When it comes to customer engagement and choice, in 2020 the stakes just got higher. Services like Click & Collect and Ship From Store have proven surprisingly complex for retailers to make both efficient and profitable. Here’s why it’s important right now.
While it doesn’t seem appropriate to talk about the events of 2020 in terms of ‘winners’, it’s inarguably the case that most retailers have seen wildly varying levels of impact on different facets of operations – and that services like Click & Collect and Ship From Store are areas that have seen a marked upturn in the last six months.
Click & Collect has in the main been going from strength to strength over this past decade (albeit with one caveat, which we will come to). It’s popular with customers, who have more choice around fulfilment and can ‘potentially’ get their hands on the goods cheaper and quicker, and it’s popular with stores, who can increase footfall with all the good upsell potential and brand exposure that represents.
But it has seen a huge spike in our socially distanced age. Store foot-traffic has fallen dramatically and customers have turned to C&C and curbside pickup to reduce exposure to Covid.
This has had four immediate consequences for retailers. Probably the biggest and most immediate is the ability to scale Click & Collect operations just to keep up. The second is the inevitable fact that Click & Collect is now under the spotlight, with operations teams and even Board members taking an unprecedented interest in the minutiae of details. The third is that, in the grocery space especially where many customers’ main weekly shop is now done by curbside pickup, Click & Collect has in effect become a main barometer of customer experience.
The fourth – and this one is critical even for those retailer who consider themselves to have pretty good Click & Collect in place already – is that your operations need to be able to deliver ‘Ship From Store’. With so much pressure on online operations right now, maintaining stock levels is even more challenging. But it’s very often the case that items out-of-stock in fulfilment centres are still available in certain stores. Not being able to take advantage of this (in other words, not being able to ship the desired items – which the retailer has in stock in stores – direct from stores to the customer) means missed opportunities for retailers.
With so much more done at home right now (from shopping to socialising to dining) it has become more important than ever for customers to have a good experience and to ensure orders are fulfilled as accurately as possible. An incorrect pick or a missed bottle of wine could mess up the Saturday night meal, a birthday present or other occasion, which now all have more weight than it might have done in the past. Out of stocks generally are tolerated less forgivingly by consumers.
From when an item comes into your DC to when it leaves for the store and your customers come and pick it up at your door there needs to be a clear thread of insight, visibility and collaboration. Get one item wrong and you could have ruined a customer’s weekend – get it right and it will be just simply what they’ve come to expect. So there’s a real need to ‘nail’ the seamlessness of the entire processes, both for Click & Collect and for Ship From Home.
But Click & Collect operations do come with one big caveat. Click & Collect inevitably entails additional complexity, which of course translates into time and money. For those of us who keep a watch on how the retail landscape has developed, the Click & Collect story has run in all-too-familiar ways for various retailers, who have refined their operations yet still found it very difficult to make Click & Collect profitable.
And Ship From Store operations come with their own logistical and profitability challenges too, but the potential rewards are great. Ship From Store enables retailers to: avoid stock-outs; reduce end-of-season markdowns by more smartly and reactively balancing stock across stores; reduce costs and delivery times – in many cases – by being able to maximise all inventory; and increasing the all-important customer satisfaction.
So for the forward-thinking retailer today, offering such consumer choice and running such services effectively is about balancing efficiency, customer experience, and profitability. To ultimately deliver – and keep delivering – this bottom line, retailers need proper visibility into their operations.
As ever, Business Intelligence is at the heart of delivering effective and efficient operations, which in turn delivers customer delight. Retailers need comprehensive, real-time visibility of all the data coming in and out of their organisations, and then to make it meaningful, relevant and actionable, in order to be able to speedily identify and address new problems, and to predict - and avoid - possible future ones. Insight from cloud-powered advanced analytics is how retailers keep Click & Collect and Ship From Store customers satisfied at a time when there are unprecedented stresses and strains on operations.
It looks very likely that this change in consumer behaviour with regard to Click & Collect isn’t merely a spike but is here to stay. Many retailers are saying their customers expect to continue using Click & Collect post-Covid. So the rewards for getting it right – alongside getting Ship From Store right – are significant.
If you want to discover how Hitachi Solutions and Microsoft are helping retailers, please do get in touch. We’ll also be exploring these in Hitachi’s upcoming LinkedIn Live event, designed to help retailers take stock of the unprecedented disruptions of 2020 and gain a calm clear head around how best to move forward.