What factors will advance the survival prospects of a retailer? The immediate problem is likely to be purely financial – rent, bills, wages, loans and dead stock. If that hurdle is overcome, a retailer needs to thrive in the post-pandemic climate. Following the pre-pandemic business model of 2019 will probably not work for very long. New strategies will need to be implemented. Management and monitoring of such strategies will be vital to gauging their effectiveness.
This 4-part blog series has so far addressed some of the issues that fashion retail will experience as a result of the pandemic and the ways in which an ERP system, or any integrated software system, can be designed to help a retailer or brand through the crisis.
Part 1 of the blog series argued that rather than avoiding the investment in an integrated software system like an ERP, there will be a greater need for one – an agile, budget friendly, adaptable option instead of a time-intensive, expensive monolithic one.
The pandemic has accelerated a global drive towards sustainability and ethical conduct. A brand’s ethos will be very important to its survival. Part 2 discussed the importance of incorporating sustainability into a brand’s ethos and how sustainability throughout the complicated fashion supply chain can be managed via an integrated software system.
Part 3 delved into retailing strategies. It discussed the chimerical retail strategy of omnichannel and how the more simple and pragmatic approach of harmonized retail could be used to achieve similar goals.
Today’s blog, part 4, discusses the steps a retailer can take to practically apply a harmonized retail strategy to maximize sales and consumer satisfaction.
How to harmonize retail
Choose the right channels
Pre-pandemic surveys showed that 76% of consumers researched online prior to making a purchase. Post pandemic, with lockdowns and the fear of catching the dreaded virus - digital is becoming even more important. If digital channels are not part of a retailer’s offering, it is worth considering adding one.
There is much pressure on a retailer to fit every conceivable selling channel into a holistic omnichannel experience. Although many retailers attempt to do so, very few get it right. In a recent article, McKinsey argue that it is better to focus attention on the top two or three cross-channel customer interactions. There is no need to be truly omni channel. Instead, analyze which channels consumers use most for the top cross-channel journeys and make those experiences seamless and integrated.
For example, data might show that many shoppers research online, narrow their selection to several items of clothing and then visit a brick and motor shop to make their final purchase. But perhaps, only few mail-order consumers shop cross-channel? If that is the case, it is not necessary to have a seamless experience between the mail-order channel and other channels.
Conclusion: Invest in digital. Pick the main channels that feature in most cross-channel journeys (digital will almost certainly be one).
Choose your software systems carefully
Once the key channels and the key journeys have been identified, software is required to make these journeys seamless at key cross-over points. Not all channels need to be on the same system, but the systems need to be integrated appropriately.
Ideally, backend data which is fed to the channels, need to reside in a central location, either in an ERP, like Infor Cloudsuite Fashion (CSF), or a Data Warehouse. This will minimize data variances between product catalogues, prices and stock availability. A change in the central source will update the channels simultaneously.
Customer data, such as loyalty information, personal details, wish-lists and even shopping baskets should be synchronized across the channels, as these affect cross-over points.
Stock availability needs to be given special consideration. A decade ago, it was common to ring-fence stock for specific channels, based on forecasts. Such policies were driven by management and accountability constraints, such as merchandisers having control over their own retail store stock. But today, stock fluidity is vital. Consumers have very little patience if a product is out of stock at a store, only to find it is available online.
In a world with teleportation, one pool of stock across all channels would be an easy solution. However, logistics and lead-times mean that stock cannot be stored in such a manner. Retailers need to find alternatives that allow stock to move between physical locations and between channels, in response to demand, whilst still having reasonable lead-times, a small carbon footprint and low shipping costs: not a simple task!
Ship-from-store, where stock shortages online can be fulfilled from stores closest to the consumer’s address, is gaining popularity. For example, systems such as Infor CSF can be designed with priority algorithms that first check stock at the closest warehouse, then the closest retail store and so on. Retail staff are trained to fulfil online orders as well as in-store sales.
Retail store assistants can be provided with tablets that show real time global stock inventory. If a product is not available in-store, the assistant can check global availability immediately and even offer to ship the goods direct to the customer by placing an order then and there. Systems such as Birst offer such real time data and reports can be tailored to the store assistant’s needs.
