Retail efficiency should guide all your business decisions regardless of size. For retailers with an on and offline presence, operational efficiency is even more of a challenge yet can be even more rewarding. It’s time to improve your operations at every stage, from warehouse management to admin.
It’s a tough world out there
It’s been a tough year for retailers. Most have struggled with rising business costs and economic pressures. BREXIT uncertainty has also exacerbated many existing issues, and high street closures are now a sign of our time.
As well as rising commodity prices and staff costs, retailers are also contending with changes in consumer buying behaviour. In fact, according to research by Deloitte, despite recent improvements, consumer confidence is still negative.
Rising expectations and a demand for superior experiences make for a tough crowd to please. The expectation for fast and convenient services at affordable prices continues to rise, encompassing the entire consumer experience, from in-store checkouts to online shipping. It’s clear that many brands are struggling to keep up with these soaring expectations, with research from KPMG Nunwood showing an overall decline in the Customer Experience (CX) Excellence score. Only 8% of the major British brands managed to make any improvement on their 2016 scores.
Retail efficiency is at the heart of everything
Operating costs can make or break a retailer faced with already high economic pressures. Cutting waste and streamlining business processes can deliver cost savings direct to your bottom line. Even for those that seem to be on calm waters, these types of efficiencies can provide some much-needed security for the future.
Operational optimisation is also the key to delivering the type of experience your customers want. And if you don’t do it, you can bet your competitors will. From implementing the latest processes to minimising their impact on your current systems, evaluation and improvement of your operational capabilities are essential to balancing your customer needs with your business needs.
The new operational technologies
While it may sound challenging, it’s not all bad news. Retailers have access to more resources than ever before to help answer these challenges. These resources come in the form of new agile technologies including software designed to deliver on speed and convenience for a superior customer service.
Similar technologies have made way for advances in AI and automation and are now being used by progressive retailers in both front and back office operations. This digital transformation has prompted streamlined retail operations and unparalleled efficiencies.
Informing the whole process is big data. These technologies provide access to a wealth of customer and operational data. Combined, this gives a holistic cross-channel picture to inform business decisions. Superior insights like this feedback into operational decisions to inspire continual improvement.
Realising operational efficiency
Gain or lose with inventory
Real-time inventory is becoming a must-have for customers and retailers alike. With inaccurate inventory information resulting in overselling and disappointed customers, retailers can face increasing pressure on customer services, lose time and waste money on preventable refunds. When faced with inadequate inventory information, today’s customers are likely to go elsewhere.
There is as much to gain as there is to lose. Synchronising real-time inventory means customers can view a product online even when the item is in store rather than the warehouse. Even if the item can’t ship to the customer you can encourage store visits. In fact, real-time inventory means you can even offer a stock finder service. Customers can find where their product is stocked and head to the nearest or most convenient store. Not only does this deliver on key expectations, it is also an essential strategy for driving important in-store traffic.
Tidy warehouse, tidy operations
Warehouse layout can easily be overlooked when there are more seemingly urgent operational problems. While it may not seem like it, an optimised warehouse layout could deliver direct time and thus cost savings. Better organisation of your warehouse means logistics and fulfilment teams can work quicker and more effectively with less errors or late orders.
By looking at your purchase and shipping data you can gain insights into what products sell most frequently or are often sold together. The warehouse can then be organised to reflect this, with items positioned in the places that they will be picked and packaged quickest. Don’t forget to give products clear and suitable labelling to ensure there is no time wasted on searching for the right item.
Fulfil it every time
Optimising order fulfilment goes hand-in-hand with your inventory and delivery capabilities. New ship-from-store services allow retailers to take in-store inventory a step further. Online orders can be fulfilled with products that are being held in-store, even if warehouse inventory is out. If you offer click and collect services, these orders can be fulfilled from stock already held in the chosen store.
Efficient order fulfilment can reduce the time and money involved in shipping warehouse stock to a store that already has the items. This can deliver significant cost savings and speed up click-and-collect times.
Deliver better shipment
The final piece to inventory and order fulfilment, delivery has become an integral part of the retail experience. Customers now expect affordable and convenient delivery with services like nominated day delivery. Until recently, retailers have struggled to provide these delivery options and stay kind to their bottom line. For smaller businesses, the cost of providing these services at customer friendly prices can quickly eat into margins. With customers easily swayed by superior shipping, there is a risk of missing out to bigger and more prepared competitors.
Fortunately, modern shipping software has opened these opportunities to almost any retailer. Shipping integration platforms offer a central hub that can connect you to hundreds of couriers, enabling you to find the best service on an order by order basis. Not only does this mean customers get the delivery they demand, it’s also much more cost-effective. Find the most affordable courier for the job and track your costs over time. You can then monitor effectiveness and make data-driven business decisions with your bottom line in mind. Combined with your inventory and order fulfilment systems, you can begin to identify opportunities and areas for improvement for a more efficient end-to-end process.
Bring the online in-store
Your physical stores are a key conversion tool in your retail arsenal. Your store needs to be optimised like any other channel to provide the best possible customer experience and efficiencies for your business. Rather than acting independently, your channels can be better utilised together. Ecommerce data is a treasure trove of insights on your customer’s behaviour and should be used to inform in-store decisions.
You may already use related product and cross-sell data to improve average order values (AOV) online. This same strategy can guide the layout of your store, positioning bundled items close together to encourage purchases. For example, arranging items of clothing in outfit groupings rather than just by product type. Additionally, experiment with promotions that drive online versus in-store purchases to find the most profitable customer journey for you.
Invite your online efficiencies in-store by arming staff with POS tablet systems. Synched with inventory and other online data, this equips your staff with all the information they need to convert customers on the spot. From product information to ordering a product size that is out of stock, your physical stores can be just as capable as your online store for fulfilling orders and meeting customer expectations.
Beyond the obvious customer benefits, offering this type of omnichannel experience is at the root of retail efficiency. It leverages every opportunity offered by your multiple channels to get the most from each one. Plus, the flip side of more happy customers is less unhappy ones. This can have a positive effect on customer service and returns, both of which suck up time and money.
Get to work on automation
While your separate inventory, shipping and other ecommerce systems can provide some operational benefits, automated omnichannel workflows entirely depend on these applications working together. By automating some of the more mundane admin tasks you can free up time to spend on other areas of your business. Chances are that these processes can be performed much faster and more accurately as an automated workflow, driving home further time and cost efficiencies for your operations.
Dig into the data
Finally, don’t forget to keep going back to the data. The best thing about connected cloud applications is the treasure trove of data they offer. Get insights from the entire customer journey and start to understand the effect each operation has on the others.
With access to this type of data, it becomes possible to track key metrics such as order rates. Identifying where errors occur or which areas are performing more efficiently can help inform your overall operational decisions. By using information from the smaller parts to help the whole, it’s possible to streamline the entire operational process and deliver benefits to your customers and your business.
Aim for agility
As a smaller business, you might be forgiven for thinking that when it comes to operations you’re at a disadvantage. In the past, the bigger budget has always won at logistics and efficiencies thanks to better technology, more staff and bigger networks.
Today, all these moving parts simply get in the way. Now, agile businesses have a competitive advantage. While big established companies rely on clunky legacy systems, cloud applications are affording the smaller players unparalleled benefits. With the help of integration platforms like Mothercloud, you can have access to the same resources and processes as large operational networks for a fraction of the cost and set-up time. Once established, these systems can grow with your business and scale to fit your needs.
Find out more about Mothercloud and the many applications already supported on our network by calling 0203 637 7920.