Check out the lead article in the most recent issue of JustEnough’s InDemand Newsletter and click here to read the entire newsletter.
In Q4 2013, we announced the launch of a new Promotion Management solution that is uniquely positioned to help retailers analyze past promotions and accurately plan, forecast and execute new campaigns, events and promotions, as well as integrate them into their merchandise, assortment, forecasting, allocation and replenishment planning processes.
Since then, we have seen the need for promotion management capabilities continue to grow as promotions become even more strategic for retailers trying to win and retain customers in today’s highly competitive retail environment. Retailers are also realizing that in the new world of omni-channel selling and shopping, they can no longer plan promotions in silos by channels, but need to plan and execute promotions cohesively across all channels. Shoppers move quickly between channels, so retailers need to view promotions from the customer’s omni-channel shopping perspective in order to succeed.
As a result, retailers are seeking out promotion management solutions that are modern, easier to use, faster to implement and quicker to configure and adapt - all at a lower cost and faster ROI. Also, many are bringing the execution of mobile, social and online promotions in house - further driving the need for new solutions.
As promotions have become more strategic for retailers, they have for JustEnough as well. In partnership with our customers, we continue to rapidly advance our solution. We also continue to expand the breadth and depth of our expertise by adding team members with extensive promotional planning and execution experience.
Some recent enhancements to the solution include:
A Validation/Rules Engine that enables the creation of business rules for maintaining compliance to federal, local and legal regulations; company policies and vendor agreements thereby preventing the creation of invalid promotions and eliminating the need for additional checks before promotions are executed.
Greatly expanded capabilities and configurability of the JustEnough Dashboard through the addition a new widget type specifically created for the fast design and display of critical information. Companies can now quickly configure dashboards using charts, gauges, cards and maps to display relevant business data to support better decision making and for gauging the success of promotions.
In January of this year, we announced that Shopko, a $3 billion retailer that operates over 320 stores in 21 states across the U.S., has gone live on our JustEnough Promotion Management solution to support its promotion planning and execution process. Since that time, Shopko has gone through a complete promotions planning and execution cycle and is already realizing the benefits of JustEnough’s end-to-end solution.
We also announced last year that NBTY Europe selected JustEnough Promotion Management and is very close to going live. NBTY Europe will also be using the solution to set initial prices and manage lifecycle pricing, in addition to forecasting promotional demand.
We look forward to helping additional retailers to significantly improve the success of their future promotional campaigns and events, increase sales and brand awareness, lower costs, increase promotional planning efficiency and reduce time to market.
Visit our website to learn more about how JustEnough can help you gain the benefits of improved promotion management.
Earlier this week, NRF published its monthly economic review and there was quite a bit of good news. Here is Jack Kleinhenz’s, NRF Chief Economist, take on the April 2015 report.
When it comes to the U.S. economy, one can’t help but feel a sense of déjà vu. Similar to last year, unseasonably cold weather and lingering caution among budget-conscious consumers have dampened economic activity since the first of the year. However, as we head into the second quarter, I expect we’ll see that the consumer is actually more in the driver’s seat compared to this time last year. Lower energy costs, rising home equity, job and income gains and increased buying power from the stronger U.S. dollar will all continue to positively contribute to greater consumer spending ability — a key factor for further economic gains.
Other positive factors that will continue to influence improved growth in consumer spending include growth in real disposable income, which has grown 4 percent on a year-over-year basis ending in February — the fastest rate seen in two years — and stock market gains that are about 12 percent above this time last year. Additionally, housing price appreciation and decreased household debt burdens are at their lowest in at least 35 years, contributing to bigger gains in consumer confidence.
This month’s full report includes these highlights:
Retail sales (excluding automobiles, gasoline stations and restaurants) reversed course and increased 0.5 percent in March after dropping 0.4 percent in February.
The University of Michigan consumer sentiment index beat expectations in the first half of April, increasing to 95.9 from March’s average of 93.
The March headline Consumer Price Index rose 0.2 percent between March and February. This was the second positive reading in five months.
Retail Jobs and Openings
Total retail employment across all industry segments increased 25,900 to 15.6 million in March. There were 463,000 job openings in the retail industry on the last business day of February.
Personal Income and Spending
Personal income rose by 0.4 percent in February while personal consumption inched up only 0.1 percent.
You can access the full report here.
