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How Technology is Closing the Gap Between Physical and Online Stores & Distribution Centers

Why retailers who were dabbling with "digital transformation" before 2020 are picking up the pace


Let’s face it, many retail strategies that worked in 2019 stopped working in 2020 when merchants found themselves in the unthinkable position of telling customers not to come into stores. Without showrooms, sales staff, or in-store displays, it became next-to-impossible to demonstrate new products or sell anything at all.  

Retailers with viable e-commerce platforms relied on websites to retain some revenue.Still, many local businesses couldn’t fulfill online, and even large chain stores were unprepared to process and ship unexpectedly heavy volumes of new orders.  

Meanwhile, retail analysts report, the direct-to-consumer (DTC) bubble of the ‘aughts appears to have popped before the pandemic ever started. It turns out that the magic marketing formula of “cheap social media + unadorned screen-worthy logo + unlimited free shipping” that worked for a few online innovators like Warby Parker and Casper Mattress doesn’t hold up under intense competition. Venture capitalists who once eagerly backed new DTC brands are now tightening their purse strings and demanding profitability over unlimited revenue growth.

Today, after a few tumultuous years capped off by a global pandemic, the entire retail industry is rethinking the pros and cons of online vs. offline business models. We’ll use this first post of 2021 to look at how new technologies are addressing the issue by blending the two together.

Our old friend BOPIS

We’ve always been fans of the buy online, pick-up in store (BOPIS) sales model, and we’ve written about it on numerous occasions. Why? According to Forbes, “the most profitable order is one fulfilled at the store, where store inventory is leveraged and the consumer assumes last-mile fulfillment cost and effort.” In other words, BOPIS and its kissing cousin — buy online, pick-up at curb (BOPAC) — are optimal channel strategies because they save merchants the trouble and expense of fulfilling at-home deliveries.

Forbes says that behind every successful BOPIS experience is a robust, cloud-native order management system with enterprise inventory visibility and the capacity to deliver a single unified view of orders, items, and payments. By giving customers control over when to pick up online orders, the system effectively offers the best of both physical and e-commerce channels — the ease of browsing and buying on a phone or computer, the speed of same-day delivery, and the freedom to visit a nearby location for fulfillment.

Retailers are adopting BOPIS because it’s cost-effective, it reduces the risk of shipping delays, and it improves customer satisfaction. Consumers are on board because BOPIS is faster and more convenient than waiting for packages in the mail, more secure than home delivery, and a safer way to shop during a pandemic. It’s a win, win, win. 

Mobile apps move merchandise

It turns out that staying indoors and away from other people for months at a time makes people want to shop. Smartphones were already responsible for 84% of holiday purchases in 2019 and likely more in 2020 due to COVID-19.

The mobile devices we carry today aren’t your father’s cell phone. Packed with cameras and sensors, they have evolved from portable screens to browse websites into integral components of creative merchandising and store operations. Here are a few ways mobile technology is contributing to seamless omnichannel retail experiences:

  •  Collecting data: mobile apps are designed to learn as much as possible about you based on your search and purchase behavior. It sounds sinister, but the more sellers know about your preferences, the more they can personalize product recommendations to offer goods you really want, where and when you want them.
  •  The “endless aisle experience”: according to RetailDive, when you can’t find the item you’re looking for and a sales associate offers to use their iPad or other mobile device to track it down at another location, they’re creating an “endless aisle.” If it’s not in the store you’re in, you can use digital technology to head down the aisle in another.
  • Flagship stores: the ability to touch or handle goods in a store can be the difference between a sale or no sale, or a sale and a bigger sale.Brick-and-mortar locations where sales staff suggest and demonstrate products can be a significant advantage, but physical stores are expensive. Flagship store locations blend tactile shopping experiences with online fulfillment. Customers can see samples of physical goods before purchasing exactly what they want on their phones. Merchants can hold less inventory on the floor because orders are fulfilled by mail or at centralized pick-up locations.
  • Social merchandising: more than 3.4 billion people used mobile social media in 2019, and 79% of smartphone users made a purchase on their mobile device in the last six months. That makes Instagram, Facebook, and Pinterest primary channels for brands to test new product ideas and gather feedback about what’s working and what’s not. 

Advertising gets real with augmented reality

Augmented Reality (AR) is mobile software that uses your cell phone screen to insert digital images into a real-world environment to create interactive, three-dimensional experiences. It sounds futuristic, but AR advertising topped $1.4 billion last year and is forecast to reach $8 billion by 2024. Consumers can already use AR on mobile phones to try on apparel, rearrange home décor, or look under the hood of a new BMW without ever going into the showroom.   

With COVID restricting our ability to go to stores, “more retailers are beginning to use augmented reality to simulate the try-on experience,” according to AR Insider. Even restaurants like Panera are using augmented reality to help hungry customers visualize the menu. If you weren’t hungry before, their logic says, you’ll be craving that breakfast wrap after you see it come to life on Snapchat.

The super-techy, immersive nature of AR has a special appeal for luxury brands that want to appear relevant and cutting-edge. DeBeers Forevermark Diamonds and Tissot watches let customers virtually try on expensive jewelry that moves naturally to catch the light with the turn of a wrist. Fans of designer brand Burberry can use AR to view Google search results in 3D. Athletic shoemaker Adidas built AR into its new mobile app – you point your iPhone at your feet, walk around in your virtual kicks, customize your size and colors, and complete the purchase right where you are. These companies are also finding there’s a practical reason to let consumers experience virtual products. It turns out that seeing items in actual size in the real world can make it easier to justify buying expensive goods you can’t try on in person.

About Cura Group

Cura Resource Group is in the business of helping merchants fulfill customer orders, even if they don’t have a physical store. Our high-volume Sales Centers serve as distribution centers to stock fast-moving inventory for quick distribution and provide a local pick-up center for customers in underserved delivery areas. We also offer proprietary, custom software for buy online, pick-up in store or pick-up at curbside solutions.

Contact us today to discuss a local strategy that will get you closer to your customers and make product access a positive experience.

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Topics: direct sales e-commerce shopping customer pick-up center omnichannel shopping mobile