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Insights

How can you offer an in-store experience if you can’t deliver the basics?

In recent months, there’s been much talk of retailers needing to offer an experience on the high street – but is this really at the top of the British consumer’s shopping list?

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How can you offer an in-store experience if you can’t deliver the basics?

Since the financial downturn of 2008 and the boom in ecommerce, many established retailers have relied heavily upon cost-cutting in a bid for self-preservation.

Employee bases have been severely reduced – a trend that looks set to continue, given recent announcements from major players like Marks & Spencer, Tesco and Debenhams. This obviously has a place in a changing market, but it can often go too far and does nothing to combat dwindling footfall.

As such, the high street continues to suffer, as do British customers. Our State of Retail Report discovered that 62.1% of people don’t think UK retailers are working hard enough to create a shopping experience worth the time and cost of visiting their stores, while almost 43% of respondents feel that customer service in UK retail stores has worsened over the last ten years. Fewer than one in five believe it has improved.

When presented with a wide range of options, the majority of people (52.5%) also underlined that poor customer service is the main factor that discourages them from shopping with a retailer again.

The high street’s shift towards a more self-service experience, while reducing costs, seems to have inadvertently levelled the playing field with pure-play ecommerce rivals. Now, they need to consider how to rebuild that advantage, using the assets that separate themselves from online-only counterparts.

Come back to what you know

Many retail commentators talk about the need for the high street to create better experiences to lure consumers back to bricks and mortar retail. Some businesses interpret this as introducing a well-stocked café, product demonstrations, fashion shows, or simply ramping up the free giveaways.

Yet for all the intelligent technology and logistics infrastructure in the world, service is a crucial layer that bonds the retail experience together, and one that consumers tell us is severely lacking.

Let’s briefly reflect upon one of bricks-and-mortar retail’s greatest modern success stories. Apple’s stores, while being glass-fronted and inviting, do nothing out of the ordinary. Yes, it took its machines out of their boxes, connected them to the internet and encouraged consumers to interact with them. But the steps it took to truly buck the retail trend was to invest heavily in well-trained, friendly and abundant staff. It made its number-one priority customer interaction, empowering them to give great service.

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Can you have your cake and eat it?

Sometimes, the most unlikely places provide the best examples of the way to do things right. McDonald’s, in particular, offers an excellent approach to customer service which has become such a part of its fabric, it’s continually overlooked due to its industry roots.

Over the last few years, the fast-food giant has installed self-service kiosks in the majority of its restaurants, but rather than using this as an incentive to cut employee numbers, it instead repurposed these roles to offer a new layer of service for customers, targeting table service, cleaner restaurants, and even just having someone on hand to give kids balloons.

Further afield, service and certainty was a core theme during our trip to Abu Dhabi’s Yas Mall, and nowhere more so than with its sprawling Lego experience. For approximately £2 entry, we experienced its “Pop in and Play” concept. Its walls were giant Duplo bricks, and within these were different product-line building tables for Star Wars, Disney, Technic and more, catering for young and old.

Huge rollercoaster roads created one centrepiece, allowing customers the freedom to build their car and race them against others; those with more digital skills could instead enjoy one of the five PlayStations, each one featuring a different, recently released Lego video games. Every single product being demonstrated was in stock and available to purchase.

Most importantly, brand ambassadors were on hand to enhance the experience, offering advice and support to anyone interested in Lego products. It’s something an online rival just can’t replicate.

Relaying the foundations of retail

While technology, underpinned by cost-cutting measures, has been well used to make the customer experience more efficient, it also regularly replaces – and sacrifices – what consumers want: knowledgeable and helpful staff, a personalised experience, and good service.

As outlined throughout this report, the correct investment in technology can remove substantial costs from omnichannel retail while driving up footfall through more aggressive online positioning and improved click-and-collect services.

But to maximise benefit from these initiatives and realise the full value of growing an engaged, high-frequency, multichannel customer base, the store service level must meet the customer’s expectations.

Insights

If there’s one thing high-street retailers must invest in during 2019, it’s this

To make the biggest impact across all channels in 2019, high-street retailers must drive towards accurate inventory, as both customers and the businesses themselves will stand to gain incredible benefits from it.

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If there’s one thing high-street retailers must invest in during 2019, it’s this

2018 was the worst year for retailers since the recession of 2008, and with tougher projections for the near future, many businesses are understandably concerned about what’s best to invest in – if anything at all – next year.

