Retail Futureproofing: Meeting the Needs of the I-Want-it-Now Generation

5/12/2015
From the arrival of the GILT Groupe platform offering flash sales of luxury brands to the boom and ease of mobile shopping, it is clear that the elevated expectations and measurable shifts in customer behavior have forever changed how retailers must manage order fulfillment to deliver their product. However, the next five years are poised for still more disruptive change. Noting how imperative it is that apparel retailers take heed, the recent Forrester TechRadar: Logistic Applications report clearly dictates the importance in assessing and deploying future technologies. 

The dynamic world of omnichannel retailing breaks down traditional supply chain models, such that apparel retailers can no longer rely on pushing bulk merchandise to distribution centers only to then pull it from pallet to store. Shorter product lifecycles, product range extensions, changes in shopping habits and the growth of parcel tracking are just some of the challenges on the horizon for retail technology today and the future.

Online retailing has driven a significant increase in returns, with consumers ordering multiple dress sizes to try on in the comfort of their homes, safe in the knowledge that they can return the ones that don't fit. Retailers therefore need to ensure they have the ability to authorize and manage returns, as well as the management of returned merchandise that might need to be prepared for resale.

As traditional retailers extend product ranges to compete with online players and fluctuating consumer spending behaviors, the retail technology solutions of 2020 must become more nimble to cope with shorter product lifecycles. With the advent of the likes of Stich Fix and Net-a-Porter, the next generation of consumers can be easily defined as the "I want it now" generation. Consumers are becoming conditioned to expect certain services and considerations by the retailers that are leading the pack. Whether they realize it or not, retailers are competing with the likes of Amazon, and as customers understand the possibilities, they will want the same access, speed and tailored experience from all of the retailers they choose to frequent. Further, they will have income to spend, but little time to spend it, and will demand shorter delivery times than any previous generation.

Because of this, an integrated link between a retailer's online and offline operations has never been more crucial. A 2014 Accenture and Forrester report states that 50 percent of all consumers consider store pickup options important when shopping online, and 41 percent would like alternative delivery options available upon request. It would be foolish for retailers to ignore such compelling statistics, however only one-third of retailers support those programs. Forrester's "The Retail Order Management Imperative" report, commissioned by OrderDynamics, showed that only 23 percent of retailers have a buy online, pickup in-store program in place and just 20 percent have implemented a reserve online, pickup in-store program.

A key takeaway from George Lawrie, vice president and principal analyst at Forrester Research, is to build your cloud-based operational readiness. Every order has the potential to involve various suppliers and various carriers, so retailers should be moving into cloud-based systems with a model that focuses on orchestration rather than the application ownership model.

It is becoming ever more apparent that retailers need to focus on new and existing technologies that provide unprecedented availability and lead-time transparency for channel delivery, local availability and service levels to be maintained while supporting brand promises. Retailers need the innovative tools of the future now in order to analyze data in near real-time and pair it with recommendations specific to the opportunities. Choosing to use the tools of the past that fostered managing by exception, by zone or cluster will lead to certain disaster. Leading retailers now understand that it is increasingly crucial to comply with the needs of the even more demanding "I want it now" consumer. Active adjustments to this new reality will better position retailers to discover disconnects faster, sell more, waste less marketing spend, reduce returns, improve customer loyalty and grow profitability.


Kevin Sterneckert is CMO of OrderDynamics.
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