Moving towards a made-to-order model can also assist with stock availability. Customers can be given the option to customize prior to buying, knowing that this will increase lead-time but ultimately give them a unique product, tailored specifically to them. Such orders can be fulfilled direct from manufacturer, regardless of channel.
The software used for each channel does not need to be expensive or time consuming to implement. There are many marketplaces, such as Zalando and Farfetch, that do the virtual heavy lifting, but only require an interface to a brand’s own system. A website or an app can be created quickly and to a small budget. Brick-and-mortar stores can be easily kitted out with computers or tablets. Click-and-Collect and Buy-Online-Pickup-In-Store reduce upfront costs by mixing online and offline channels. Increasing the “shoppability” of social channels, such as clickable content on social media, is also not too difficult.
Regardless of which channels are chosen and how they are designed, from a usability point of view, a few details are essential. Digital channels need to be easy to use, stable and fast. Elaborate videos may look sleek but if they slow the user experience, they are best avoided. Websites need to be mobile responsive ; just because an app exists, does not mean that every mobile-using customer is going to download it. High sellers should be emphasized and easy to locate, both online and in-store. Amazon’s first page generates 66% of all product clicks. Brick-and-mortar stores need to be provided with digital access such as real time product catalogue, price and availability reports.
Another important point on software is to make sure it is easy to redesign, tweak and modify. These are times of change. Businesses need to constantly review and revamp. Arcane, monolithic software systems that require months between idea conception and software implementation are things of yesterday. Easily adaptable software, such as FRIB, that can be implemented using agile methodology is paramount. Software that can be implemented and managed remotely is also a must.
Conclusion: Each channel will have its own attributes that set it apart from others. But it is important to use adaptable software systems that share common data across channels and ensure that each channel is easy to use and provides a consistent and holistic view of the product offered.
Make online and offline meet halfway
Ultimately, the channel a shopper chooses is a matter of personal opinion or experience. There will always be those that prefer shopping online and others that prefer a physical store. It is possible, however, to improve and enrich the experience within each channel by incorporating the benefits of others. Once data is common and synchronized at critical junctures across channels, it is not a monumental leap to blur the boundaries between channels.
There are areas in which online is more successful than offline. Brick-and-mortar stores usually struggle with personalization, something online channels can excel at. Consumers can be given a feeling of having a “personal shopper” experience by homepages that feature personalized catalogues, in the correct size, derived from previous purchases.
Such personalization can be extended to physical stores as well. Burberry has been doing this for over half a decade now. Customers who choose to share information via loyalty or rewards programs are identified when they enter a store. Sales assistants are equipped with tablets that are automatically updated with the customer’s information so that they have visibility of the customer’s sales history and social media activity. Algorithms offer product suggestions, such as a bag that suits a recently purchased coat. Products are fitted with RFIDs that a customer can scan using their phone, use to view manufacturing details or accessory suggestions.
Timberland does similar personalization with near field technology (NFT). Customers are provided with a tablet that they can use when in the retail shop. Tapping the tablet to any product they choose provides the customer with product details, suggesting similar products that may be of interest and personalizing the experience. Customers can email wish-lists to themselves, and make their final purchase online, at home.
There are also areas in which offline is more successful than online. Physical stores let customers try on a product, feel its texture and see how it looks when paired with a certain pair of shoes or handbag. Digital needs to transform from a 2D untextured space to a 3D space that conveys experiential texture and feel. Creative use of live streaming, virtual showrooms and fashion shows are blurring the boundary between real and virtual. Technological innovations such as Augmented reality (AR) software allow consumers a three dimensional view of a product as well as the ability to “try products on” prior to purchase. Today’s 3D software needs nothing more than a user’s mobile phone to generate 3D imagery and fitting services. The software can also be integrated to the brand’s own systems, such as Infor PLM.
Digital channels also lack contact with real people. Yes, Live Chat bots can answer questions, but they are not able to say if that handbag looks good with that dress. The issue can be solved by offering personalized attention, such as virtual meetings with sales associates.
Another area in which digital falls short is authenticity. Digital images often look airbrushed and manipulated. Break away from perfect polished static images to those that convey a sense of fluidity. Digital images, used on websites, apps or in marketing, should also feature in-store. They should show various aspects of the product, including, where possible, consumers’ and social media influencers’ own uploaded photos. These images will go a long way in representing the product as realistically as possible, across all channels.
