While modernizing the in-store experience is important, supply-chain innovations are crucial for growth.
The retail industry has never seemed bigger or broader, with hundreds of companies pushing retail forward in a climate that has many traditional industry giants unsettled and concerned about the future.
“Maintaining customers’ attention in this increasingly noisy retail landscape is key to survival.”
Many retailers have taken that advice to mean that they need new, innovative in-store technology and devices to keep customers entertained and physically in stores longer.
Fashion brands Ralph Lauren and Rebecca Minkoff are investing in connected stores with digital fitting room mirrors. Lowe’s is piloting 3D printing technology that prints personalized products for customers in-store.
Every day there is a new flashy technology meant to impress customers, and each day more money is spent on finding the next big thing.
This pressure to enhance the store environment is diverting focus away from technology that’s crucial to helping retailers keep pace with e-commerce leaders.
Retailers should take a cue from fast-growing companies and focus on improving the customer experience with investments in supply chain and logistics, which is crucial in today’s on-demand economy, instead of only in-store innovations.
Watch how smart-mirror technology is changing the in-store retail experience.
Beefing up supply chains
Some top retailers are already championing this advice and foregoing in-store flash for beefed up supply chains.
Home Depot, for example, is investing in their logistics capabilities, with a robust ship-from-store program. By using their retail stores as showrooms and warehouses, Home Depot can increase delivery speeds and provide even more product diversity for its customers.
Home Depot physical stores handle more than 40 percent of online orders and almost 90 percent of online returns, which in turn drive greater store traffic and repeat sales. Last quarter, the retailer announced a 5.8 percent increase in sales.
One of the most successful fast fashion brands, Zara, has also invested in making its supply chain agile and efficient so it can keep up with consumer demand.
Leveraging sophisticated trend forecasting and partnerships with local manufactures, Zara has achieved “just-in-time manufacturing” and is not limited by the typical fashion manufacturing cycle.
This agile supply chain allows Zara to ensure in-demand inventory is always available, and disliked products are quickly discontinued.
Meanwhile, other brands remain hamstrung by long production times and predetermined inventory orders. Zara’s parent company Inditex is now the highest performing fast fashion stock.
“One thing we do know for sure? Consumers care about convenience and product availability.”
This massive, efficient network allows TJX to quickly meet consumer demand and respond to changes. TJX’s investment in supply chain has paid off — it’s one of the few retailers planning to open stores while others are shuttering — as it just launched a new store brand under its powerhouse umbrella.
Retailers are enamored with flashy in-store technology, but industry analysts are still skeptical about their efficacy.
One thing we do know for sure? Consumers care about convenience and product availability. Retailers and brands should respond to the temperature of the market and invest in the logistics and supply chain technology that delivers on these two priorities.
This article first appeared on Optoro and was republished with permission.
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