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.
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.
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.
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.
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.
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.