I recently shared an interesting article from Integrated Solutions for Retailers about how online retailers are realizing the benefits of having a brick and mortar presence. Now I’m pleased to share an article from CNBC about how brick-and-mortar retailers are beginning to capitalize on their robust physical footprints. It’s also nice to see one of our customers – Restoration Hardware – leading the pack.
Check out the full article.
The tide is starting to turn for bricks-and-mortar retailers.
Long the digital laggard to online-only shops, traditional stores are beginning to capitalize on their robust physical footprints—namely, by using them as souped-up distribution networks—as they continue to make their Web and mobile operations easier for shoppers to use.
Pedestrians pass a Restoration Hardware store in New York.
"Our analysis indicates traditional retailers' supply chain costs are roughly three times lower than [online] pure plays when leveraging store fulfillment capabilities," Cowen & Co. analyst Oliver Chen wrote in a note to investors Thursday.
In contrast to physical retailers, who can utilize their expansive store networks as points of distribution, online-only companies have to rely on a smaller system of warehouses that tend to be located outside of high-population areas, where the land is cheaper. Even the leader in online commerce, Amazon, has fulfillment centers only in roughly a dozen states.
On top of this advantage, Chen said traditional retailers can ship multiple items at a time to stores, as opposed to one-off packages that go directly to consumers. They also offers shoppers the option to pick up items in store, which removes incremental shipping costs. And again because of their store footrprints, bricks-and-mortar retailers have more opportunities to ship next-day packages on the ground, which is on average three to four times cheaper than by air.
"Beyond the profitability advantage, the convenience of buy-online, pickup in store should continue to gain traction with consumers, driven by mobile providing stores an advantage in years to come," Chen wrote.
Online-only retailers sill have their own advantages, of course. They aren't saddled with the expenses associated with running a physical store, including rent and higher labor costs, for example.
Who's winning online?
Though major mass retailers including Target and Wal-Mart are posting robust double-digit growth in their online sales, they're doing so from a low base. And even though Wal-Mart's online sales totaled $12 billion last year, that only accounted for 2.5 percent of overall revenues, Chen said. Similarly, Target's estimated $2 billion in online sales accounts for about 3 percent of total revenues.
Chen said the bricks-and-mortar retailers that are leading online tend to be those that sell items with a bigger price tag; appeal to higher-income shoppers; have integrated their mobile, Web and store operations; own their own brands and appeal to millennials.
Upscale home furnishings store Restoration Hardware, which features its products in large design galleries that many shoppers then purchase from their homes, leads the competition by a wide margin.
To see how other retailers fared, check out the following chart. (It's arranged by category: Luxury and accessories names are at top; followed by specialty and apparel stores; and then mass and department stores.)
E-commerce Penetration of Total Sales
This is the final article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll review the conclusions and key takeaways from the study.
Here is the final installment:
The 2014 Merchandise Planning & Allocation Benchmark Survey confirms that retailers understand the necessity of a unified commerce model, and are working to improve planning processes to support this retail environment. The data also reveals that a majority of retailers recognize the importance of standardized planning, and thus have introduced formal processes within their organizations.
Progress towards unified processes
- 69% are planning to expand their unified commerce capabilities within three years
- More than 45% have integrated business processes and systems across channels
- 26% offer real-time visibility across channels with another 65% offering “some” visibility of in-store/online inventory
However, many have yet to implement the measures necessary to support the demands of a unified approach across all channels. Key best practices are showing a lack of process alignment to support unified commerce initiatives, which present several opportunities for improvement.
Unified process opportunities
- 69% of retailers still maintain separate inventory across channels
- Only 8% have a working cross-channel forecasting method
- 46% have no plans to offer the ability for a store transfer where the customer orders an item in store A and store B ships the order to store A where the customer picks up the order
One of the most encouraging developments within the last 12 months is the increased focus on incorporating social media data, including customer preferences, affinities and trends, within the merchandise planning processes.
Social media analytics progress
- 39% use social media to facilitate planning within product development, up from 6% last year
- More than 50% plan to expand their social media analytics capabilities within three years
In addition, while assortment accuracy is cited as a top priority, there are opportunities within business intelligence that are currently being overlooked when planning and allocating inventory.
Opportunities within data analysis
- Only 33% currently utilize CRM data to feed business intelligence tools
- 41% do not capture customer feedback from social media
- 73% have only basic analytical and reporting capabilities
Consumers expect a fast and efficient selling and delivery process, where the physical and digital selling channels converge to provide a cohesive shopping experience. These unified commerce shopping concepts continue to grow significantly, requiring retailers to put more functional capabilities in place than ever before. With a multitude of emerging tools and techniques available to support and expand business, it is an exciting time to be a retailer.
