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The Future of Retail – Is It Touchless?

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The Future of Retail – Is It Touchless?

Covid has made all of us more aware of what we touch in public spaces. And, as health concerns over Covid have now been with us for many months, new behaviors have become ingrained habits that are probably here to stay.

It’s no use trying to swim against this tide. Every retailer must take a fresh look at how their customers prefer to shop and make it easy for them to do so. Or they will risk losing their customers to competitors who give them what they want.

For most businesses that means an increasingly digital and multi-channel operation.

Pure play digital retailers have had the advantage in our new Covid world. They offer the ultimate touch-free solution and have established fulfillment routes, although some have struggled to cope with huge volume increases. High sales during the pandemic period have helped Amazon double their net profit this year to $5.2 billion and the recent Quarter 2 sales have been higher than the Christmas quarter of 2019.

Most digital-only retailers consider their biggest challenge to be the “final mile”, as it represents the most expensive and complex part of their process. If you turn this view on its head and look from the customer perspective, the biggest issue with online shopping is the first mile of the returns process. Whether you’ve got to go to a parcel office or designated drop off point, it’s just not as easy as ordering your items. Smart retailers are increasingly offering a returns pickup service. Physical retailers have the advantage of stores that create the opportunity for a convenient returns process for their customers and the possibility of an extra sale from the additional footfall for the retailer.

However, retailers that started with physical stores tend to be on the back foot when it comes to touchless and digital customer journeys. Some physical retailers have buried their heads in the sand and hoped the fad for touchless would pass over. These businesses are now struggling to remain viable as online research and purchase is an increasingly attractive customer proposition. Most store-based businesses offer a touchless route, however, yet only the sharpest have a truly integrated operation that allows customers to seamlessly move between multiple channels; whether instore, online, or via a call center.

So where should retailers focus to align themselves with entrenched touchless trends?

1. Payment instore is moving away from the system of customers queuing to pay a colleague at a till. The use of contactless cards, rather than chip and pin or cash, has become customers’ preferred option. It saves operational time instore as the payment itself is quicker and it reduces time spent handling hard cash.

But the real transformation in payment has been because of technology that helps skip the line altogether. Self-checkout tills have been around for years and are now being superseded by customer apps that enable self-scan and payment from your own device or a handset. Retailers are now juggling with a mix of payment methods that require new instore furniture, a revised front-end layout and different colleague cover models. The customer experience you deliver during payment creates a lasting impression that will influence where the customer chooses to shop in the future.

2. Digital fulfillment via stores, whether kerbside collection or picking up a Click and Collect parcel instore, is a moment of truth that really matters to busy customers expecting an efficient experience. It took me 45 minutes to retrieve my grocery order by kerbside collection at one store, and I couldn’t just drive away as I had already paid for my shopping. The store’s errors were not having enough colleagues to match the number of booked pickups and the collection point being a long way from their storage bay, so it took ages to wheel the order over. They sound easy to avoid, yet these seemingly simple to solve problems happen more often than you’d hope. Follow the simple rules of match your resource to the order numbers, keep the storage and collection points close to minimize travel time, and make sure your colleagues are trained on your process and you’ll drive both online and instore sales

3. Map all your customer journeys and make sure there aren’t any missing. For returns, for example, does the customer have multiple options or are you restricting them to just returning to one physical location? Many retailers have realized they need new customer journeys and Covid has spurred them on to make changes in weeks that were previously under consideration for months and even years. Don’t get left behind because there will always be a competitor willing to look after your customers better than you do.

4. Review every stage of every journey and check it is smooth for your customers and as efficient as possible for your operation. It is likely that you will have work to do to integrate your physical and digital routes, which is a driver for digital investment. KPMG’s research over the pandemic period for its Enterprise Reboot report found that 59% of executives say the pandemic has created the impetus to accelerate their digital transformation.

5. If you invest in technology to help your touchless journey, whether that is new kiosk payment or RFID stock systems to reduce counts instore and help you publish accurate stock numbers to customers shopping online, make sure you consider how your operating model needs to flex to accommodate the technology. For example, adding self-checkout tills reduces the cover needed on traditional tills, yet you must decide the model you will use to support customers at self-checkout tills when they need help. Dodgy scales, systems that can’t cope with coupons and difficult to use customer interfaces all drive increased requirement for colleague interventions and annoy customers. Consider too, how you target and incentivize your store teams to make sure they drive the right behaviors. If helping a customer with an online order doesn’t help towards a team’s sales target or returns are netted off the daily sales total, the store team is unlikely to go out of their way to make things easy for the customer.

Touchless retail is already here. How you adapt to it and evolve your operation as customer habits and preferences continue to change will determine how successful you are.

