It’s no secret that retail has changed. eCommerce and most notably, Amazon, have changed how we think about shopping and what we've come to expect when making a purchase—both in store and online. And, those expectations keep evolving. Amazon's move to even faster, one-day delivery proves it.
Retail will continue to change. In 5-10 years it will look a lot different than it does now. But, there are some key things that we know will play a role in future retail success: Emphasizing the customer experience, being agile enough to adapt to changes, and standing out from the competition are just a few.
Five industry experts from Johnson & Johnson, Nordstrom, QVC, and more share their thoughts on what it will take to survive, and thrive, in the coming years, including:
- Customer-obsession and personalization
- Flexible logistics networks
- Future-proofing your supply chain
- The power of your logistics professionals
- The “wow” factor across platforms
1. Be obsessed with your customer
We’ve gone beyond the customer is always right. Now, we have to actually “be obsessed” with them—know who they are and cater to their specific needs, not just the general market’s. As Chief Operations Officer of QVC Group, Bob Speith, put it, “eCommerce success will be a direct result of how businesses support customer experience and meet demands.”
The internet has done a lot for retail. Customers now have access to the world’s inventory from the palm of their hands, and retailers have massive amounts of data about their customers. That data can be your differentiator; it’s been Amazon’s.
Amazon, has been a pioneer in customer experience, aiming to be “Earth’s most customer-centric company.” Amazon’s inventory is vast, but it has used customer profiles, search and buying history, and recommendations to serve up relevant content to its shoppers. As a result, we now expect to get what we want, and what we didn’t even know we wanted.
That’s a high bar. “To meet these challenges requires investments in a few key areas—technology, leadership talent, and analytics and information capabilities. Skimping on any of these will reduce a retailer’s competitiveness,” says Spieth.
For everyone else trying to keep up, sustained success hinges on technology and information to continuously improve and reduce friction. Visibility into the customer journey helps businesses make everything from product discovery to delivery as seamless and personalized as possible. Going this extra mile is no longer a plus for retailers and brands, it’s mandatory.
“eCommerce success will be a direct result of how businesses support customer experience and meet demands.”Bob Spieth COO, QVC Group
2. Create flexibility in your logistics network
eCommerce, omnichannel, buy-online-pickup-in-store (BOPIS), same-day delivery—there are more ways to shop than ever before. While great for consumers, it creates some tough logistical challenges. As Joseph Bobko, Vice President of Transportation at Boxed, put it, the old method of “operating one or two massive warehouses won’t work for how dynamic business is today.”
Supporting these new channels in a fast, affordable way requires the ability to adapt your logistics network and ”disperse inventory into a constellation of smaller, more agile distribution centers.”
“Retailers must find ways to bring their goods closer to where their customers are—quickly and efficiently—because speed and choice are everything,” says Bobko. He also points out, “How we shop is changing; how we fulfill purchases should, too.”
And that’s just to keep up with the way we’re doing business today. But what about tomorrow? “
“It’s always been difficult to predict the future. Will we see Amazon’s train-mounted drone deliveries or hovering dirigibles? Maybe not in the near-term, but check back in about five years, just to be sure,” says Bobko.
We don’t know what future consumers will want, but we know that in order to continuously keep up, you must build flexibility into your logistics network so you can be agile enough to meet the demands of your customers.
“How we shop is changing; how we fulfill purchases should, too.”Joseph Bobko Vice President of Transportation at Boxed
3. Future-proof your supply chain
With changes coming faster than ever, transformation is something that retailers and brands need to be proactive about, particularly in the supply chain. Think about all the businesses that doubted the impact of eCommerce and didn’t adapt. They’re gone now.
The supply chain industry is in a similar position. If the goal is to get goods to store shelves, then supply chains are incredibly efficient. But, that hasn’t been the case in nearly two decades. They must support physical and online retail, and while many retailers have made strides to transform their linear supply chains, it isn’t happening fast enough.
