All the evidence points to the acceleration of the consumer culture evolution. Due to stay-at-home orders and business shutdowns, shoppers who had always driven to physical stores to choose their merchandise, take it to a cashier or sales associate, and carry their purchases home learned just how easy it is to have someone else do it. The U.S. Census Bureau reports that e-commerce sales rose 14.8 percent in Q1 2020 from Q1 2019.
Retailers were anxious to shift to e-commerce operations and provide in-demand services to keep revenue coming in through digital channels. Many brick-and-mortar retailers who had delayed their e-commerce initiatives were forced to quickly deploy stop-gap solutions to have an online option for their customers. The rush to deploy and adapt to the new normal resulted in processes that were not efficient and significantly eroded their margins. Now, they are taking a deep breath and looking for help from technology companies to improve efficiency, customer satisfaction and profitability.
Challenges with Retail E-Commerce
Bob Woodward, Director Global Partnerships – Software at Zebra Technologies, points out that, to operate efficiently and profitably, retailers need more than an e-commerce application. They need technology that supports their entire e-commerce operation.
“If you break it down, there are so many different workflows that go into the process of getting the order ready and getting it to the customer in a reasonable amount of time,” he says.
For example, one crucial element to selling online is an accurate inventory count. Consider a customer who wants to buy online and pick up in the store, a popular option during social distancing. Problems occur when the retailer’s website says the item is available, but before the shopper arrives, a different customer purchases the item. If the retailer doesn’t have a way to communicate with online shoppers, they’ll be faced with a dissatisfied customer and losses from a make-good offer of shipping from another store, shipping from the warehouse, or substituting an item that might be more expensive. That online sale could actually end up costing the retailer money.
E-commerce also requires establishing an efficient picking process. Retailers new to e-commerce may have staff pick from the aisles, which may have worked when physical locations were shut down. This strategy breaks down when customers return to stores and are trying to do their own shopping and have to contend with “personal shoppers” crowding the aisles and grabbing the last item on the shelf that you made a special trip to pick-up.
Woodward explains that some grocers have addressed this issue by establishing micro-fulfillment centers or dark stores. These locations may be a former store location or a part of a facility that enables them to set up racking and conveyors and optimize items for picking, rather than shopping. They enable staff dedicated to e-commerce operations to fill online orders more quickly and efficiently. These operations are located in the same geographic area as the store’s customers, which helps to curb the costs of last-mile delivery, which can negatively impact the profit margin from e-commerce sales.
Just the Beginning
Although some retailers were well-positioned for the online shopping demand that 2020 would bring, technology is still advancing in this space, and retailers are still refining their e-commerce operations. Some businesses are evolving from offering in-store pickup to delivering orders curbside. Others are opting to have customers pick up orders in secure lockers. And many of them are looking for better applications to help them manage those processes.
“We’re just starting up the front side of the bell curve of e-commerce,” Woodward points out. “Innovation and deployment will continue for another three to five years before the market for these solutions begins to tail off.
ISV can also help retailers create experiences their customers want beyond the e-commerce “frictionless shopping” ideal. Some retailers, especially smaller, neighborhood stores, are looking for ways to maintain relationships with their customers who are now primarily shopping online. And all retailers want to provide shopping experiences that help them remain competitive.
Turning creative ideas into manageable processes, however, requires the right software. Some retailers are attempting to write their own applications. Others, without that capability, would welcome an affordable Software as a Service option or an app that they could deploy easily and leverage to bring some efficiency to the processes that they were forced to quickly implement in 2020.
Does Your Software Development Company Have an E-Commerce Play?
Software developers specializing in geolocation, warehouse management, or field mobility may not have considered the value they can provide to e-commerce retailers, but the opportunity is ample and growing.
Retailers need an e-commerce application to seamlessly sell online, fulfill orders, and deliver them to customers in an efficient, profitable, and customer-pleasing way. Their next investment may not be a customer-facing solution, but rather an inventory management, data collection, delivery management, or labeling solution.
In 2020, retailers under pressure accelerated their technology roadmaps — in some cases by years — to keep their businesses open. Now that they’ve made investments in their e-commerce operations, they want to drive value from them. Does your business hold the key?
To learn more about integrating your software applications with total solutions designed to optimize e-commerce operations, contact the Zebra Technologies team at BlueStar. http://www.bluestarinc.com/us-en/zebra.html