Increased Consumer Demands Drive Retailers to Long Term In-Store Order Fulfillment Strategies
New research from Scandit highlights that successful in-store order fulfillment strategies have enhanced customer satisfaction and loyalty by 88% according to US retail executives. Accelerated by COVID-19, omnichannel fulfillment methods such as buy online, pick up in-store (BOPIS), ship from store and curbside pickup increased an average of 97% at the beginning of the pandemic with grocers seeing a rise of up to 109%. The findings, conducted by VDC Research, also revealed that the demand for omnichannel services has stayed consistent (55%) or even increased (46%) since early pandemic levels, highlighting the importance for retailers to invest in long-term order fulfilment strategies.
The increase in demand for such services also led to an increase in online basket sizes with 44% of retailers seeing a rise between 16-30% and 11% stating they were over 51% up on pre-pandemic levels. With consumers no longer making a distinction between e-commerce and brick-and-mortar shopping, delivering a seamless end-to-end omnichannel experience is more critical than ever. This is placing enormous pressure on physical retail stores to build effective fulfillment strategies while ensuring store associates are equipped to be empowered and connected with customers.
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The new frontier of retail
To adapt to a changing retail store environment, smartphones with employee applications provide a flexible device for a multitude of tasks – from customer engagement to operations. In fact, nearly half (48%) of retailers who equip their store associates with smartphones rated themselves as ‘highly agile’ in response to the pandemic compared to 37% of dedicated device users. The use of smartphones in retail, especially to cater for new in-store order fulfillment methods, reflects a growing trend to utilise the smartphone’s camera to scan barcodes, text and customer identification to streamline store operations and processes. As a result, store associates can efficiently perform critical omnichannel tasks like order fulfilment, inventory control and clienteling from one device.
Adapting to the changes
The COVID-19 pandemic and increase in demand meant changes for store associates which has led to many being forced to transition or adapt to new roles. Adapting and training store associates has been crucial to keeping stores open and operations running smoothly. As such, retailers have adopted new initiatives in order to overcome resistance, keep staff motivated and equipped to deal with additional duties like inventory management and BOPIS. In fact, most retail executives said their organization had carried out specific initiatives to bring store associates on board. These have included additional training (74%) and communication of the overall strategic impact (62%).
Other initiatives included performance-based incentives (30%), and customization of the store technology (30%). 12% of retailers adopted a corporate-owned, personally enabled (COPE) strategy and incentivized their staff with smartphones which could also be used personally, and moves away from the traditional shared device model.
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What’s next for in-store order fulfillment?
Despite the heavy logistical pressure caused by the pandemic and increases in demand, the majority (70%) of retailers were positive about their organization’s response. Most retailers were able to manage fulfilment internally or by combining it with outsourcing. Overall, only 5% of respondents relied solely on outsourcing. This figure differs depending on the sector, however, with grocery retailers placing greater reliance on third-party fulfilment services with 20% saying they outsource some, or all, order fulfilment services.
While outsourcing brings clear benefits to manage demand, especially in peak periods, it does come with some challenges. For example, 62% of retailers said it can lessen the store’s connection with the customer with 46% further highlighting that it can impact profit margins. This ultimately demonstrates why it’s essential to continue to invest and improve in-house strategies that are already in existence.
Samuel Mueller, CEO at Scandit said: “The pandemic has accelerated a shift that was already in progress. People have always wanted different ways to shop and technology was always going to be the driver to make that possible. This is why the trends we’ve seen have not just stuck but grown in some cases as consumers have become accustomed to increased choice. The key to a successful long-term omnichannel strategy is integrating e-commerce and store systems so it is no surprise to see that this is the top investment priority for retailers (35%). This is closely followed by improving in-store inventory visibility (27%), both of which are critical to ensure online sales are fulfilled accurately to deliver customer satisfaction.”
