to pass them along to customers who are looking for the best price for every item, as well as free shipping. 

By offering in-store fulfillment, the delivery process can be seamless as customers choose from curbside delivery, click and collect, and buy online/return in-store options. 

Employees can address customer requests in real-time, monitor inventory, and deliver attentive service.

In-store fulfillment means retailers no longer have to route products exclusively to a warehouse.

Nordstrom and Kohl’s are excellent examples of putting the strategy into practice. 

They can fulfill orders from the store closest to the customer’s location, leveraging their stores as fulfillment centers and shipping orders directly to customers, reducing costs and speeding up deliveries.

Requirements for in-store fulfillment

sales associate executes sale fullfullment using Retail Pro Prism POS

While the benefits are clear, implementing in-store fulfillment requires an omnichannel strategy in which inventory data is tightly integrated across ecommerce and the in-store POS

Ship-from-store, ship-to-store, and in-store pickup can then be handled with one solution that optimizes in-store inventory usage and reduces the time and cost for fulfilling online orders.

Perhaps the most daunting part of the process is getting a 360° view of inventory by connecting data from e-commerce sales with in-store transactions. 

Determining the correct timing for syncing online data and orders with in-store POS is vital; solutions can be configured to sync data at any interval, including real-time, hourly, nightly, or at other intervals that make sense for a retailer’s operations and network capacity.

If syncing lags, inventory can fall behind, and there’s a risk of selling out of products that have already been committed to online orders. 

With seamlessly connected channels, shoppers can buy products online and pick them up in the store that same day. 

Store associates can receive pick lists to select and package the products ordered online. 

Selecting off-the-shelf products increases inventory turn and decreases the duplication that comes with holding a separate online order inventory.

In-store fulfillment completes the frictionless purchasing experience. 

Customers get quick, free delivery — often receiving their items even faster than ordering online. 

Retailers, in turn, move inventory more rapidly, helping to maintain price stability. 

Both shoppers and retailers benefit from a more efficient customer experience.


DTC brands have a big impact on traditional retail

modcloth, bonobos and jet logos in a walmart shopping cart, harry's, casper, and care/of in target shopping cart. DTC brands impact traditional retail

Direct to consumer (DTC) products have been wildly popular in the past few years, and as they slowly infiltrate big box retailers’ shelves, brands such as Casper, Harry’s and Bonobos are gaining more attention and getting an even bigger sales boost.

But traditional retailers are learning from them as well.

For the biggest retailers, partnering with DTC has been mutually beneficial. Walmart bought men’s fashion retailer Bonobos in 2017 for $310 million. Target is partnering with Harry’s to sell the well-made, discount-priced razors in stores, as well as Casper mattresses — which can also be found in top-tier stores such as Nordstrom’s.

Mutual gains

two businessmen shaking hands - DTC brands impact traditional retail and it's mutually beneficial

Part of the draw of those and many other DTC brands is their popularity: They will drive customers into stores and online. Forging partnerships with newer, more sought-after brands helps retailers attract and create relationships with a new segment of shoppers who may not have otherwise shopped with them.

In addition, what big retailers such as Walmart, Target and Nordstrom’s can gain from well-established DTC brands is digital expertise. These products have successfully launched and sold products online with no physical stores. They are marketing powerhouses, and big box stores are learning from their strategies, particularly for their own private-label merchandise. For example, Target’s partnership with Harry’s spurred it to step up its men’s grooming selection by expanding its own Goodfellow & Co’s offering to more than 30 products. (Target is clearly focusing on the segment and rounding out its offerings by also incorporating Ulta Beauty shops this year into 100 locations this year.)

Fluid shopping

dark skinned woman with big short curls wearing orange shirt shopping on laptop on couch, DTC brands impact traditional retail - teaching big box stores about online marketing

What these relationships mean for consumers is that brands and retailers are becoming more attuned to the future of shopping. Customers are fluid in how they want to shop: One day they may opt for a personal, immersive experience at Sephora and the next they’ll order lipstick online. Convenience is a driving force, but it doesn’t always mean ecommerce. Sometimes, convenience is the ease of being able to go to a physical location and try on, inspect, and ask questions.

