Stores as markets in the world of Unified Commerce

Retailers need to use technology to align systems, people and processes to deliver the best brand experience, writes Chris Noble, director of StoreForce.

Much has been reported around the decline of bricks and mortar, the death of the high street and the rise and rise of ecommerce – however, recent months have seen even the biggest online giants, such as Amazon, along with other pureplays like furniture etailer Made.com, dip their toes into physical store formats.

Unified Commerce, like all disruptive ideas, has changed the definition of the word 'store'. Consumers no longer see the bricks and mortar and online elements of a business as separate entities. Customers see a single brand – one that should be consistent both in-store and online – and expect their omnichannel retail encounters to be seamless across whichever channel they choose to shop in.

When e-commerce accounted for as little as just one to five per cent of sales, there was little impact – or concern - at store level. However, the significant increase of online purchasing has resulted in a substantial increase in the quantity of products returned to store. In 2016, research by Clear Returns found that returns cost UK retailers £60bn a year, £20bn of which were generated by items bought over the internet. Such is the problem that store managers are reporting they are concerned their bonuses will be slashed because of the negative impact of online returns processed through the instore Point of Sale (POS) on their sales figures.

The problem is that legacy POS systems are unable to separate returns generated by the store versus those generated by online purchases.

In Unified Commerce, there are generally two avenues to demand generation, store and online; similarly two routes to order fulfilment, instant by purchasing in the shop or delayed via shipment from distribution centre (DC) or another store; and therefore, two for returns, back to the shop – regardless of where the product was purchased – and via shipment to DC.

To address the various combinations of demand generation, fulfilment, and return options, retailers must look at the store not simply as a physical purchasing space but as a market.

In order to view stores as markets, retailers need a true picture of their sales and returns, and the time and costs associated with them, so they can understand the impact – and relevance – of stores in a Unified Commerce world.

To achieve this, retailers need to marry online sales with markets (stores) based on the geolocation of each customer. Once online sales are assigned a market, the retailer can either view sales and returns individually via channel, or they can combine bricks and mortar with online to give the total market sales. This in turn will allow retailers to track the sales and return metrics for each view and understand exactly how online returns are impacting a store's performance.

With many brands unable to compete with online offerings on price or product, customer experience has become the key brand differentiator. However, as retailers continue to add more selling channels, customer experience becomes more difficult to manage, particularly when trying to deliver the same levels of service through each individual customer touchpoint.

The bricks and mortar store remains – and will continue to be - the Retailer's most important brand touchpoint, because the in-store experience is both personal and physical. Customers make a greater time investment when purchasing in-store purchase as opposed to online – and 90 per cent of sales, even if a consumer has researched online before, still occur in a physical store.

This cross channel shopping behaviour relies on a frictionless retail experience whatever a customer's touchpoint. To achieve this it is important to align systems, people and processes so that a single view of stock and a 360 degree view of the customer can be achieved, to drive performance across all sale channels.

The ability to align goals relies on how well a Retailer will use technology to measure and reward performance within each of the channels. With consumers making no distinction between different channels, retailers need to accurately track and reward demand generation, regardless of the method of fulfilment. Stores also need to embrace a wider role in the market and deal with external fulfilment through both click & collect and shipping from store without an increase in labour budgets.

And that's where sales performance and coaching reporting technology comes in. By overlapping data about where sales and returns are made during what period, retailers can become smarter, for example, ensuring that customers are given collection and returns information based on both capacity and convenience.

By using this information, retailers can match staff rostering to an optimum ratio depending on staff skills and ensure they have their top performers scheduled at peak times, and non-sales tasks are appropriately allocated during quiet periods. It also means they can put the right training and mentoring in place to enhance employees' careers.

A Store that excels at being a brand ambassador will see a rise in their accumulated Market sales, even if their brick and mortar sales are declining. By measuring how this shift is occurring in each Market, regional managers are better able to make informed decisions based on performance opportunities.

By investing in technology retailers can truly embrace Unified Commerce, by making effective decisions that drive staff performance and deliver the customer experience needed to allow them to continue to compete and thrive.

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