Has anyone mentioned that it’s been a strange year?
What about calling it an “unprecedented time”?
You might be surprised to hear that 2020 has caused a bit of a stir in retail and e-commerce.
The world was already trending towards online purchasing and “omnichannel” had become a bit of a buzzword.
The rise of ‘Omnichannel’ retail
Since starting Natural Cosmetics, I've been looking more into running a store.
After researching what exactly is entailed for e-commerce brands who dream of owning a bunch of bricks and sticking their logo on the front, I've had a groundbreaking realisation:
It's not cheap.
It's absolutely essential that you squeeze every penny out of an investment like setting up a brick and mortar store.
On top of that - merchants have recognised, over the past few years, that their customers were:
- Standing in store and checking prices online
- Purchasing online with the intention of collecting in store
- Browsing online and expecting to make the purchase in a store
and everything in between.
As a brand/retailer with an online offering and physical stores, this influences your promotional efforts, pricing strategy, your product mix in store and the way in which you attribute revenue to various activities.
The Opportunity
The opportunity to let this, more holistic approach to the customer experience, make your fulfilment operations more efficient is often overlooked; even by major retailers.
We’ve seen a whole horde of household names and globally recognised brands dying this year as a direct result of their inflexibility and inability to see the potential of an online offering (30 years after e-commerce first starting to grow…)
It’s always sad to see but it is also natural selection at work in the retail industry!
Crisis always exposes inflexibility; we see examples of it all around us.
Assuming you’re one of the brands looking to embrace omnichannel and you already have an online offering which is working for you and physical stores which are performing well (all things considered) there are other trends and developments to stay on top of.
Introducing dark stores...
You might have also heard about or noticed a rise in “decentralised darkstores”.
This is actually a fundamentally different topic to what we’ll look at today.
A dark store is essentially a fun buzzword for a warehouse.
Their rise has been accelerated by lockdown measures in various countries. These measures have meant that traditional physical retail stores haven’t been able to operate as they usually would.
Often laid out in aisles with a similar appearance to a physical store, a dark store is not open to the public for making purchases. It is used instead for distributing orders placed online or as a click-and-collect pickup location.
If you’ve got refrigerated goods available for local delivery, for example, then you can benefit from having a store set up purely for fulfilling your online orders.
Think Tesco, Sainsbury’s, etc.
They need good access to roads and transport networks and you save the money of paying for retail staff in an area that would have historically performed poorly as a point of sale location; despite having a strong online customer base in the area.
4 Ways to Make the Most of your Physical Stores
To go any further let’s assume that you’re already on board.
You’re totally “bought into” the idea of using your stores as more than just a point of sale location.
You’re bouncing off the ceiling in excitement after reading my refreshing take on why NOW is the right time to use your shop for things like in-store fulfilment.
We’re going to embrace the idea of providing a “Store-to-door” experience and making the most of your expensive retail property.
Let's make sure that you’re seeing the best ROI from your physical stores!
Here are 4 ideas for how you can make the most of your physical stores
- Using your stores as a local distribution hub for rapid delivery to local customers
- Using Stores as a Fulfilment Centre for online orders
- Creating a ‘Store Experience’
- Using Stores as Office Space
Can you think of any other most important ways you can use your brick and mortar store, except as a point of sale?
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1. Local distribution hub for rapid delivery to local customers
When you first choose where to set up a new physical store, it’s pretty normal to decide to set up shop near your existing customers - or in a place where there’s likely to be interest for the products you sell.
This means that you have at least some stock of your products near a bunch of your customers.
I’m assuming you’ve heard of Carryr because this is a post on their blog; but in case you haven’t...
You know Klarna?
Have you heard of Uber?
If they had a baby it would look like Carryr.
A solution which allows brands to deliver in under an hour in some parts of the UK, delighting their customers. Carryr gives them the flexibility to choose their delivery slot and the option for rapid delivery.
The idea is that Carryr will pick up the parcel from your store and deliver it locally to one of your customers.
Prime made it "the norm" to expect next day delivery as an option, with Saturdays included.
I’d predict that a solution following Carryr’s model will become "the norm" for businesses with more than 1 or 2 brick and mortar stores in the very near future!