Successful retail has always meant providing what customers want, when they want it. Today’s technology merely widens the possibilities, and requires retailers to be intuitive and flexible.


Specialty brands partner with big box retail to boost foot traffic—and sales

It’s a retail conundrum: Foot traffic in malls is decreasing, and brick and mortar stores are losing ground to ecommerce – yet shoppers still want to visit stores to touch and try out products before buying.

To capture more sales and remain relevant to shoppers, big box stores are thinking out of the box and partnering with popular name-brand product manufacturers.

Bringing Apple to you at Target

rendering of mini apple store in all white target store with light wood kiosk  and shelves. Featuring black male worker behind the kiosk in red shirt wearing a mask greeting a white lady customer wearing a mask approaching
Image from Target

Target recently announced it will double the size of Apple’s footprint in 17 locations, expanding offerings in stores and online. In addition, Target team members will receive specialized training from Apple.

The retail behemoth has also partnered with Ulta Beauty to open 1,000-square-foot beauty shops, which will be staffed with Target employees who have been trained by the beauty retailer.

Notably, Ulta also provides customers with many services such as in-store hair salons, which drive considerable foot traffic: Salon customers reportedly make twice as many trips to an Ulta Beauty store as those who do not use those services.

And Target isn’t the only big box store looking to pretty itself up: Kohl’s will open 200 “Sephora at Kohl’s” locations this fall, with at least 850 locations planned by 2023. The cosmetics retailer will launch on Kohl’s website in 2022, offering more than 100 beauty brands, some of which are exclusive to Sephora.

Products across price points

smiling blonde salesgirl in all black holding product up for a customer

The beauty segment is notable because America’s department store makeup counters have historically been the place to purchase upper-end cosmetics.

The American beauty counter is iconic.

However, they’ve gradually been losing popularity as shoppers prefer to visit specialized retailers – such as Ulta and Sephora – which can provide a more extensive variety of products at different price points.

However, by collaborating with those same cosmetics retailers as well as be increasing their in-store footprint, department stores could win back many of those customers.

Department stores are using the popularity of brands such as Apple, Sephora and Ulta to lure customers back into their stores.

Once inside, the customers can be tempted to continue shopping for other products.

In a way, department stores function like mini-malls: From motor oil to bikinis to wrapping paper, these stores have it all.

The tough part today is getting the shoppers to come into the store.

The addition of top brand names will help provide the visibility needed to get shoppers in the automatic door.


Post pandemic, big retailers think small

couple pan shopping wearing masks
photo by Anna Tarazevich

One of the big reveals during the past 13 months is that people need (and want) to shop, and that e-commerce filled that desire both for necessities and luxuries.

Small, neighborhood businesses with no online presence had the toughest time surviving, while online stores with brand recognition — ironically, often due to a brick-and-mortar presence — fared the best.

Most strikingly, big, traditional shopping mall “anchor” stores felt the sting of greatly reduced foot traffic, while also enjoying a significant uptick in e-commerce revenue.

For example, Nordstrom forecasts sales to increase more than 25% this year, with digital accounting for roughly half of all revenue. Malls have been losing foot traffic for years. Moody’s industry research arm Real Estate Solutions (REIS) forecasts that malls vacancy rates will reach 14.6% by the end of the year as retailers regroup post-pandemic and reconsider their store locations.

Brick & mortar format shift

two young women wearing face masks in a concept nike store look at a jacket one is holding up
Photo by RODNAE Productions

And yet, customers consistently report enjoying an in-person shopping experience. Nothing truly can replace an experience of being able to touch and feel merchandise.

A case in point is the venerable Macy’s department store, a 162-year-old retail institution, which announced a year ago it would be closing 125 stores in “lower-end” malls during the next three years.

Macy’s strategy was to focus on locations with stronger sales as well as online operations. Then came lockdown and the pandemic era, and as shoppers tried to avoid malls, stores found ways to adapt.

Macy’s mall exodus is not unique; Dillard’s, J.C.Penney, Kohl’s, and Belk are also reportedly looking at freestanding and strip center locations.

Nordstrom, too, has been successful with its small format stores and intends to continue expanding those outlets along with its digital presence as part of its “Closer to You” long-term growth strategy.

