Bricks and mortar retail stores are set to play a more active role in the supply chain as they shift toward becoming centres of order fulfilment, new research suggests.
According to Retail Systems Research, LLC’s (RSR) latest benchmark report, 64% of retailers strongly agree that stores are the primary fulfilment point for online orders, a perspective shared by just 43% in 2018.
The firm’s twelfth report on the state of the retail store, ‘The Store In 2019: Fulfilling Orders And Serving Customers’, states stores will soon become a different type of activity hub: with a more active role in the supply chain, and varying purpose along the path to purchase.
Winners believe they can use the store as a fulfilment centre, the report states, driving traffic with localised assortments and personalised content available to consumers on the selling floor – and technology investments align with that change.
“It’s not just about new stores in new markets,” said Paula Rosenblum, managing partner at RSR. “Retailers tell us they know stores must retain their traditional role, but now see tremendous opportunity to transform them into something different – including a fulfilment centre for online orders. Buy online/pickup-in-store was a talking point before; now retailers see it as a tremendous profit opportunity.”
Meanwhile, the report also shows that after ten years of redesigning the customer-facing side of the retail model to accommodate consumers’ digitally enabled paths-to-purchase, retailers have reaffirmed and recommitted to the importance of the store – not “as an island of retail activity”, but as a key node within an integrated selling environment.
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By GlobalDataThe study found that 54% of over-performing retailers across most verticals believe that stores will remain their most profitable selling channel, and store investments are a major priority for this group. But, given that 41% of retail winners are hesitant to deploy new technology because they believe stores already have too much going on and the same number of all retailers struggle to get past ROI discussions around new tech, they have begun to refocus their investments.
Key highlights include:
- 58% of all retailers plan to open new stores in the near future, and 56% plan to open stores in entirely new market
- 63% of retail winners are focusing on major redesigns of existing stores
- 52% of all retailers plan to replace existing stores with new formats entirely
“What’s wild is the variety of cutting-edge technologies that have captured retailers’ imagination,” said Steve Rowen, managing partner at RSR. “But when we ask ‘What are you doing with technology so far?’ the answer tends to come back, ‘We just throw a TV screen up and hope it helps.’ Thankfully, some real change looks like it’s just around the corner.”
Other findings include 51% of retailers stating they would invest in robots if money was no issue, but 63% said they would hire “better people”, while 78% said employee-facing in-store fulfilment tech is ‘high value’.
In addition, 25% of retailers believe personalisation of content is not viable in the context of the current store shopping experience, what RSR notes as a “massive problem” given that 68% strongly believe it is viable.
The report, supported by Reflexis, is part of RSR’s ongoing efforts to provide market intelligence on retail technology trends.
