4 Ways Technology Makes Retailers More Agile
By Kate Prohorchik, Iflexion
What do disposable gloves, bread makers, and cough syrup have in common?
These e-commerce categories have benefited most from the ongoing COVID-19 pandemic.
If someone told you back in 2019 that you could make the deal of a lifetime selling bread machines, there’s a good chance you would question their sanity. Fast-forward to 2020 and the demand for bread makers is soaring, while major American retailers like Century 21, Brooks Brothers, or JCPenney are threatened with demise.
The realities of retailing amid the pandemic and the resulting economic downturn are dramatically shifting. While some branches are — quite unexpectedly — flourishing, others are left hanging by a thread. For too many retailers, the once trite phrase “hope for the best, prepare for the worst” has turned out painfully right. Business owners who are most likely to persist are the ones who know how to adapt to disruptive market forces, on short notice.
Why Do Retailers Need Agility?
The term ‘agility’ has been so overused that it lost much of its original appeal. But marketing jargon aside, agility is genuinely essential to drive long-term business growth and remain competitive in the turbulent retail market.
Dictionary.com defines agility as the power of moving quickly and easily; nimbleness. Indeed, in retail, agility is all about market responsiveness: being prepared to grasp opportunities as they come and weather the storm when it happens.
Research shows that retailers have recognized the urgency to become adaptive through a changing environment in the face of the virus outbreak. As Bain’s study reveals, 41% of supply chain decision makers now rate agility among their top two priorities, a rise by 24% compared to the pre-COVID-19 era.
But how can retail brands beef up their agility? Let’s see.
#1 Keep Up Via An Inventory Management Platform
The guiding principle behind success in retail is quite simple. You need to be where your customers are. And in 2020, 63% of them are avoiding brick-and-mortar stores and instead are shopping online. Consumers are present in more locations than ever. Therefore, the more ways to buy you offer, the more potential buyers you can attract. Here’s where multi-channel retail steps in.
Using a multi-channel strategy, you can cater to your customer needs across various locations, including online stores, social media, marketplaces, comparison shopping engines (think Google Shopping), and more. However, be careful — each extra channel increases the complexity of inventory management.
Consider this scenario: you sell products via a physical store, a proprietary e-commerce platform, and a social media marketplace. When you run out of stock for an item in the brick-and-mortar, you need to update the other two channels’ stock data immediately. Otherwise, you’ll end up either selling non-existing products or sending your customers away empty-handed (and infuriated).
Managing inventory manually across different channels through spreadsheets, emails, and calls is simply off the table. It will likely lead to overstocking, understocking, backorders, and preventable returns, all of which tarnish your reputation and ruin customer experience.
Fortunately, there’s an alternative. An inventory management system will keep track of all inventory changes across all channels. A centralized hub that accumulates all products, channels, and orders in one database, such a platform will monitor all updates as they come. It can provide you with real-time visibility and synchronization of your stock levels, even as you expand to additional channels.
#2 React Immediately With Headless Commerce
According to estimates, there are up to 24 million e-commerce sites across the world. Online retailers are vying for consumer attention, and to grab it, they need to experiment quickly and innovate fast, delivering fresh, personalized content aligned with ever-changing customer preferences. Just think about Netflix or Amazon — they update their user-facing apps thousands of times a day!
Unfortunately, traditional monolithic CMSs lack the flexibility to allow immediate changes to e-commerce storefronts. Every update must be scheduled and entails laborious and costly system upgrades. To overcome this issue, online retailers increasingly switch to headless commerce, which allows them to instantly update content across different touchpoints (web browser, mobile apps, IoT devices) without major backend customizations.
Headless commerce is a solution architecture that decouples the presentation layer of an e-commerce platform (the head) from the backend infrastructure. It uses RESTful API to communicate between the two layers, allowing developers to modify and add content on e-commerce sites practically on the fly.
As a result, retailers can deliver a cohesive and personalized customer experience across any device and platform to enhance sales opportunities. All changes are reflected instantly in the customer-facing layer, allowing developers, UX designers, and marketers total freedom over published content and campaigns.
As backend effort decreases, retailers reduce IT costs related to the development and maintenance of their legacy CMSs. Through its flexibility, the technology also makes it easy to scale into new markets and regions.
#3 Glance Into The Future With Predictive Analytics
Customer-centricity is one of the core features of an agile retailer. By proactively responding to buyer needs, retail brands build loyalty and reduce churn. Understanding what consumers will buy instead of just knowing what they already bought allows retailers to make their offers more relevant, increase conversion rates, and boost sales.
One tool that is instrumental in gleaning these insights is Big Data analytics. It examines customer attributes and interactions to reveal individual buying patterns, purchase motivations, engagement, and other meaningful information. Retailers can use this knowledge to align their products with customer needs, target each buyer with marketing campaigns, or tweak the pricing models.
But anticipating buyer behavior is not the only use case for predictive data analytics. Machine learning predictions also can be applied to optimize the supply chain, personalize the in-store experience, enhance promotion effectiveness, and accurately assess demand. Imagine if you had predicted that bread makers would be the next big thing in 2020!
#4 Gain The Edge With Retail Automation
Retail automation is an umbrella term that spans everything from marketing automation through self-service kiosks to robot sales assistants. Automation solutions provide a slew of advantages, especially for fast-growing brands that want to tap into new markets and sectors without increasing headcount.
By automating different retailing aspects, business owners save hours on manual work, drive labor cost savings, and speed time-to-market. By streamlining and accelerating key processes, they can respond quickly to abrupt changes, such as spikes in demand. All of these gains contribute to the customer experience, and ultimately, the company profits.
Depending on the area of application, retail automation solutions can streamline back office processes as well as customer-facing jobs. For example, business intelligence solutions integrate data from different systems, databases, and files for a comprehensive data analysis of your business. They reduce repetitive tasks associated with data collection, assembly, and analytics, providing precious insights quickly.
Marketing automation tools facilitate tedious marketing tasks, such as sending out bulk emails, following-up purchases, placing ads online, or managing loyalty programs. Apart from automating cash registers and checkout, retail POS software can integrate with inventory management systems to automatically adjust stock levels and even reorder items that are running low.
When it comes to customer-facing automation, self-checkout, retail kiosks, and vending machines have already become commonplace. They significantly reduce waiting times, decrease cart abandonment rates, and improve storage capacity. With the first commercial rollouts behind us, autonomous delivery vehicles are another automation solution making waves in retail and e-commerce.
Closing Thoughts
Even though the social and economic impact of COVID-19 remains unknown, the pandemic has already wreaked havoc on global retail. To overcome the worldwide crisis and mitigate its impact, retailers have to reinforce their agility. Technology is essential in this, providing new ways to endure tough times and build resilience for the future.