Small stores, customer-forward strategies

Photo by Taras Chaban

According to reports, the stores will have full-service and possibly self-checkouts as well as same-day deliveries.

In addition, they will offer “buy-on line, pick-up in store” or “click and collect” service, which often comes with curbside pickup.

Such smaller stores are embracing the concept of offering a curated product selection, a characteristic more often associated with luxury stores. It provides these large retailers an opportunity to be flexible, react more quickly to buying trends and become more relevant to today’s clientele.

By showing a willingness to experiment with innovative merchandising ideas, these prominent retailers may not only rediscover their place in the industry, but also once again become leaders.


Gartner: Retail’s role in sustainability improvements

woman shopping in store

Increasingly, retailers are learning that sustainability matters to their customers, and the COVID season did not stop sustainability efforts.

Recycling, energy conservation and reduction of waste are all everyday topics of conversation.

That desire to help conserve Earth’s resources has helped unite customers who may otherwise be very different from one another.

To meet the increasing requests from customers for carbon-neutral packaging and products, retailers are offering more environmentally friendly options. Gartner has recommended three ways retailers could improve sustainability within their supply chains: source responsibly; use recyclable or minimal packaging; incorporate “recycled goods” into product offerings.

Source Responsibly

Image:  Tom Fisk 

Retailers can choose vendor and distribution partners who practice sustainability.

When reviewing vendors, retailers can weigh sustainability as quality.

Sustainability includes processes that mitigate the harmful impacts of pollution and waste on the ecosystem, including reducing freshwater contamination and greenhouse gases.

Retailers benefit too, because sustainable practices such as decreasing energy usage, cutting back on waste generated and eliminating equipment for pollution control lower operating costs.

Packaging

Image: Karolina Grabowska

Many suppliers are coming up with innovative packaging to reduce waste.

For example, dental floss can now be purchased in reusable glass vials, rather than hard plastic packages.

Not only has the product cut back dramatically on waste, but because of its very nature, it creates its own pool of customers who return to buy the floss replacement on a regular basis.

On the recycling side, L’Oreal cosmetics will market its first cosmetics in recyclable paper bottles to consumers this year.

“Re-commerce” Goods

Image: Nataliya Vaitkevich 

Thrifting — or shopping secondhand—is in vogue, and not solely because items are bargains or bespoke.

Because these goods are living a second life, they aren’t taking up room at the local landfill.

In addition, significant amounts of resources are saved by not creating a new product. For example, making a pair of jeans uses approximately 1,800 gallons of water.

The production process also generated greenhouse gases equal to driving more than 80 miles.

A number of retailers are focused on the “re-commerce” market, such as ThredUp and Poshmark, but some clothing brands including REI and Patagonia are selling their own gently used clothing, similar to the way in which luxury automobiles have sold “certified pre-owned vehicles” for many years.

Retailers wanting to strengthen or embark on a sustainability program should ensure their suppliers are committed to the same long-term vision.

Increasingly, customers are looking to buy from retailers and brands that share their values, and that includes companies that recycle, reduce waste and promote sustainable business practices.


Retailer innovations during COVID aim to keep customers happy

Excellent customer service has always been the hallmark of well-established, highly respected retailers.

Nordstrom’s, Zappos and Trader Joe’s are a few of the best examples of retailers that make concerted efforts to make and keep customers happy.

Before 2020, many retailers were happy to let those top-rated companies be the standard bearers for superior customer experience.

Meanwhile, many retailers continued servicing customers with no real CX roadmap.

It appeared to the uninformed that the return on investing in the customer service wasn’t worth the time and money spent.

And, the truth was, mediocre customer service was tolerated – until COVID came and retailers were forced to answer a deluge of customer questions and provide new services without much preparation.

In 2020, customer service became the only thing that mattered to customers.

COVID led to an expanded definition of customer service

Image: Anna Shvets

Shopping last year meant dealing with lockdowns caused by COVID-19.

The global pandemic made getting to stores difficult, so, at first, many if not most customers were ordering online.

And while those retailers may have believed they dodged the CX bullet, they were in for a surprise.

Retailers learned the customer service is not simply to answer questions about shipping and billing, but it is also to offer information and help for those struggling with the Coronavirus.