2. Use your Stores as a Fulfilment Centre for online orders
It’s 2020.
It’s not only been a messy year, but it’s now been a good while since you were first introduced to the idea of owning a physical store AND a webstore.
The practice of ‘Ring fencing’ stock for online orders in your warehouse, then going out of stock in your physical store - therefore losing potential sales - is inexcusable.
With intelligent tools like Veeqo around to help you manage your inventory and warehouse operations; allowing you to forecast what stock is needed and where it needs to be while allowing you to ship-from-store…
Why settle for anything else?
You wouldn’t do your accounting without an accounting platform, you wouldn’t battle legal issues without a lawyer.
Why would you manage omnichannel inventory without a dedicated omnichannel inventory system?
Use your store as a pickup location for your chosen shipping carrier. Use your warehouse as a point of sale.
It just makes sense.
3. Create a ‘Store Experience’
Brompton Bikes have friction in their sales process.
They’ve created an experience. Every bike fits their owner. They pull you in with their website as an acquisition channel and then drive you to the store for your large purchase.
Of course, you can order accessories and some basic products online - but their goal is to get you into the store.
Some of us have been brainwashed into thinking that all friction is bad.
Optimising the conversion rate on our website, providing a seamless returns experience, filling out our descriptions on marketplaces…
Give the customer all the information and make it as easy for them to purchase as possible!
Brompton are using their stores for servicing, accepting returns, collecting orders placed online and - most importantly - to guide you through the purchasing process with the help of experts.
People used to go to the {enter your preferred generic tech store name here} store when they needed a new PC.
Then the internet came along and they were empowered with all the information they needed to make an informed decision on buying their own PC.
Then the internet got HUGE and there was far too much information available.
People were overloaded with information and needed the help of an expert again! Give them that.
The other side of using your store to create an experience is to make an effort to bring that in-store experience online.
Live streams conducted from within the store, announcement videos, podcasts - any kind of marketing material you’re creating is automatically more authentic when created inside your store.
Invite your online customers into your store via videos, tours, etc.
How we can possibly bring the store feeling of “being taken care of” by excellent customer service and sales staff?
Great content set in the store seems like the simplest way!
Remember when Gymshark revealed their first physical store?
Yeah, that.
4. Using Stores as Office Space
The idea is as simple as it sounds.
Property is expensive - having a warehouse AND a shop AND an office sounds like a lot when one building could do all three!
There’s also been a buzz lately in e-commerce around “all hands support” with your ticketing/help desk system being used a little by every department in the business.
The concept involves staff from marketing, product, etc. getting involved in answering customer queries which are pertinent to them.
The three major benefits of all hands support are:
- Relieving stress and workload for your customer service department
- Insight for your other departments after experiencing frontline contact with your customers (businesses that use this approach should be hearing “you know, this customer is actually making a good point…” pretty often.)
- Better cross-departmental teamwork and a greater feeling of participation
Using your stores as office space could have a very similar effect.
2020 has pushed the world into a far more remote-ready state.
Centralised head offices to bring all of your departments into one building are less necessary now than they've ever been.
Imagine if your business used your stores as office space and vice versa?
- Great insight into the customer experience and feedback for members of other departments
- Additional supervision of (and collaboration with) retail staff
Obviously this could be tough to roll out across 400 locations worldwide...
However, if you have 5 or 10 stores then there’s usually no reason for at least your flagship store to not include your head office!
Making the Most of your Brick and Mortar Stores
Owning property is generally an expensive (sensible) investment.
Leasing or renting your commercial property is typically extortionate depending on your area and landlord.
Make sure you’re making the most of the property which you’re spending an absolute fortune to run!
This can be achieved when you:
- Use your stores as a local distribution hub for rapid delivery to local customers
- Use Stores as a Fulfilment Centre for online orders
- Create a ‘Store Experience’
- Use Stores as Office Space
I hope you’ve enjoyed this take on why omnichannel operations are an important evolution for both brick & mortar retailers as well as e-commerce merchants
Feel free to get in touch with me via LinkedIn - I’d love to hear your thoughts on this article.
What do you think will be the norm in 3 or 5 years?
Are Amazon drones going to take over the fulfilment space?