Apparel Magazine recently published an interesting article about Capgemini's findings from a global report on loyalty programs in the digital age. Capgemini is a JustEnough partner and the article features Sephora, a JustEnough customer. Contact us to learn more about how JustEnough can leverage customer loyalty information to improve product assortments, allocation and promotional planning and execution.
A global report "Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age" by Capgemini Consulting reveals that loyalty programs have not evolved with the digital age and are failing to engage consumers. The report lifts the lid on why active participation rates in loyalty programs are often low and why 89 percent of social media opinions on loyalty programs are negative.
Capgemini researched the loyalty programs of 160 global companies across 7 sectors including Retail, Banking, Consumer Products, Telecom, Airlines, Hotel Chains and Consumer Electronics. In addition, Capgemini also conducted a scan of 40,000 consumer conversations on social media to gauge customer sentiment towards loyalty programs.
The research revealed that most loyalty programs follow a basic transactional philosophy where rewards are based on purchase. Only a small minority of programs recognize and reward consumers for engaging and interacting with the brand in other meaningful ways. Furthermore, most loyalty programs lack personalization and fail to offer cross-channel redemption services. The negative social media sentiment on loyalty programs stemmed mainly from the lack of reward relevance, rigid reward structures, user experience issues with online channels, and poor customer service quality levels.
Key findings of the study reveal that loyalty programs are not evolving at the same pace as the digital age:
- Just 11 percent of loyalty programs offer personalized rewards based on a customer's purchase history or location data
- 79 percent of loyalty programs use the mobile channel, and yet only 24 percent allow redemption through it
- 97 percent of loyalty programs are based primarily on purchases made by consumers
- Only 16 percent of loyalty programs reward customers for activities such as taking online surveys, rating and reviewing establishments or referring friends to the program. Only 14 percent employ gamification mechanisms to reward customers.
Loyalty programs need to focus on driving customer engagement
The report recommends that loyalty programs be seen within the larger context of a marketing strategy that is focused on driving customer engagement. Organizations need to look at each step of the loyalty program, from design to evolution, through the prism of engagement.
Mark Taylor, global lead for customer experience transformation at Capgemini Consulting said, "Brands need to revisit their approach to loyalty. For us, the key is to integrate the loyalty program into the overarching customer experience and to reward engagement as well as the simple transaction. Additionally, since relevance is the highest form of customer intimacy, offering advanced levels of customization and tailored experiences will enrich loyalty programs and further encourage customer engagement."
According to the research, fewer than one in ten loyalty programs (9 percent) offer point redemption across all channels. To be commercially successful, programs must engage customers across every customer touch point.
Seamless purchase experience at Sephora
The study cites Sephora's "Beauty Insider" loyalty program which matches loyalty accounts with Sephora's mobile app, as well as the Apple Passbook mobile wallet. This allows Sephora to provide a seamless purchase experience, where customers can track their purchases, view offers, and redeem reward points on the go via their mobile devices. The strategy has worked, with Sephora's Passbook users purchasing twice as much and twice as frequently as the average Sephora customer.
To deploy successful, customer-engagement focused loyalty programs, Capgemini believes the following strategies should be employed:
- Integrate loyalty programs with the overall customer experience
- Deliver personalized customer experiences
- Conduct "Social Listening" to understand customer needs
- Reward members for social media engagement and advocacy
- Use gamification techniques to drive deeper participation
- Provide value beyond traditional rewards
Integrated Solutions for Retailers recently published this interesting article about how online retailers are realizing the benefits of having a brick and mortar presence and that the number of online retailers rushing to establish a physical presence in a storefront is growing. With a physical storefront, online retailers are exposed to a new audience that may not be aware of their online presence, and also provides a more hands-on experience, since customers can touch and try on products, or receive an in-store demonstration of their features.
Check out the full article.