Customers may be desperately searching for products or information on payment options because can’t pay a bill, or are otherwise frustrated by the pandemic hindrances to getting products they need are reaching out via texts, online chat and phone calls.

This year, Forrester predicts customers will continue to look toward retailers for sympathetic customer support.

Forrester Principal Analyst Ian Jacobs recently wrote, “With U.S. unemployment peaking in April, millions of individuals found themselves struggling to pay for food, bills, and other necessities. Organizations must react to provide high-quality, emotionally sensitive customer support in the flexible ways that consumers need.”

In Forrester’s retail predictions for 2021, Jacobs said digital customer service interactions will increase by 40%. That gives retailers many more chances than ever before to prove their mettle.

Self-service options improve customer experience

One way to improve CX, ironically, is to offer more self-service opportunity.

Customers have reported liking to use self-service options, if the process is quick and easy.

In a word, it must be frictionless. For example, a capable site search tool can be invaluable for customers.

Likewise, chat bots are particularly helpful for providing succinct answers quickly; in addition, bots with the power of artificial intelligence bots can reflect whatever personality a brand wants to project.

Adding relevant services based on discerned customer needs

Image: Laura James

Another way to differentiate customer service is to launch a virtual service based on fulfilling a defined need.

Online pet supply provider Chewy, for example, has seen a huge surge in business during the coronavirus pandemic.

But its newest offering, a telehealth service for pets, was launched in response to customers telling service agents about their pet’s problems – while they are ordering food, treats, toys, etc.

The virtual service was on the roadmap for years down the road, but the company saw the need was for now, and launched in October.

Which services will carry on beyond COVID?

Image: Anna Shvets

This year, consumers will let retailers know which innovations will “stick,” and become part of their future shopping expectations.

Top of mind are questions such as: Will the evolution of click and collect to curbside delivery remain a shopping option? Will jewelers continue to offer virtual consultations? How will retailers be able to support the expansion of the sales channel without spreading their staffs too thin?

Those and many others will be answered by 2021 shopping patterns. And perhaps some new “kings of customer service” will be crowned.


Contactless payment and Augmented Reality: CX aids during COVID

Image: Karolina Grabowska

During the past year, brick and mortar retailers have struggled with encouraging people to visit their stores while keeping them as safe from COVID-19 as possible.

In addition to limiting the number of shoppers inside and enforcing mask-wearing mandates, contactless payments and augmented reality have suddenly seen significant growth as aids to shoppers’ experience in stores.

Contactless payments

Image: Cottonbro

According to the “Visa Back to Business Study – 2021 Outlook,” 56% of consumers have used contactless payments whenever possible in the past three months, making it the biggest shift in terms of shopping habits during the pandemic.

This past June, only 20% of SMBs had offered contactless payments; a few short months later, 39% have started to accept new digital forms of payments.

And a vast majority — 74% — expect consumers to prefer contactless payments once a vaccine is widely available.

In fact, the study found that 65% of consumers said that post-vaccine they are likely to continue to use contactless payments at least as much as they are currently.

Those numbers skew by generation: Millennials are the most likely to embrace contactless payments.

However, all age demographics seem to have a level of interest in contactless payments, perhaps due to the sanitary nature of the system.

Because of its wide acceptance—61% of Boomers have expressed a preference for contactless, according to Visa—it is likely here to stay.

Augmented Reality

Image: Fauxels

With consumers preferring to avoid contact even briefly during the payment process, it’s no surprise that dressing rooms are standing empty or even locked.

However, shoppers who try on clothing are much more likely to buy, so some retailers have replaced their shuttered fitting rooms with virtual ones.

In-store, shoppers can stand in front of a camera and see themselves on a large screen. They then select different products for their virtual self to model, allowing themselves to see exactly how they’d look in the selected outfit without having to try on a single piece.

Those mirrors could one day be linked to social media, which will provide an enriched interactive experience.

For retailers with an online presence, adding a dressing room widget to their websites allows customers to upload a single photo to instantly see themselves in selected clothing.

Using augmented reality to facilitate virtual try-ons also helps retailers reduce return rates.

As they head into 2021, retailers will be further developing those types of technology solutions, which helped get them through the pandemic.

