The last year and a half have brought significant change to our lives and to business. It seems like every day there are new developments forcing us to re-think our view of retail. The shift from brick-and-mortar store sales to multi-channel and eCommerce sales has changed dramatically from where it was just a few years ago. Almost daily there are articles about supply chain issues, how they are impacting the current holiday season and how long they may impact us as consumers. Product shortages are increasingly commonplace in stores and online. Retailers are being forced to innovate on bringing product to market in ways we assumed unimaginable just two years ago.
Retailers should consider how to adapt their business in 2022 and beyond. Consumers are changing their behaviors – is your business in a position to change with them? What actions are you taking to move forward in a post-COVID era?
Below are three areas to consider:
- Continued evolution of omni-channel selling
- Supply chain risk and visibility
- Sophisticated allocation capabilities
Retail in 2022: Continued Evolution of Omnichannel Selling
eCommerce sales have gradually been eating into traditional brick and mortar sales for some time now. The impact of COVID and resulting changes in shopping behaviors has increased that shift substantially. Omni channel sales and shared inventory management should now be the norm. Today’s customers are looking to combine the convenience of shopping online with the ability of taking delivery of goods as soon as possible whether via pickup or delivery. Buy online pick up in store (BOPIS) and ship from store (SFS) options are no longer a consideration but a necessity. Additionally, more retailers are using home shopping and delivery solutions such as Shipt to accommodate those increases in shop at home behaviors. Retailers not currently taking advantage of these solutions should consider exploring them as we move into 2022.
Retail in 2022: Supply Chain Risk and Visibility
Supply chain is another area where forward-thinking retailers are exploring new solutions. According to an article in the Wall Street Journal, the 25 largest US retailers have acquired 38 million rentable square feet of new space in the last year. Additionally, vendors such as Costco and Wal Mart have recently taken actions to insulate their own supply chains. For example, some have chartered their own shipping vessels to ensure availability and are rerouting shipments to avoid congested ports or train delays. Retailers should examine their own end-to-end supply chains as they look to weather the short- and long-term impacts of the current environment. Whether a complete overhaul to address supply chain risk, or simply improved reporting for increased visibility to inventory movements and locations, adapting the supply chain will be vital to every retailer.
Retail in 2022: Sophisticated Allocation Capabilities
Finally, allocation strategy and the correct processes and systems to support said strategy will be critical for success. As discussed, shopping behaviors are changing and allocation strategies need to adjust accordingly. Having inventory in the correct location to support BOPIS, SFS or home delivery options as well as supporting traditional DC to store or DC to consumer become more important than ever. For retailers without a formal allocation system, perhaps it’s time to explore. For those with formal systems perhaps time to explore additional features or revisit processes and algorithms to better address today’s challenges. Or maybe it’s time to take the next step by incorporating advanced analytics into current allocations
Charles Darwin said “It is not the strongest or the most intelligent who will survive but those who can best manage change.” In this time of unprecedented change the retailers who best manage and adjust to changes today will be best setup for success tomorrow. To discuss how you can best adjust to the ever-changing world of retail, contact one of our retail experts today.
Contributions from Dave Foos and Brandon Regnerus