In February 2014, Forbes ran a piece entitled “Year of Reckoning for Brick and Mortar Retailers” about the shift in the shopping mentality of the American consumer. For years, Forbes said, it was as simple as establishing a storefront near housing developments or establishing properties. In these central locations, retailers would flourish, particularly with the popularity of the shopping mall. The retail landscape has changed significantly in the last twenty years as technology has advanced in all facets of a consumer's life. In the 1980's, the shopping mall was more than a retail destination, it was a hub of an individual's social and community experience. With the invention of the internet, shopping started slowly shifting online, and existed beyond the microcosm of the mall or strip mall. 1994 saw the arrival of Amazon and in 1995, auction retailer eBay. Seeing the rising popularity on online shopping, and wanting to keep their existing customer base meant brick and mortar retailers needed to rethink their marketing process and get digital. Retail analysts seeing the changing tide in consumer behavior declared online shopping was the future. Now in 2015, retailing has reached a new point, however, where retailers that once existed solely online are moving into a brick and mortar model.
The online shopping experience offers benefits to both consumers and retailers. Retailers are able to market via email and other digital channels, maintain a large inventory, and aren't hampered by a commercial real estate market for choosing a viable storefront with a good walk score and centrally located to their target consumer. Customers are able to enjoy a streamlined shopping experience with one click, without needing to visit a store in inclement weather or during a busy week. Online shopping also allows purchases to be delivered right to a consumer's door for free or a nominal fee. Online retailers have also seen the benefits of having a brick and mortar presence though, and the number of online retailers rushing to establish a physical presence in a storefront is growing. With a physical storefront, online retailers are exposed to a new audience that may not be aware of their online presence, and also offer a more hands-on experience, since customers can touch and try on products, or receive an in-store demonstration of their features.
Prescription eyewear and sunglasses retailer Warby Parker was founded in 2010, and five years later the company has four retail stores and eight showrooms. The company is currently looking into building its own POS (Point of Sale) system, and will open its first Miami, Florida store this month. Speaking to INC upon opening their flagship store in New York City, founder Neil Blumenthal says, “We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar.” He also cited Warby Parker's famous “try on at home” offer as one reason they went retail, saying that customers would ask to come try on glasses at Warby Parker's headquarters, which at that time was a city apartment. The retailer then offered pop-up stores and a showroom, before finally offering a flagship store. Warby Parker is a prime example of the benefits of a brick and mortar approach for retailers.
Subscription box company BirchBox opened their first retail location in Manhattan not far from Warby Parker's, letting customers put together custom boxes of beauty samples, browse of all BirchBox's offerings, and receive personalized recommendations. BaubleBar, an online jewelry retailer, has been open for only three years, but is now experimenting with a pop-up shop in Manhattan as well, in a move a Business Insider writer called a retail store “women desperately need,” because the retailer offers fashionable yet affordable jewelery to women age 20 and up. Even Amazon isn't shying away from the trend, and instead opened its first brick-and-mortar store at Purdue University in February. The campus store lets college students order rented textbooks then pick them up in-store, and also serves as a pick-up/drop-off location for returns and orders. Amazon is still exploring new retail location options as well, showing that while online shopping was once the wave of the future, the focus has shifted to be both online and offline for retailers who want to maximize their profits and reach, as well as offer consumer service.
This is the fifth article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll delve into the technologies needed to enable unified commerce.
Here is part five:
A combination of appropriate tools and systems are necessary to fully support the unified commerce model. Absent the right technology, unified commerce strategies lack teeth and fail to achieve maximum efficiency and benefit for retailers. Best practices dictate employment of a full suite of merchandise planning, assortment planning, and store allocation systems working in conjunction with each other. This year’s survey results reveal that while there is movement in the right direction, there is still significant opportunity for retailers to evolve from a technological perspective.
Fully integrated solutions have not gained vast acceptance into the systems landscape at most retail organizations. Surprisingly, 38% of participating retailers reported currently using a spreadsheet for planning and allocation . This illustrates that despite rapid technological developments of best-in-breed capabilities and similar to the findings of the 2nd Annual Merchandise Planning & Allocation Survey, a large number of retailers have been slow to adopt integrated solutions. Leveraging robust tools that allow for management of transactions across all channels will become increasingly vital for retailers who seek to remain viable in a unified commerce environment.
Surprisingly, 38% of participating retailers reported currently using a spreadsheet for planning and allocation
The satisfaction level of retailers with their current systems environment also reveals further room for technological improvement. Although the satisfaction that retailers feel for planning applications is up from last year’s survey, the results are still neutral to negative. When asked to rate the effectiveness of their tools, 45% stated satisfaction with their merchandise planning tool, 21% with their assortment planning tool and only 15% with their space planning tool.
This dissatisfaction is not going unnoticed. Retailers are cognizant of the need for enhanced systems, with a majority planning to either upgrade or replace their assortment planning (65%) and merchandise planning (60%) systems within the next 1-3 years. Space planning enhancements will not be as strong of a focus for organizations.
