The Retail Revolution: Innovation Must Be At The Heart Of Every Business Strategy
By Josh Roffman, Loftware
Even before the pandemic, the retail industry was in the middle of a revolution. However, this has vaulted forwards rapidly in the last two years. According to the U.S. Department of Commerce Retail Indicator Division, e-commerce sales were $870 billion in the U.S. in 2021, a 14.2% increase over 2020 and a 50.5% increase over 2019. Indeed, e-commerce represented 13.2% of all retail sales in 2021 in the US.
Although there is still a place for the brick-and-mortar retail store in today’s post-pandemic world, online shopping is set to stay. In this article, we explore some of the challenges that these new operating models bring and why innovation must be at the heart of the retail industry.
Managing The High Volume Of eCommerce Returns Is A Challenge
Online retailers are dealing with 20% return rates (versus a more typical 9% rate for brick-and-mortar sales). This means retailers are suddenly faced with a mountain of product returns that must be received, processed, marked down, ticketed for resale, or disposed of.
To manage the intricacies of online product returns —including the option to return in-store — companies need a system that can handle all aspects of ticketing and tagging, from printing the labels and tickets that are sent with the initial order, to reprinting the tags for returned items. By leveraging the flexibility of digital infrastructure with the cloud, companies have new capabilities enabling them to create new efficiencies, print faster, and speed time to market.
Price Agility Is A Competitive Differentiator
It’s not enough to have the best garments if you can’t get them in the hands of the customers faster than the competition. Using legacy ticking processes, retailers have to set pricing information, share it with the ticketing department or external bureau, and then wait three to six weeks for the printed tags to arrive and be placed on garments.
This is an eternity in the fast-paced, post-Amazon world of retail, where companies know that they need price agility. Pricing and ticketing have to be moved closer to the rack, so retailers have the flexibility to alter prices to respond to changing market conditions. The time gained by making this transition can be the difference between selling garments at the optimal price or having to offload them to off-price retailers. In an industry where missing seasonal windows equates to missed sales, waiting six weeks for bathing suits to be tagged for sale isn’t an option.
Ticketing Is Happening Closer To The Line
Historically, ticketing was handled by a separate department or outsourced to a ticketing bureau. There, teams of employees would print tickets, rubber-band them together, and then distribute them to the line. This siloed and highly manual process was as time-consuming as it was error prone.
Where it may have sufficed when an apparel company’s primary sales channel was a brick-and-mortar store it doesn’t hold up in the e-commerce era. Seeking improved speed and agility, companies are moving away from ticketing bureaus and using inline printing for hang tags and other identification. This not only speeds up the process itself, but also enables quick changes (as needed), reduces errors and rework, and allows companies to get their apparel to market faster.
Traceability Has Become Critical
Traceability has become increasingly important for apparel makers and retailers that are being asked to use unique product IDs and adopt serialization methods. In light of these evolutions, extending labelling to supply chain partners and ensuring high availability for these solutions — due to time to market and competitive pressures — have become table stakes for today’s apparel retailers.
The Future Of Retail Is Innovation – Keeping Up And Staying Ahead
To successfully adapt to these challenges, and stay one step ahead, innovation must be at the heart of every retail strategy. Labelling is no exception to the digital transformation that has taken over the apparel and retail sectors. As the connective tissue that brings apparel manufacturers, retailers, and consumers onto the same page, the ticketing and tagging process has become more important than ever. Labelling solutions that drive this process are understandably being increasingly recognized as business-critical systems.
Over the past two years, the risks and challenges in the retail landscape have been front and center in boardrooms as the sector adjusts to new realities. These issues will continue to flare up and business leaders have a responsibility to tackle these issues head on. That’s why retail companies that prioritize innovation and place digital transformation at the heart of their labelling strategy will have a competitive edge and set themselves up for future success.
About The Author
Josh Roffman is SVP of Marketing and Product Management at Loftware.