The current health situation has unraveled business processes and societal norms alike, leaving retail—an inherently social industry built on the exchange of physical goods—in a state of flux. We are calling it the "New Next" because let's be honest; there is nothing normal about this unfathomed event and no clear roadmap for what lies ahead.
Customers are perpetually changing the way they shop, challenging retailers to create a whole new set of KPIs that need to be monitored and a new set of business practices that have yet to be defined. As retailers work through new scenarios, they must move quickly to take advantage of opportunities as they appear. Regardless of revenue size or segment, the core business model has shifted and speed is a board-level conversation.
While the path ahead is unknown, it is the continuous reinvention of the landscape and the commitment of brands to adapt and evolve that will define the next era of retail. These strategies can help retailers plot a steady course and find their way through uncharted territories. Just as a compass can help us orient ourselves in unfamiliar surroundings, technology can help retailers make sense of the situation and make more informed choices in the face of uncertainty.
So, how can retailers navigate the New Next? We aimed to answer this question in detail via our Resource Center. Still, at a high level, we see retailers re-optimizing inventory, safely re-opening stores, and expanding customer journeys to leverage their investments differently to meet demand. Beyond the tactics, retailers must now embrace three key strategies to lead in a time of change.
Pivot to Customer
The customer is more important than ever, and their journey continues to be rewritten. Retailers must resist the urge to shift the focus inwardly and continue to invest with intent. They have the opportunity to reinvent the business processes to harness the power and value of physical and digital together. The key to success is finding an equilibrium to achieve a single view of inventory, customers, and orders. With expanded offers and new delivery expectations, such as buy online, pick up at curb, or one-day local delivery, the physical store's role has dramatically increased and plays a pivotal role in delivering in the last mile of retail.
So how do retailers put the customer at the center of everything they do, from designing and developing the most innovative products to attract and retain your customers? It is a constant balancing act between art and data science to deliver the right merchandising mix to attract and retain customers. Smart pricing and optimization strategies leverage analytics, data science, and demand forecasting technology to attract customers. By personalizing the experience with relevant offers and maintaining an outward focus, the retailer will be rewarded with loyal shoppers and continued revenue.
Retailers need to shift to an agile mindset across the retail enterprise. They need to manage unknown demand with finite resources and capacity. By adopting agile business processes and operational models, businesses can protect margins without sacrificing customer service by mapping inventory strategies and the supply chain to meet demand.
Consumer shopping habits, needs, and expectations have shifted. The consumer journeys are no longer predictable, and the retailer needs to prepare to respond accordingly. The sales associates' role has expanded, and they need to be as flexible as the processes retailers put in place to support the New Next.
While store floors begin to slowly reopen, retailers will discover and redefine unique ways to leverage the storefronts, warehouses, inventory and their teams to satisfy customer demand. Historically, a dark store referred to how commerce orders were fulfilled. Today, a dark store serves a different purpose. A modern dark store operationalizes your physical stores to become fulfillment centers and associates will play new roles in the process to meet demand. With a single view and transparency of real-time inventory, retailers can see what product is sitting where. This insight can be used to determine the most efficient and cost-effective means to get it to the customer fast.
Trust and Transparency
Trust is a contract that continually needs to be revisited, nurtured, and renewed. Trust means something new and deeper today than before the crisis. Previously, consumers expected brands to comply with vital things like labeling and trading standards that exist around the world. Transparency meant visibility of sustainable fashion and compliance with ethical treatment.
Now the evolved brand experience goes beyond data security and transparency, requiring assurances of personal safety and social distancing while shopping. Retailers must adopt protocols and procedures to ensure the people who support retail around the world are safe. They must consider how to safely manage the number of customers that come into a physical venue while elevating the brand experience. And they need to ensure that those working in the warehouse and shopping facilities are also safe. As we saw in the crisis, those retailers that struggled with the latter faced backlash. Regardless of channel, the expectations need to be agreed on, and consumers must have faith that they will be delivered upon as promised.
As we emerge from the crisis and stores fully reopen, the name of the game will be intelligence and agility. Retailers need to not only better understand their customer and move with them as their journey evolves, but also be able to maintain excellence across each touchpoint – from first interaction to product delivery. Visit here for more tips on how.