Growing consumer demand for 'flexible fulfilment' will require stores to rethink how they operate, according to Craig Summers, the UK managing director of Manhattan Associates, a leading supply chain consultancy.
By 2023, the UK click-and-collect market is predicted to grow to £9.8 billion (€11.6 billion), a rise of 45.8%.
As customer demand for flexibility and convenience increases, retailers will need to look for new ways to optimise their existing assets to satisfy rising consumer expectations.
As Summers explains, turning retail stores into fulfilment centres to provide 'ship from store' and 'click-and-collect' options is one of the strategic manoeuvres retailers are making to meet this demand.
Protecting Profit Margins
Retail stores, including store associates, were not originally intended to operate as fulfilment centres, Summers explains. Simply put, store layouts and inventory were not designed to be optimised for fulfilment like warehouses.
What’s more, store associates are not trained to be order-pickers like warehouse staff.
The risk for retailers is that the store cannot keep up with fulfilment demands of digital commerce while simultaneously supporting walk-in shoppers, potentially risking poor customer service and damaging customer satisfaction, says Summers.
Furthermore, retailers run the risk of diluting margins if store fulfilment operations become increasingly costly.
As growth in flexible order fulfilment options like ship from store continues, retailers should aim to build upon the strength of their current store operations to ensure they can profitably deliver customer fulfilment promises.
Improving store inventory and fulfilment capabilities to enable the store to more accurately and efficiently fulfil online orders is crucial to satisfying customers and protecting margins.
The RFID Opportunity
Near real-time visibility into the availability and precise location of store inventory, through the use of Radio Frequency Identification (RFID) technology, can be a key tool in a retailer's arsenal.
By utilising inventory in stores, not just in distribution centres, for the fulfilment of online orders, retailers will be prepared to meet expectations for convenience and immediacy, while reducing disappointment and lost sales created by out-of-stock situations.
With that information in hand, retailers will be empowered to confidently promise customers fulfilment options including specific in-store order pick-up times or same-day delivery.
Further, timely and accurate inventory information can be used to optimise in-store order picking processes, enabling store associates to find, pick, and prepare orders with the accuracy and efficiency that reduces operational costs while ensuring service level commitments.
By having in-store stock data clearly visible in a system that is capable of providing a single view of all stock across the retailer’s network (irrespective of location), smart fulfilment decisions can be made.
For example, a retailer can then decide if, with the data in mind, it makes more sense to ship from a store, a DC or a DSV to ensure the customer’s expectations are met.
A New Retail Reality
Using RFID in-store equips store associates with everything they need to provide a seamless, modern customer experience, according to Summers. In fact, RFID in stores is proven to significantly improve stock accuracy and consumer trust around having the right products available to fulfil demand.
With the help of innovative RFID technology, retailers are turning their stores into fulfilment centres to strategically meet customer demand for convenience and immediacy.
Meeting this demand is not easy, but when store inventory and fulfilment is done right, the complexity subsides, providing retailers with the opportunity to deliver on their anytime, anywhere omnichannel promise.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine
