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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.

Insights

Free and fast click and collect: The next industry standard

Fast and free click and collect isn’t just nice to have – it’s a necessity if you want to remain competitive and keep people coming to your store.

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Free and fast click and collect: The next industry standard

Imagine a world where a new retail store opens and, to cover the initial overheads of the venture, it levies a £5 entry fee on all shoppers.

Of course, it’s ridiculous to make someone pay for the privilege of entering a store to potentially spend money – but in today’s retail environment, that’s exactly what you’re doing if you’re charging people for your in-store click and collect service.

Fast and free click and collect isn’t just a bonus to offer customers. In fact, the British market expects the service more than any of its European neighbours, and demand is only set to grow.

As per the IREU Top 500, 67% of the UK’s top 500 companies offered C&C services at the end of 2017. In fact, the UK was the only major country on the continent to beat the EU average of 64%. To stand out from this crowd, many high-street staples have already made the service completely free, whatever the cost: Argos, Next, Matalan, Marks & Spencer, Boots, River Island, Mothercare and Game are just a few who are in on the movement, whether they offer immediate collection or require a several-day wait.

We now live in an age when companies are investing heavily into an omnichannel approach that reverses the marked drops in high-street footfall by harnessing and integrating – not fighting – the power of ecommerce. As these companies take advantage of the increased expectation of free C&C by adopting it, the paid click-and-collect model will increasingly count against a retailer, especially as online-only services look to make delivery costs free, or keep them low, to compete in kind.

But aside from simple rivalry with other companies offering the service without charge, there are countless justifications for adopting a free – and, ultimately, quick – click-and-collect model. Whichever way you look at it, the pros hugely outweigh the cons.

Consumers already think they’re doing the hard work for you – and it still isn’t free

The first point is perhaps the most obvious, but also one of the most important. Simply put, the act of collecting a parcel from a store with free C&C still isn’t free for the customer.

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Admittedly, one of the core reasons many people prefer C&C is because they’re not home to take delivery; unless there’s the opportunity to name a “safe place” such as with Amazon Prime, chances are there’ll be the red slip of disappointment on the other side of the door when they get home. Nonetheless, the act of picking up a parcel from a delivery office, while frustrating, is often just as annoying as a trip to a store.

At the base level, time really is money; a customer could be sacrificing their lunch break to retrieve a package just to make sure they get it when they need it. That’s if they’re even able to make the journey on foot. While many shoppers live in towns and cities where collection might only entail a 15-minute walk – which is still a sizeable round trip – others must rely on a car or public transport, incurring travel costs, the possibility of parking charges, and the very real frustration of traffic.

You get another opportunity to sell

If you think that a C&C transaction begins with a click of a mouse and ends with the customer picking it up, you’re doing it wrong. With click and collect, you already have a captive buyer’s mentality. If you’ve already convinced someone to spend money with you, they’d do it again with the right deal – so long as it’s seamless enough in the overall shopping experience.

As we discussed in our 2018 State of Omnichannel Retail report, customers picking up a C&C order in store could spend an average of 12% more – while returns recoup added a further 18%, as you’re keeping an engaged customer in a purchase loop. Shoes don’t fit how you want them to? Here, maybe these might. Need some insoles to complete your purchase? We’ve got them in your size.

Sometimes, the upsell is easy. If you’re picking up something more unique such as a tent, there’s a good chance that plenty of other in-store items complement the order: spare tent pegs, an outdoor stove, a waterproof jacket. Other companies know that conversion in their store may require a little more cajoling for the average C&C customer, so they may offer a discount to those willing to explore the shop – a 10% voucher alongside their collection code might sweeten the deal.

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But even businesses which choose to do nothing special in store will potentially damage brand loyalty by offering a normal click-and-collect counter that costs the same price as delivery elsewhere – sometimes, even next-day delivery. If a customer has already bought the product from you, and they’ve spent time and money getting to a location they might not (or never) wander into under normal circumstances, why should they pay a third cost for a service that put them in your grasp in the first place?

C&C tracks the effectiveness of a marketing budget – and improves loyalty

On any given day, marketing departments spend vast amounts getting people to shop in-store or online, but struggle to track the source of conversion of store sales. C&C makes this difficult task a whole lot easier because the initial sale is tracked online, along with any ancillary sales appended to the transaction at the point of sale.