Strategies that include contactless payments and AR will find expanded uses as the economy reopens in the second half of the year.


US retail’s recent rush to adopt contactless payments

Image: Pixabay

The COVID-19 pandemic has motivated retailers to turn to technology to help their businesses plan better, increase productivity, and service their customers.

Contactless payments are one of the areas that, because of COVID-19, will change forever the way retailers do business.

Safer and faster checkout

safe retail shopping during COVID
Image: Anna Shvets

These RFID-enabled payments have been available for years but have surged in popularity during the pandemic.

Not only is contactless more hygienic – in the time of COVID-19, no one wants to touch cash that’s been touched by hundreds of strangers – but it also streamlines the entire checkout process.

While the pandemic may have provided a strong push toward a cashless society, customers could still choose to use a traditional payment card, rather than NFC technology, and be safer from virus exposure during the transaction because they are operating the card reader rather than handling cash.

However, because they use radio-frequency identification, contactless payments reduce time waiting in lines.

The “tap-and-go” process generally results in speedier transactions. While the transaction time for a chip-enabled card can take as long as 30 to 45 seconds, a contactless transaction can be as short as 10 to 15 seconds.

Global adoption of contactless payments

Contactless transactions build upon RFID and typically use NFC technology, the foundation for services such as Apple Pay and Google Pay.

Globally, this method of payment is very popular. 

The United States, however, has been slow to adopt contactless payments.

In 2018, only 3% of cards in use in the United States were contactless, compared with 64% in the United Kingdom and up to 96% in South Korea, according to global management consulting firm A.T. Kearney.

Even prior to the pandemic, Juniper Research reported that contactless payments would triple to $6 trillion worldwide by 2024, up from roughly $2 trillion this year.

OEM mobile wallet transactions were predicted to increase as banks expanded the use of contactless cards. 

In the U.S. market, contactless transaction values were expected to rise at an even higher rate than the global market, reaching $1.5 trillion by 2024, compared with the approximated $178 billion in 2020. 

Once COVID-19 hit, contactless payments began to surge.

By August 2020, the global contactless payment market was valued at $ 1.05 trillion by 2019 transaction value, and is now predicted to register a compound annual growth rate (CAGR) of roughly 20.01% between 2020 and 2027.

Today, the global contactless payment market value is expected to surpass $ 4.60 trillion by 2027.

Customers have enough friction getting out to the store today. By offering contactless payments, retailers can provide an efficient, safe method for purchasing goods and services while enhancing the customer’s overall experience.


3 Operational benefits of 5G-powered IoT interconnectivity

5G networks have rolled out in only a handful of U.S. cities, but that momentum is growing.

Recent research from Barclays Corporate Banking suggests that 5G could supercharge the UK economy by up to £15.7 billion per year by 2025.

The technology is 20 times faster than 4G and will connect not just people, but interconnect and control machines, objects, and devices as well.

That speed, coupled with virtually no latency, means the new networks will nearly eliminate lag time.

1. Improving communications along the supply chain

For supply chain management, 5G provides greater connectivity and reliability, which will lead to improved communications between brands, transportation, and consumers.

While the technology will transform warehouse management through the use of the internet of things, artificial intelligence, and robots, it will also improve the in-store customer experience.

Providing 5G connectivity in physical stores means Internet of Things (IoT) devices can easily communicate on a fast, reliable network that doesn’t require too much power.

Because of their low power consumption, 5G networks can provide up to 10 years of battery life for low-power IoT devices.

2. Optimizing inventory visibility and management  

Image: Polina Tankilevitch 

Technology such as smart shelving, which uses many sensors to provide real-time inventory visibility and pricing updates, as well as dynamic pricing, automated checkouts, connected fitting rooms, and automatic replenishment will benefit from 5G networks.

In addition, the boost in speed will power retail analytics, inventory visibility, demand forecasting, and endless aisle technologies.

The faster network will enable more accurate real-time data to flow, ultimately facilitating smarter, more robust systems.

More operational and inventory decisions will be handled by automation.

Inventory, for example, will be tracked more quickly and accurately, which will improve forecasting quantities.

Sales associates won’t have to do manual inventory counts and can spend more time interacting with customers.

