4. Same-day fulfillment is mission-critical
Ecommerce giant Amazon is the current master of same-day fulfillment, but other big-box retailers including Walmart, Nordstroms, Macy's and Home Depot have realized they need to get shorten their supply chain as much as possible by opening up localized fulfillment centers, says Robert McCarthy, Technical Advisor at Mobiquity. “This is a radical shift from the old days of centralized fulfillment, and it’s a result of consumer expectations – they see it, want it, purchase it, and demand it on the same day,” he says. That fulfillment can either be shipment to the home, or in-store pickup (click-and-pick conversion), but the fulfillment centers need to be geographically close to make this happen.
5. Personalization must be real-time
“It’s important to capitalize on shoppers’ interest while it’s hot – not the next time they visit or an hour later – otherwise a sale could easily be lost,” says Andy Zimmerman, CMO at software provider Evergage, whose clients include retailers RueLaLa and Gardener’s Supply Company. There’s no doubt that customers want a higher level of real-time personalization as they shop – a 2015 Accenture survey found that nearly 60 percent of shoppers want real-time promotions and offers. “Leading retailers are using technology to serve up customized experiences and recommendations to visitors based on who they are, what they’re doing and, most importantly, their intent at that moment,” says Zimmerman.
6. Stores need to reflect local preferences and products
Large retailers spent 2015 adjusting their offerings to better cater to local customer needs, hoping to keep shoppers from going to multiple stores and boosting loyalty, says Riyad Tahir, head of Xerox’s Retail and Consumer Practice. This requires lots of technology adjustments to accommodate local product acquisition: “Making local products available in a big box retailer creates both labor and technology platform challenges since smaller vendors typically don’t have high-end digital platforms for the administrative processes needed to deliver, check, approve and charge for, and re-stock product inventory,” he explains. In addition, once stores are localized, the head office is challenged to audit, enforce and track how each store is laid out: “Retailers can use video analytics and data analytics to create unique store profiles from a footprint and fixture point of view and indicate what merchandise is where – so it can be tracked and measured.”
7. Testing and learning using data is a must
Retailers came up with lots of ideas in 2015. Many, however, may look great on paper, but not work in practice, says Jonathan Marek of Applied Predictive Technologies, a data analytics firm that works with retailers such as Lane Bryant, Wal-Mart, Lowe’s, and Staples. That’s where testing and learning comes in: “In order to know which ideas will be winners and which will damage profitability, the smartest retailers are using business experiments to find their true incremental impact on profits,” he says. For example, Chico’s learned recently that a more aggressive promotional strategy was not profitable and Lane Bryant learned that they should merchandise sports bras and tops together but not pants. “We expect retailers to continuing testing in 2016 across new products and categories, improving the in-store experience, omnichannel strategies, targeted outreach and more,” says Marek.
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