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Smarter ways to shop and sell

Busy consumers are demanding increased convenience from retailers, forcing them to rethink their supply chains and logistical operations in order to deliver.

Today’s consumers are becoming increasingly time-poor, so being able to shop with ease and via as many channels as possible –online, with their smartphones, click-and-collect, in store but then delivered to their homes by using tablet and iPad devices – is key. Retailers are rushing to meet this demand, but the serene, swan-like appearance presented to consumers conceals a flurry of activity beneath the surface, as they attempt to adjust their logistical operations and supply chains.

Research by professional services firm PricewaterhouseCoopers found that being able to shop when they want is now consumers’ main reason for shopping online, rather than simply finding the best price, and while the bricks-and mortar store remains the preferred channel for fashion, 22% of surveyed respondents said they wanted store-to-home delivery.

Retail systems provider BT Expedite’s director of supply chain Robin Coles says this shift is forcing retailers to reconsider their proposition: “The internet has moved the choice and the power into consumers’ hands. The retailer has had to respond by making their stock more readily available, because if they don’t the consumer will shop elsewhere.”

High street retailers have responded to this demand by offering new sales channels and flexible delivery options. Aurora Fashions, which owns the Coast, Warehouse and Oasis fascias, and sister company Karen Millen, offers click-and-collect, same-day, 90-minute, next-day and nominated-hour deliveries. It also introduced mobile iPad-enabled point-of-sale systems into eight stores in London and Oxford in September. The iPads, which have been supplied by BT Expedite, allow customers to have their picture taken in outfits, see the full collection, and source out-of-stock products via the website or another branch for store collection or delivery to their homes.

“It brings the brand to life and shows information that wasn’t necessarily there before. Some stores have used it to record their important customers’ details. That personalises the service and really takes that brand experience to the next level,” says Steve Price, joint managing director of Karen Millen.

One step ahead

Premium retailer Reiss has also been looking at new ways to engage customers and improve stock visibility. It has introduced two touchscreens and two iPads into its Westfield Stratford store, which allow customers to shop the full range from the online store for either same-day or next-day collection in store or for home delivery. The retailer will also introduce a click-and-collect service nationwide before the end of this month.

Reiss ecommerce director Dan Lumb says: “It’s about offering choice. You’re driving people back in store plus you’re engaging them to buy something else. So it might be a tie to go with the suit they just bought, or shoes to go with a dress.”

Womenswear chain East has rolled out iPads across its 100 stores and, following a six-store trial, will now be accepting sales through this channel, too. The company’s head of IT, Angus Stewart, says the iPads, which sit on a wireless network provided by telecoms company Vodat International, haven’t impacted the company’s supply chain or logistics operations and have actually saved it time and money. “We’ve consolidated around iPads a lot of functionality that was paper-based and it’s absolutely improved efficiency,” he says.

iPads have been an important addition for store staff, who have been put on the back foot by shoppers who have researched products on their computers at home or in store on their phones. “We were almost seeing the consumer as more empowered than the store teams. To bridge that gap we needed to mobilise our teams and give them mobile tools to provide them with that information,” says Ishan Patel, group strategic development director at Aurora Fashions.

The benefits of selling through multiple channels are clear but retailers also need to consider the infrastructure that will support the front-end offer behind the scenes; if their IT systems are able to support these new channels and cope with increased demand; and if their supply chain and logistical operation can deliver goods.

“This new consumer-facing technology is, in a sense, exposing the dirty linen. It suddenly becomes very clear if your stock isn’t right, if your fulfilment systems aren’t exactly what they need to be. You’re exposing those weaknesses to the consumer,” says Sam Jackson, chief technology officer at Prologic, which provides retail systems to retailers including East.

Sean Fahey, IT and project director at logistics firm Clipper, agrees that retailers need to consider the implications to their supply chain before they engage in online and multichannel.

“It’s no good going live if you find two months later that your ordering process can’t cope. You have to plan on the basis that you will be a success and [make sure] your systems are scalable and able to cope with the increased demand.”

Patel says that fulfilling these demands, in particular faster deliveries, means retailers may need to rethink how their supply chain is going to work. “Just thinking about delivery options, same day, next day, nominated day, all have different processes required. So the flexibility of that supply chain, not only from a systems process perspective, requires quite a lot of thinking.”

The industry’s move towards later deliveries has also forced logistics providers to reconsider how they manage their own operations. “It is intrinsically more expensive [for retailers]. We are seeing a big increase in our customers pushing the cut-off time for a next-day service later and later. Whereas 4pm used to be the norm, that’s now moved into early evening and some are even getting as late as 11pm,” says Roger Burns, development director at logistics firm DHL Supply Chain’s fashion division.

Flexibility is key

As a result, DHL Supply Chain has introduced flexible working and changed shift patterns, instead of taking on extra staff, in a bid to offset the cost of later deliveries.

Darren Spurling, managing director of footwear label Terry de Havilland, a customer of DHL Supply Chain, says the cost of later deliveries is a necessary evil: “In today’s market you have to stand out, and if the norm is next day then you have to compete on that level. It’s an inherent cost that we have to deal with.”

Reiss offers free delivery on orders over £150 and Lumb says it is important not to keep passing further costs on to the consumer. “It’s about the customer experience. I would rather absorb that cost to encourage the customer to purchase again. And I think that’s what people expect,” he says.

Aurora Fashions is looking to roll out its 90-minute delivery option nationwide in the first half of next year, but Patel says fulfilling this from a central distribution centre would be difficult, and that the answer may be to use local distribution centres or to deliver from nearby stores. “If you’re looking to meet customer demand you have to rethink how you traditionally set up your infrastructure and that does require flexibility in your systems,” he says.

The benefit of adding these services to your offer and the consumer advocacy that will result is hard to monetise, adds Patel. “If someone’s had a fantastic experience with you, then they will most likely talk to their friends, possibly on Facebook and Twitter, and the power of that versus any marketing dollar you can throw at it is huge.”

Readers' comments (1)

  • James hits the nail on the head. With increased and varying consumer demand, comes a requirement for multi-channel retailers to unite their “front-end” experience, with the “back-end” supply network. In a recent survey of 500 UK retailers by Freshminds for DHL Supply Chain, it was found that while retailers focus on improving front-end services like website redesigns, it is often at the expense of back-end processes such as fulfilment, inventory and delivery.

    Multi-channel shoppers spend almost twice as much as their single-channel counterparts, and so maintaining satisfaction is paramount.

    Real-time data capture and analysis is just one way in which multi-channel retailers can measure precisely how quickly stock needs to be replaced, and align warehouse inventory with the most profitable traffic to site.

    For more information on how mixing traditional retail channels with new technology can pose challenges for retailers, follow this link: http://bit.ly/p1f0we

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