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Article by Simon Hedaux, founder and CEO of Rethink Productivity, a world leading productivity partner which helps businesses to drive efficiency, boost productivity and optimise budgets. For more information see https://rethinkproductivity.co.uk/

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Lessons from Retailers that are Thriving Despite the Pandemic

While many retailers are struggling, there are those that are thriving during the biggest period of change in most of our lifetimes. Apple’s Steve Jobs said that “innovation is the ability to see change as an opportunity and not as a threat”, so what lessons can we learn from retailers that are innovating and thriving?

1. Digital

As brick and mortar retailing ground to a halt for many, digital became a lifeline. It’s a good start to have a transactional shopping website but it’s not enough to thrive in most markets. You need to provide a smooth digital customer experience – the site must be simple to use, easy to pay, and provide relevant order progress updates. It needs to go further and bring your brand experience to life so customers can see the same values and priorities are at play in both your physical and digital worlds. Then, layer on an integrated social media approach to bind everything together and keep a close connection with your customers that drives sales. All aspects have to be integrated and telling the same story, so separate teams working in silos can’t deliver the business punch that a well-rounded experience and communication plan provides.

Strong brands with a clear proposition are showing us how to do it, for example, sports retailers including Nike, Adidas, and Foot Locker. With engaging website content that goes beyond the products, stores where there is always something new to see, and integrated social media messaging, they are a great model for any business to learn from.

Amazon has extended its lead in retail during the pandemic by being exactly what customers needed when going to the mall was not an option. Amazon is easy to use, offers a wide product range, and gets your purchases to you quickly. With Prime, they go beyond simple retail models and create multiple connection points with customers’ lives. There’s probably only room for one Amazon in the market, yet you can take the lessons from their success and translate them for your own brand. How do you build a tribe of loyalists? How can the customer journey and delivery be made simple and on-brand?

2. What’s your story?

Having a clear proposition and strong customer offer has never mattered more. Clarity on what you stand for makes it easier to have a consistent story across all your customer touchpoints. And don’t forget that it’s always been important to offer customers the right products and services to drive sales. The enduring demand for Apple’s must-have products made their stores a retail destination, with queues outside the door as soon as they were able to open. Are your products compelling enough for customers to make a journey to shop for them?

3. Meet customers where they want to be

In the UK, successful brick and mortar retailers enduring falling footfall have partnered with third party food distributors, like Uber Eats and Deliveroo, to give them a new and easy route to customers. In the US, Target-owned Shipt gives members same-day delivery from a range of local retailers via their app. For the retailers, it’s a clever approach that gives them a new fulfillment route with almost zero effort to set up.

Disney has been innovative in how they reach customers. The timely launch of their Disney+ streaming service has given them a new route for film releases like Mulan, as well as a captive audience of people based at home looking for new content. In early August Disney CEO Bob Chapek reported that Disney+ had over 60.5 million global subscribers; an impressive number given that they launched less than 12 months ago. You don’t have to go as big as Disney, however. My local bakery set up online ordering within a week and started a fresh-baked bread home delivery service with a trailer attached to a bike. They used social media to encourage regular customers to support them by ordering online and provided easy links to start ordering.

What innovative route to customers could be right for your customers and brand?

4. Keep trading

One of the biggest lessons comes from retailers who were able to keep trading because their food offer meant they were able to sell the rest of their ranges too, for example, Target in the US and B&M in the UK. Being labeled an “essential retailer” in the UK meant keeping your stores open and brick and mortar sales coming in. These stores saw an online surge and kept some physical sales too, meaning they had a stronger sales base to help them weather the storm. If the government orders you to close, you have little choice yet if you can find ways to keep trading and stay part of your customers’ lives it is much easier to bounce back. If you shut up shop for even a short while you can quickly lose relevance for your customers, a hard lesson many apparel retailers are struggling with now.

5. Review your efficiency

Retailers who have thrived have been flexible and responsive to change. As the routines of daily life have been turned upside down, new customer shopping patterns have made previous ways of working and colleague rotas outdated. You need to review your operation and make it efficient for the new realities of trading. The best operators use workload models and workforce management systems to calculate the resources they need now and alter shift plans to fit the changed demand. Don’t stick with the way you used to do things, or you’ll spend too much salary budget when it’s quiet and not have enough colleagues available in the busier spells. If you haven’t got a workload model that calculates the hours you need, get one as soon as you can as it will help manage your all-important cash flow. If you wait until things get back to “normal” to put robust workload planning in place, you could be waiting a long time and mismanage your salary investment in the meantime.

In a world of constant change, thriving retailers make constant readjustments and it does feel uncomfortable. The fittest thrive, so make sure your operational core is working well and flexible enough to cope with the demands that variable business levels will throw at it.

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Article by Simon Hedaux, founder and CEO of Rethink Productivity, a world-leading productivity partner that helps businesses to drive efficiency, boost productivity, and optimize budgets. For more information see https://rethinkproductivity.co.uk/