Having the right amount of stock on hand increases customer satisfaction, because — thanks to accurate inventory counts — products will be available on demand.

3. Boosting digital connectivity

Image: Gustavo Fring

5G promises to facilitate a whole new world of digital connectivity.

Mobile shoppers will benefit as the paths to purchase in even the busiest of stores will be smooth.

5G also offers low power consumption (a 90% reduction in network energy usage from 4G) and high reliability, which makes it well suited for the retail space.

For example, in China, the Shanghai Lujiazui L+ Mall uses the 5G digital indoor system, network connectivity across 12 floors and more than 140,000 sq. meters of floor area.

5G enables the connection of more devices than 4G and improves the responsiveness of wireless technologies.

Because of its ability to improve backend processes through its support of IoT devices, as well as the overall customer experience, 5G technology will rock retail’s world.


Curbside retail: here to stay, and simpler with Retail Pro Prism POS

Thinking out of the box and providing new ways for customers to connect with retail has long been critical for businesses to maintain loyal shoppers as well as to attract new prospects.

Sometimes, circumstances such as COVID-19’s mandated social distancing are the impetus for lasting changes.

Many retailers have had some omnichannel presence, but others have had little or even no experience; both groups have had to innovate and create new ways to connect with customers during COVID-19, many of whom wanted to shop but were reluctant to mingle with the public at large.

As a result, retailers’ new strategies are catering to those unique, and challenging, requests.

At a time when many are feeling overwhelmed, retailers that can offer convenience will be rewarded by shoppers.

Curbside pickup is one convenience strategy that has been refined in recent weeks and is likely to remain long after shoppers’ fears about going into stores have subsided.

Curbside: the final BOPIS frontier

Image: Gustavo Fring

Prior to March, many large retailers offered the ability to buy online, pickup in store (BOPIS).

The strategy lets customers shop round the clock, and then during business hours take delivery of the products at the retailer.

It may save the customer some time, but it’s more likely simply enabling a “time shift”: Instead of shopping for two hours between 10 and 8, BOPIS customers might shop for an hour online at midnight, and then stop on the way home from work to retrieve the items.

However, “stopping off” used to mean find a parking spot, enter the store, find the pickup location and finish the transaction.

All those steps ate up precious time.

Simplifying curbside pickup with Retail Pro POS

Retail Pro Prism mobile point of sale

Integrating curbside pickup into the process has made BOPIS much more efficient for the customer; the pre-ordered product is simply delivered to the customer waiting in the car.

That last step makes BOPIS far more convenient, and Retail Pro Prism mobile POS makes this step more convenient for your team.

With Retail Pro Prism you get the same deep functionality on any device you use – whether mobile or desktop, Apple, Android, or Windows – so your associates can meet your customer at their car with their order, POS in hand. This is useful for orders that were reserved online and still need to be rung up.

Customers who have been shopping with you online during COVID-19 may also bring returns with them when they come to pick up their order.

With Retail Pro Prism mobile POS, your sales associate can complete the return on the spot with the customer’s receipt. If the customer forgot their receipt, you can easily look up the transaction from the system or just look up the item in your inventory and enter it as a return transaction.

You can even sign your customer up for the integrated AppCard loyalty and rewards from the curbside.

Retail to go

Image: Christina Morillo

The number of orders placed online and picked up at brick-and-mortar stores by customers rose 208% between April 1 and April 20 compared with a year ago, according to Adobe Analytics, which measures the web transactions of 80 of the top 100 U.S. internet retailers.

If retailers keep the curbside option once they fully reopen, it will provide yet another delivery channel to their most busy customers.

Texas governor Greg Abbott recently allowed nonessential retail stores to start offering curbside pickup, or, as he called it, “retail to go.”

Even before the economic shutdown, some pharmacies were offering curbside service, such as CVS.

However, the drugstore chain didn’t offer the service at all of its outlets, and it was relatively unique in offering it.

Pre-COVID, curbside pickup was nowhere near as popular as it has become.

Looking into the future, it seems logical customers will want to retain this new convenience.

Convenience is going to drive the economy in the coming months, and possibly years.

While born out of necessity, customers are going to consider a once-novel curbside service part of the “new normal” retail experience.