In 2019, they're presented with a simple choice:

  • Hold firm and wait for the economic picture to become clearer before making major financial commitments; or
  • Continue to build service offerings in the hope that it will improve fortunes in the longer term – or simply counteract the widely perceived downturns the nation may face in the coming months and years.

But the high street now finds itself at a crossroads in omnichannel retail, and “playing it safe” no longer means locking down the coffers. Instead, safety is through future-proofing, effectively safeguarding businesses from the prospect of being forced to catch up later – the type of delayed responses that have seen many slow-moving retail monoliths damaged, or even destroyed.

With this in mind, we believe there’s one thing all multichannel companies must invest in, regardless of their strategy, as soon as possible. Not only is it a service offering that will respond to huge consumer demand, but it’s also a fundamental benefit that will help revolutionise and update the core infrastructure of a business – and build loyal revenue streams in the long term.

It’s not the most glamorous technological marvel, nor is it even that new – but it’s criminally overlooked.

It’s all about knowing what you’ve got

If a business needs to invest in 2019, it must be into accurate and live visibility of stock across both online and offline channels. The ability for both retailers and their customers to have direct access to stock information is critical to success for a wide variety of service offerings – offerings we know are very popular among shoppers.

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As long ago as 2015, Professor Bill Hardgrave, a professor at Auburn University in the US, said as much to the National Retail Federation conference in New York, stating: "Accurate inventory is the single thing retailers have got to get right for everything else to work." Yet this hasn’t quite registered in the UK, and our own research has only underlined demand for it.

In our 2018 State of Omnichannel Report, we discovered that nearly three-quarters (71%) of the British public value accurate store stock check as “important” or “extremely important”. This data went onto frame our first-ever Retail Experience Score (RES), which graded 40 fashion retailers on both store stock check and click/reserve and collect, as well as same-day and next-day delivery. All these services – and many more – require accurate inventory technology, tools and practices to work effectively.

Whether this inventorisation is powered by higher-end investment in camera and weight-based systems, through the adoption of per-item radio frequency identification (RFID), or just with regular, accurate stock checks akin to Amazon, this investment directly responds to the ever-increasing demand of customers – whether they realise its role or not.

Fundamentally, the future of the high street is not about the tech you’re using – it’s the services you’re powering.

The true benefits of an accurate inventory

Citing the long game is not often the best means of making a case for serious business investment in testing times like these; a quick-win state of mind instead tends to be prioritised, especially as so many rivals lose market share, or drop out of the market entirely.

However, this must change. As soon as a consumer experiences something done well, whether it’s online or offline, it becomes the new benchmark in their mind. With regular use, it quickly establishes itself as the norm. Given that a handful of omnichannel retailers have already made accurate inventory a core part of their business, the rest of the pack is already playing catch-up.

There are too many reasons why accurate inventory can improve the high street’s fortunes – and some may even be more obvious than you realise.

Best-in-class in-store C&C

Accurate stock check unlocks the ability for retailers to offer instant click and collect – what’s more, it also allows them to ringfence stock upon an order being made online, therefore building a trustworthy relationship with consumers.

Argos has rightly made a name for itself with customers who need something immediately, though it can lack the level of expertise in certain product categories when compared to specialists. These sector leaders can offer better prices, as well as a much wider range of goods; simply getting up to the same lightning speed as Argos on C&C may be all that is separating them from getting additional sales.

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We’re huge fans of click and collect for so many reasons, but the biggest bonus is the guaranteed footfall it gives high-street businesses – something which has faced “unprecedented” decline in 2018. The opportunity to upsell in store, with less faceless and more experiential means of connecting with the customer, is the one thing bricks-and-mortar businesses can offer over their pure-play ecommerce rivals – and fast, free C&C is the gateway to this.

Better, faster and cheaper delivery options

If the customer can’t come to you, then you must take the products to them – and with accurate stock check, delivery methods and customers alike will benefit, subject to a carefully thought-out approach to logistics.

If a business operates a network of shops with an accurate inventory view, there’s the opportunity to ship from store and not just from a central warehouse. By delivering parcels on a more local level, trips are shorter, less petrol is used, and local couriers can be partnered with on a store-to-store basis.