Conclusion: Introduce a little bit of digital to the physical store, to appeal to a customer base that wants to visit shops but misses the benefits they get online. And introduce a little bit of the physical experience to online sales, to appeal to the customer base that wants to shop online but misses the in-store experience.
Cater to the next normal consumer in brick-and-mortar stores
There is still much fear regarding Covid19. Even after a vaccine is rolled out and herd immunity is achieved, it is thought that pandemical habits and fears will be socially prevalent for months or years to come.
For brick-and-mortar stores to survive, they need to feel safe and they need to give shoppers an experience that they cannot get online.
Contactless shopping will be the new normal. Instead of rails upon rails of clothing that consumer after consumer touch and feel and cough on, products can be displayed as multi-sensory installations, without touch. Instead of hurriedly drawn-up signs that demarcate one-way systems, the layout of shops can be subtly modified to direct foot traffic along one-way systems. Such systems can be curated, much like an exhibit, with product installations at carefully, yet inconspicuously, spaced focal points. Providing shoppers with a sense of space and cleanliness, whilst steering away from perspex screens and stick-figure 2m apart signs, should abate pandemic fears.
Unique shopping experiences will be key to the survival of brick-and-mortar stores. Consumers who shifted to digital are likely to stay with digital even after the pandemic. Instead of being the end of the physical store, this could herald its rebirth. Physical retail spaces need to evolve into spaces that provide a unique experience of the products offered – experiences that cannot be had online. Coined “immersive retail”, it can mean offering unique product personalization, multi-sensory environments or social media enriched physical spaces that change and adapt with its customer base.
The Harvard Business Review suggests using a store as a stage. Installations, which convey a significant sense of the brand and the collection on offer, immerse the shopper in a contextual display that brings the product to life. Even prior to the pandemic, fashion was stepping into the realm of art installations. Gentle Monster a Korean eyewear brand, has been doing this for many years, attracting shoppers to their stores which feature centerpiece works of art that convey a sense of the brand but do not actually feature any of its products.
In the new Burberry store in Shenzhen, China, a “social retail store”, customers use a mini program via WeChat, a Chinese messaging app, to engage with the Burberry shop, book fitting rooms, pre-select clothes and play their own music while fitting them on. A rewards program offers “social currency” in the form of new clothes for online avatars and special dishes at the café. The store has various installations, such as a giant ceiling screen that changes in response to shoppers walking by. The installations are related to Burberry’s product themes, merging digital and physical and bringing the products to life.
A physical store does not need high sales to have a positive impact. Sometimes a physical store will offer an experience which then prompts an online sale. The visit to the physical store is part of the journey, enriching the customer’s experience of the product offering.
Conclusion: The next new normal customer will shop online more and be more hygiene conscious. Make physical stores a unique part of a connected journey, whilst being subtly but clearly Covid-safe.
Make the most of analytics
Analytics will play a pivotal role in helping retailers weather the pandemic storm.
From AI to trend analysis and foot traffic analysis, analytics will help retailers quickly gauge the success, or lack thereof, of any implemented change. Allowing them to modify and adapt strategies, continuously adjusting course whilst being buffeted by winds of change, in order to steer through turbulent times.
Conclusion: Reporting and analytics will play a key role in a retailer’s survival. Stay tuned for our 2021 blog series that will focus on the role of reporting and analytics in the post pandemic fashion Industry.
After the storm
The fashion industry’s forecast for 2020 was far from sunny skies and rainbows, but nobody anticipated the typhoon-filled thunderstorm that 2020 turned out to be. Fashion retail has taken a hit of epic proportions. Some optimists are hoping that once it is all over things will go back to normal; we can forget 2020 ever happened and pick up where we left off in 2021. However, the data does not support such optimism. There will probably be a recession bigger than that of 2008. Some fashion retail doors that closed for lockdown will never open again. Others will open under new management, swallowed up in the post-pandemic tsunami of mergers and acquisitions.
Other doors will open again, and the masses will throng to be let in to these physical and digital retail spaces, renewed and revived. Retailers that are stronger and more resilient for the hardship they have been through. Retailers that have invested in robust IT systems that support and enable their strategic decisions. Retailers who are more attuned to their ethos and their customer base than ever before, confident with the knowledge that they have what it takes to survive. The storms of the future are unknown, but these well prepared retailers stand a chance of keeping their doors open whatever the weather.