A fully integrated unified commerce environment requires a solid technological foundation. As the survey shows, retailers are starting to appreciate the urgency behind systems improvements. Nonetheless, transitioning from legacy systems and spreadsheets continues to be a challenge. Inability to fully embrace integrated systems will inhibit efforts to provide a truly unified commerce retail model. Those keeping pace with technological developments will find themselves at a definite competitive advantage until the rest of the industry is able to catch up.
Retail sales in March showed marked improvement over the previous months as consumer spending thawed right along with the weather. The National Retail Federation today reported that sales excluding autos, gas and restaurants increased 0.5 percent seasonally adjusted over February and a solid 3.5 percent unadjusted year-over-year.
"March's sales report is a welcome improvement after severe winter weather weighed on retail sales for the last several months," said NRF Chief Economist Jack Kleinhenz. "Both the composition and the magnitude of March’s rebound show that consumers are dipping back into their discretionary budgets and spending on both hard and soft goods; several business lines in March show signs of improvements.
March's sales report is a welcome improvement after severe winter weather weighed on retail sales for the last several months
"An early Easter also played into the seasonal figures and provided some lift in retailers' sales; though consumers will continue to spend on a selective and price-sensitive basis, we expect a stronger second quarter with steady improvements in job and income growth," continued Kleinhenz.
The U.S. Department of Commerce today reported that sales in March, which includes autos, gas and restaurants, increased 0.9 percent seasonally adjusted month-to-month and 1.3 percent unadjusted year-over-year.
Additional insights from March's retail sales report found:
- Furniture and home furnishing store sales increased 1.4 percent seasonally adjusted over the previous month and 4.1 percent unadjusted year-over-year.
- Electronics stores sales decreased 0.5 percent seasonally adjusted over the previous month and 2.7 unadjusted year-over-year.
- Building materials, supplies and garden equipment store sales increased 2.1 percent month-to-month and 8.6 percent unadjusted year-over-year.
- Clothing and clothing accessories stores sales increased 1.2 percent seasonally adjusted month-to-month and 3.3 percent unadjusted year-over-year.
- Non-store retail sales decreased 0.1 percent seasonally adjusted over February and increased 6.6 percent unadjusted year-over-year.
This is the fourth article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation.
Here is part four:
Social media has drastically altered our mode of communication in the last ten years. In its most basic form, social media provides a venue in which retailers can directly communicate with their universal customer base. Extending beyond initiating dialogue, it can also be an extremely powerful tool for collecting and using customer feedback to affect merchandise planning and allocation decisions. While this approach is still in its infancy for many retailers, the survey indicates a significant growth in the use of social media for merchandise planning purposes.
For the most part, the retailers surveyed are focusing their social media efforts on the mainstream digital outlets of Facebook, Twitter and Pinterest. The importance of escalating digital media pursuits is being recognized though, with more than half of retailers planning to expand their social media and ecommerce groups within the next year. Conversely, using social media for analytics will take a little longer with only 25% of retailers targeting this area within the next year and 33% planning to expand their social media analytical abilities within 1-3 years. Retailers are clearly placing emphasis on content output and brand development rather than on the gathering, analysis and utilization of social media input.
planning to expand their social media analytical abilities within 1-3 years
As the survey results indicate, retailers are just scratching the surface when it comes to leveraging social media content. The current use of social media data is limited, with only 39% using it for product development and only 35% using for promotional planning. However, this is up significantly from last year’s survey with a 550% increased use of social media for product development and a 190% increased use for promotional planning.
Only 8% of retailers incorporate social media data (including preferences, affinities, and trends) into business intelligence (BI) tools to utilize within the planning process.
Though motives behind the decision to utilize social media data vary by retailer, it is important to note the growing availability of tools that facilitate data mining of social media in the retail marketplace. With the integration of social login and e-commerce sites, retailers have been granted access to large quantities of customer information. For instance, upon logging on to a Website using social media credentials, customers consent to instantly provide retailers with demographics, preferences, product/brand likes and many other details about themselves. This customer insight results in large quantities of relevant data ripe for retailer reference. This data can help align demand, sell-through merchandise, localize assortments, and establish pricing and promotions.
While the number of retailers using social media data for planning rose significantly from last year to this year’s survey, we see few retailers planning to invest in this area within the next three. In our discussions with retailers within the industry, we have found that there is still education needed on the benefits of mining social media data and the solutions available to enable this.