Delivery options immediately become much better:

  • Standard delivery could be quicker and cheaper, and may open the doors to a best-in-class free delivery option, regardless of minimum order – something that is a standard for many pure-play ecommerce providers;
  • Next-day delivery could be potentially ordered up to a later cut-off time, even rivalling the midnight deadline offered by the likes of Next, Debenhams and Missguided;
  • Same-day delivery, which is no longer offered by any of our RES’ fashion retailers (following the capitulation and takeover of House of Fraser), is much more possible. While this option might be limited by store proximity to begin with, the continued refinement of logistics could make this possible for countless businesses with a clever use of accurate inventory.

Accurate in-store stock check

Often, the simplest benefits are the best. The modern, smartphone-powered public knows to go online to check if something’s in stock near them, then will happily walk off the beaten track to get there or fix an entire lunch break around this purchase. Knowing that a store definitely has a copy of the latest game, or a gift they can give their friend that night at a last-minute, post-work birthday gathering, is often all it takes to get them in store.

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While you’d think that accurate store stock check is an industry standard, the reality is far from this. We conducted research into 100 of the UK’s biggest high-street retailers across a variety of sectors, only to discover that less than half (43) had stock check, and only 23 were accurate. Put simply, the market is wide open for businesses to emulate the success of top performers and continue to build on it from there.

Live tracking of in-store stock

With accurate inventory, the most immediate benefit is the live tracking of stock: when it’s low, where it’s needed the most between stores, and knowing when to restock shelves or entire product lines. Fashion retailers can keep track of demand for different clothing sizes; tech sellers can know when to put remaining older items on sale; any business can spot opportunities to move stock between stores if one location performs better than another for a certain product.

Businesses can also use real-time notifications of out-of-stock items to organise product replenishment. By doing so, they can let the customer know when next batch will be in store by cross-referencing data gleaned from its internal delivery ecosystem, which also uses merchandise tracking. A lot of these insights should exist today but if your stock count is out, the data is useless.

Improved checkout technology

While the technology is still being perfected, it has ironically fallen to an ecommerce giant to show how checkouts can be done to the most convenient degree on the high street. Using its own system, Amazon developed Amazon Go: a grocery store where you scan to enter, walk in, take what you want, then walk out – knowing it’s been paid for. All this relies on accurate inventory and, while this does come with its own drawbacks, it’s a vision for the future of convenience.

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On a simpler level – and one that still goes beyond the standard expectation of a high-street shopper – accurate inventory, specifically with technology such as RFID, can make basket processing and payment nigh-on instant.

A more experiential in-store draw

As we found with our trip to Zara Westfield Stratford City, businesses are already using inventory tech to power other interesting ideas and concepts. While Zara’s RFID-powered interactive mirror was far from perfect when we tried it, we had to give it plenty of credit for trying something new and different. If and as they refine its usefulness, the value to the customer will increase dramatically as a personal shopping assistant.

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Businesses are only limited by their creativity, and by harnessing the simple technology that accurately tracks their stock, they can develop something altogether more experiential for the customer – an idea that brings them back into store regularly, whether they’re planning to buy or not.

Match the rest, then beat the best

As we’ve found through our research – and is often plainly obvious from market juggernauts like Amazon – companies with accurate, live inventories are leading the retail sector. While some like Argos invested heavily many years ago, these systems have continued to evolve to provide an ever-improved service that gives customers the reliability they regularly crave, particularly if they need things quickly – it’s not always about the price.

Retailers need to deliver this convenience first and foremost, otherwise they might not even exist in five years’ time. Once this convenience is secured, they must consider the experience and what their brand means to the customer, otherwise they'll just be tied into a transactional, and ultimately fickle, relationship.

As 2018 proved, no business is too big to fail, especially when pure-play ecommerce continues to deliver certainty and great service, often at low prices. But despite their proliferation of pick-up locations, online-only companies only offer an omnichannel presence to a degree; they have no means of upselling from physical locations, once a customer arrives to pick up their chosen goods.

This is exactly where omnichannel retailers can retake ground, but they first need to match their online challengers with powerful inventory management. From there, they can deliver the real blow, leveraging their unique ability to deliver something truly experiential.

Most retailers seem to have become disconnected from this fact due to cost-cutting exercises, when this is one investment that could ultimately deliver heightened service alongside significantly reduced costs. It’s time they remembered what they can offer above and beyond their internet rivals.