Contactless Commerce Is Suddenly Mission-Critical in Every Retail Category
Remember those long bygone days, when buy-online-pick-up-in-store orders accounted for maybe 3% of your business? For a select few, maybe it was 5%. And do you also remember those days, long ago, when everybody thought that curbside pickup options would forever be limited to grocery and big-box retail?
A lot really has changed since those days gone by. You know, those days waaaay back in … March. In less than 60 days – not 60 weeks, much less 60 months – everything we thought we knew about store retailing has changed, and in many ways, changed forever.
Never in our lifetimes have we seen such seismic change happen so quickly. Not at the dawn of the internet, not at Y2K, not during (or immediately after) the Great Recession. Never. Massive and unprecedented changes have been thrust upon us, and our organizational ability to react has become, quite literally, existential.
Which is why I am no longer shocked to hear retailers tell me stories of standing up complex new processes in a matter of days … and then rolling out those flawed, not-yet-fine-tuned processes to hundreds or even thousands of stores in just a few more days. Hence, I am no longer surprised when I hear clients tell me that they can live with mistakes – even pretty big mistakes – as long as they keep adapting and moving forward.
The phrase “by any means necessary” is fast becoming retail’s new mantra. The same industry that is typically viewed as cautious and conservative is moving really quickly. More quickly than I have seen in my 35 years in the industry. And where is the industry moving most quickly? Toward something we now call “contactless commerce.” Shoppers around the world are afraid. They’re guarded, and they are wary of any contact with any strangers. They don’t want you to come near them. In response, retailers in every category are absolutely scrambling to remove human contact from the shopping journey.
From payments to pickup, processes have been scrutinized to eliminate the need for any touching of people, products, or pin pads. And at the rate we have been forced to change, many of these process changes have indeed been flawed. In some cases, they have been highly flawed. Which is OK — today. We have to adapt and accommodate by any means necessary.
But a couple of months from now, these flaws will in and of themselves become existential because the demand for contactless commerce is not going away anytime soon. Recent results from China indicate that as many as 50% of all sales remain contactless, even several weeks after retail has reopened. Many retailers are considering reopening some of their stores only as fulfillment centers, with shipping and pickup orders being the sole purpose of these stores (one report showed that as many as 47% of retailers are considering this option). We simply have to get these processes right. Margins will be far too tight, and customer tolerance for mistakes will quickly wane.
So what does “getting it right” look like? That will vary by location, brand, and store format, of course. But there are two core principles that must be mastered no matter what your store looks like, no matter its zip code:
- Store inventory must be accurate and available. For years, technology types like me have been urging retailers to get their inventory house in order. And for the most part, retailers have gotten it right. But most of the time is no longer good enough. Every single sale is suddenly absolutely critical, and we can’t afford to miss any opportunity because our safety stock levels have to be set high enough to overcome faulty inventory tallies. We now need uber-reliable inventory availability from every corner of the enterprise and every corner of the store.
- Customer communication must be flawless. At every step of the shopping journey, we must inform customers of the status of their order and the time and place they are expected for pickup. Those communications must include explicit instructions for a safe and socially distant experience.
There are, obviously, many details that have to be sorted out between inventory availability and customer pickup instructions. But those other processes have higher margins for error and higher degrees of variability between brands and locations. You can afford more time for trial and error and process evolution on the fly. But if you make promises you can’t keep because your inventory is wrong, or you fail to communicate to your customer clearly, effectively and accurately, nothing else will matter. You will lose that customer, most likely forever.
So, before it’s too late, take the time to carefully scrutinize your store fulfillment and pickup processes. Evaluate your inventory and cycle counting processes. Understand and test (and test, and test again) how to best communicate to your customers. And get these processes right, reliable, and repeatable.
By any means necessary.
Dave Bruno is Director of Retail Market Insights at Aptos.