“Though we are still in the early stages of the digitization of the supply chain, when we are finished, it will have evolved from a clunky, reactive, operational process into a strategic profit driver, woven deep within the fabric of every competitive business,” says Neil Ackerman, Senior Director of Global Supply Chain Advanced Planning and Innovation at Johnson & Johnson.
Ackerman outlines six technologies that are transforming the supply chain:
- Demand sensors and signals: Infrastructure which provides continuous real-time input from customers to improve customer satisfaction with “right time and place” supply
- Artificial intelligence (AI)/big data: Aggregation and analysis of massive amounts of data to identify and respond to trends in customer demand
- Advanced robotics and machine learning: Modern warehouse management, plus “non-physical” robotics such as database tools for deeper trend analysis that can more accurately forecast based on past trends and current state
- Internet of Things (IoT): Connected devices, vehicles, and buildings that collect and exchange data
- Automation / 3D printing: Delivering custom service that meets the most specific, time-sensitive customer demands
- Augmented or virtual reality (AR/VR): Generated simulations that lead to faster decision-making and avatar realities
While some technologies feel a little too futuristic to implement now, the same thing was said by those companies that doubted the internet and eCommerce. “You must at least be planning for the transformative process ahead—or planning to hire people that can help you get there.”
“You must at least be planning for the transformative process ahead—or planning to hire people that can help you get there.”Neil Ackerman Senior Director of Global Supply Chain Advanced Planning and Innovation at Johnson & Johnson
4. Don’t neglect the humans behind your brand
As logistics becomes evermore important for the success of the retail industry and the demand for qualified workers increases, the labor shortage continues. Technology will play a critical part in remaining competitive, and it’s the humans behind it that will ultimately determine whether or not they are successful.
Ryan Gorecki, Senior Director at Innovel Solutions, said that “it takes experienced workers to operate all the new technology, and the most successful supply chain operators will be those that can identify and deploy them both.”
Gorecki’s view is that the scope of the work for logistics professionals will change, providing new opportunities that attracts new talent. We don’t have a direct replacement for quality control, and while technology will enable the industry to automate some tasks, humans will be needed to monitor and operate the tech.
He also points out that “quality-of-life improvements are necessary to attract and retain more qualified employees who are in short supply across the board.” These can include efficiency improvements designed to make their jobs easier and/or basic benefits like health coverage.
“It takes experienced workers to operate all the new technology."Ryan Gorecki Senior Director at Innovel Solutions
5. Don’t underestimate the power of the “wow-factor” in retail
In retail, “good” is no longer good enough. With the unlimited options that eCommerce now provides, only the retailers and brands that go above and beyond stand a chance at surviving. But what does “above and beyond” really mean?
According to Mike Koppel, former Chief Financial Officer of Nordstrom, “the retailers that make it through this digital transformation will be the businesses that take advantage of what makes them different through [their] products and new technology—keeping the elements that make shopping special and translating those distinctions online.”
As much as technology has upended the retail landscape, it can also be its saving grace. As Koppel points out, “technology is enabling experiences that weren’t possible before the Internet was accessible in our hands. It’s an opportunity to create “wow” moments across multiple channels.”
He also says, “The truth is that no matter how high-fashion your brand is, you’re in the technology business now.” But, you don’t have to manage it alone. “Helpful partners are emerging to deliver things like big data analytics, fulfillment support, and the technologies that make it work.”
From online apps to in-store experiences to last-mile logistics, technology can be used to simplify and enhance the customer experience at every step—retaining and winning more customers.
“The truth is that no matter how high-fashion your brand is, you’re in the technology business now.”Mike Koppel Former Chief Financial Officer of Nordstrom
Digitally transforming your logistics strategy
Retail is far from dead, but it requires some new tactics to survive. From your products to your physical and online stores to your logistics strategy that supports your business, technology can have a massive impact on the customer experience.
We’re all in the technology business now. But, technology presents so many opportunities to build smarter operations and processes that enable you to better connect with customers and really thrive in the wake of all this disruption.