With Covid-19 changing the face of the high street forever, what can retailers do to ensure that the store remains at the heart of their operations?
Over the past year, the impact of Covid-19 and the series of lockdowns it precipitated have been impossible to ignore. People and businesses alike have been impacted by the complete change in day-to-day life. The lack of in-person buying has particularly affected the retail space, with more than 17,500 chain store outlets disappearing from high streets in 2020 and the likes of the Arcadia Group going into administration.
As we’ve witnessed the decrease of in-store purchasing, we’ve also seen online retail sales soar by 36 per cent over the past 12 months – the highest increase in 13 years. This has generated a lot of pressure on the supply chain, with offline orders being increasingly redirected to retailers’ e-commerce propositions.
With these shifts happening, how will the high street and its stores be affected? Most importantly, how can retailers leverage their store networks into a powerful tool that will not only save the British high street, but simultaneously offer powerful logistical innovation to capture higher market shares?
Rethinking the role of the high street: turning stores into micro-fulfilment centres
The stores of the future have a dual role. They will act as experiential spaces for customers to discover brands, their new products and initiate the act of purchase. However, they will also serve as a key link in the supply chain to provide innovative delivery options for customers.
The physical experience will remain paramount as outlined above – giving customers the opportunity to discover and interact with brands and grow customer loyalty. Moreover, these locations still serve as important central touchpoints to ignite the all-important customer journey, with omnichannel approaches at the forefront of retailers’ strategies.
Furthermore, the physical store presence acts as an enabler for the digital part of the business, with stores turning into hyper-localised micro-fulfilment centres. By pushing more orders through e-commerce platforms, retailers can then use their stores to distribute products in a faster and more convenient manner, while creating more sustainable delivery options for customers. As Accenture’s latest study on last mile has shown, the implementation of micro-fulfilment centres in London could decrease traffic volume – and by consequence emissions – by 13 and 17 per cent respectively.
With current developments, there is a need to build synergy between the physical store and digital experience in order to provide a successful and seamless customer journey. Shipping directly from brick-and-mortar locations to end-customers can help the high street evolve and allow retailers to join the speed and convenience of delivery pioneered by giants such as Amazon.
Shipping from store: The key logistical benefits
Shipping from store has a lot of advantages for all actors in the e-commerce relationship, from the retailer to the end-customer. By relieving the pressure on traditional distribution centres, and leveraging stores as micro-fulfilment centres, the retailer can implement faster and more convenient delivery times for the end-customer. The geographical proximity – an incredible advantage that stores create – allows for quicker deliveries, but also for more sustainable transport types to be deployed, such as bikes.
By acting as an urban warehouse, line haul becomes more efficient and distribution more effective, allowing for the new hybrid store to transform itself into a central component of both physical and digital distribution.
Naturally, there are some elements that retailers have to consider – live stock visibility or package labelling for example – but these are all elements that can be seamlessly integrated. Ensuring that these elements, as well as a reliable last-mile provider such as Stuart, are all accounted for, will enable the retail industry to evolve and provide the fast, convenient and sustainable options customers are expecting.
With US players such as Nordstrom seeing a 39 per cent increase in sales following the integration of its online and in-store inventories, and Metapack reporting that other retailers have seen their online sales increase up to 30 per cent since they started using their stores as fulfilment centers, we can see that the process of converting stores to this new hybrid model is very much underway.
The future of retail lies at the crossroads of the physical and digital experience, with the former enabling the latter to create a faster, more sustainable and more convenient customer proposition to help retailers stand out from the crowd and thrive in a post-pandemic world.
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by Nicole Mazza, Commercial Director & Retail Expert, Stuart