With click and collect, you’re closing an important gap in marketing insight. You can see how the sale was acquired – from a newsletter, PPC ad, and so on – and track a customer’s actions beyond that (analysing upsell or understanding which other products they’re interested in). Once you’ve got this information, you can remarket to this audience with specialist discounts, and use unique codes to improve your understanding of these customers, boosting loyalty and quality of service with every sale.

Opportunity knocks: Free C&C removes another barrier to purchase certainty

With free and fast click and collect, orders are a much safer bet to secure customers, whether they’re an impulse buyer or otherwise – and you only need to consider the purchase path of any standard marketing campaign to realise where custom may be lost without this service.

Say, for example, you decide to run a sale from a Monday, both online and in-store, and you have free C&C. Someone catches an ad and decides to click through, sees something they like, but home delivery may be unappealing or inconvenient. However, they can get into store on the weekend, as they were going shopping anyway.

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Fast, free click and collect will get their item in store at a time that suits them. From a business perspective, it secures the deal there and then, committing the customer to a purchase. Otherwise, you leave yourself open to a lot of sale-derailing possibilities: customers may find the product with a competitor; another personal engagement may derail their plans to shop; their personal needs may evolve; their financial situation my change during the week; or they may simply forget. Even if they do make it into the store, the one thing they had their eye on may be long gone.

With speedy, free click and collect, you break down that barrier to a sale and secure the money there and then – and take their custom off the table along with it. Customers’ attention spans are now shorter than ever, and if you get a chance to bank the spend, you’d be wise to take it.

Multichannel customers are more valuable to a retailer. They're more engaged with a brand, while their flexible approach to purchase platforms makes them more frequent shoppers. Free C&C encourages this dependable, captive audience to use stores more than online. In turn, it exposes them to new products, whether they’re related to their purchase or not, as well as the power of visual merchandising – overcoming the filters or searches they may usually limit themselves to when shopping on the internet.

With the carrot of free click and collect, customers will better explore what a store has to offer, experiencing a brand in the traditional way, and at a time when people are beginning to forget what physical stores can provide. It’s one of the few strengths of high-street retail that online platforms massively struggle to replicate; even Amazon, the powerhouse of ecommerce, is saddled with a poor search function, imperfect filters, as well as a “you may also like…” feature that often seems more like a series of guesses than informed recommendations.

Putting a human face on an otherwise faceless experience

Many customers have a simple ethos, especially with products that are sold in several places: wherever the product’s cheapest, they’ll buy it from there. But by luring people into stores with fast and free click and collect, you get more chances to showcase your brand to this captive audience – or a new customer entirely – so long as you give them a fulfilling experience. This could be through expertise, recommendations, or just high-quality customer service, but it all works.

In the simplest terms, a pleasant and helpful customer experience could not only result in a repeat order regardless of the price, but it could have people checking out your shop more often, knowing exactly what to expect from your business. This is something you can’t guarantee, and certainly don’t expect, from a delivery driver.

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Those that see paid-for click and collect as dispensation for logistical outlays are the ones that will suffer in the next round of retail closures. Right now, logistics pressure on C&C only exists due to a lack of in-store stock-check investment – and this is something that also needs to be prioritised if businesses are going to power instant reserve and collect.

These popular offerings cannot exist without fast and free C&C, which sweats store assets hard and maximises the value of omnichannel retail. What’s more, it removes constraints and pressures from distribution centres and gives the customer both certainty and convenience.

Every successful company will adapt its business based on demand, and now it’s more important than ever to carry a large and loyal customer base into your future. Companies of the present (and, sadly, past) have kicked themselves for not matching consumer demand, whether it was through the correct ecommerce strategy (if any), using a mobile-first approach during the boom in handheld devices, or simply developing their social media profile to engage with the audience they cater to.

Like these ever-evolving business, digital or omnichannel requirements, click and collect is not a fad. To stay competitive, it must be fast and free, otherwise it’s a customer tax – a tax businesses can’t afford when they’re getting fewer customers through their doors year on year.