Retailers can gain significant insight into the minds of the consumer by fully making use of the tools and reporting functionalities that are accessible today. Using reporting capabilities, much like market basket analysis, retailers can start identifying new trends and opportunities, as well as further support or reinforce current ones. As data connections and correlations are developed, the process can be further refined to help support predictive analytics based on a socially engaged customer base.
This is the third article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll explore components necessary to create a strong foundation for implementing a unified commerce strategy.
Here is part three:
To keep up with best-of-breed competitors, most organizations are working towards offering a seamless customer experience across all sales channels. However, the survey results further confirm BRP’s industry observations that because this is such a large undertaking, most retailers are still in the process of implementing a complete unified commerce solution. According to the survey, 69% of retailers are planning on expanding their unified commerce capabilities within the next three years.
are planning to expand their unified commerce capabilities within three years
One area of progress in offering the customer a single brand experience is the decrease in separate channel assortments offered by retailers. 28% of retailers have made the step to offering the same assortment across all channels within the organization.
Separate Channel Asortments
In the meantime, while retailers are working towards a unified commerce platform, they are dealing with the pain of working with different and separate silos of data to try to offer their customers a holistic shopping experience across any channel. One-third of retailers indicated that different silos of data are the biggest pain point within the organization.
There are several components necessary to create a strong foundation for implementation of a unified commerce strategy. The survey touched on six of the most vital elements, including:
- Unified planning
- Flexible allocations
- Real-time inventory visibility
- Inventory accuracy
- Expanded coordination with vendors
- Modified internal incentives
A retailer’s success is dependent upon their ability to implement robust capabilities in these arenas.
Creating a unified plan is paramount to executing on a unified commerce strategy, and many retailers still have a long way to go. Surprisingly, only 8% of respondents have a working cross-channel forecasting method, 24% implemented but still need improvement and the remaining 49% plan to implement in the next 3 years. Once fully operational, retailers can leverage inventory across channels to decrease overall investment and improve inventory turn, margin and gross margin return on investment (GMROI).
find that different sources or silos of data are the biggest pain point
Flexible allocations grant a retailer the ability to use real-time inventory information to determine the locational need for goods. Today’s best-of-breed solutions promote the transfer of inventory where it is needed when it is needed, serving as an important foundation to the unified commerce process. Despite the existence of technology to support flexible allocations, the retailers surveyed are still fairly siloed with 42% allocating to a single channel.
Real-time inventory visibility across the enterprise is another key piece to implementing a unified commerce strategy. Though most retailers can presently account for goods in the distribution center (DC), precise tracking of in-store inventory presents a bigger challenge. Unified commerce requires retail stores to know exactly where an item is located in order to meet customer demands for real-time fulfillment across all channels.
The majority of respondents indicated having some cross-channel inventory visibility, but only 26% have reached real-time visibility. We expect to see these numbers grow drastically as more retailers begin to fully adopt unified commerce best practices.
Inventory Visibility Across Channels
Like real-time inventory visibility, increased inventory accuracy is fundamental to a unified commerce strategy. Today, retailers have a difficult time maintaining accurate inventory figures due to the infrequency of full cycle counts. The emergence of radio-frequency identification (RFID) technology is changing the retail landscape, bringing precision to inventory counts and eliminating the business disruptions caused by full cycle counts. In the coming years, we anticipate many retailers will join the likes of Inditex, Saks 5th Avenue, Chico’s and Neiman Marcus in deploying RFID technology.
Sharing the burden of inventory ownership with suppliers decreases inventory risk, frees up capital and allows retailers to offer customers extended choices via an “endless aisle.” Retailers are finding value in this practice, with 37% offering an order online/ship from vendor option and 41% a buy in store/ship from vendor. This practice will continue to grow, particularly as retailers actualize on the financial benefits derived from reduced inventory costs.
The last critical piece in the puzzle is the ability to compensate and effectively incentivize in-store retail employees. This is a challenge for even the most basic, single channel retailer. Throw in multiple channels of acquisition and fulfillment and the process becomes significantly more complex. In order for the unified commerce strategy to gain full support, employees must be incentivized to act in alignment with business strategy. With 49% of retailers giving credit where the sale originated and 31% where the sale was fulfilled, approaches need to be reevaluated to ensure full employee buy-in. This piece will be a challenge to solve, with retailers expected to go through many iterations before getting it right.
credit the location fulfilling the sale for the customer