Customer expectations are rising in every sector, and brick-and-mortar retail is no exception. In today’s market, shoppers have plenty of choice about where, when and how they purchase. If they decide to head into a store, it’s because they are looking for more than a product; they’re looking for an experience that direct-to-home deliveries can’t offer. When retailers fall short, customers are quick to take their business elsewhere, with a recent survey finding that more than half (57%) of shoppers are likely to abandon their cart when facing a long checkout line.
by Myron Burke
It’s a startling statistic, and one that retail leaders recognize as an opportunity to improve their in-store operations and firm up their customer experience (CX) practices. They’ve poured countless dollars and hours into improvements to their customer-facing touchpoints, with many achieving meaningful progress. But there’s a limit to the impact retailers can achieve with front-end improvements.
To overcome that plateau, they’ll need to start looking at their operations from the source to the sales floor.
A Complicated Path to Purchase
The moment of purchase does not happen in a vacuum. Just as shoppers’ journeys often start far before they set foot in a store (with research, advertisements or inconveniences in their daily lives), a product’s journey to shelves begins many days or months before it arrives at the store.
The same is true for abandoned purchases and the bad experiences that so often drive them. According to a recent report by HappyOrNot, these CX failures are most likely to be related to pricing, checkout processes and inventory issues (product availability, quality and selection). And, yes, on the surface these mostly appear to be in-store issues, but the foundation for all of these missed opportunities to delight patrons is laid well before a customer sets foot in the store. No amount of operational tweaking within a store’s four walls can make up for the rest.
To reduce friction and keep customers, it’s not enough for retailers to know what is on the floor. They must also know what’s on its way, where it’s coming from and when it will arrive. That means extending visibility to every corner of manufacturers’ facilities, transportation networks and warehouses.
The Full Picture
Extending insight to the point of manufacturing helps retailers map out products’ journeys from source to store. This helps contextualize customer experience feedback and in-store insights to paint a picture of the ways backend bottlenecks become moments of friction that impact revenue, loyalty and overall brand reputation.
At the same time, it helps retailers segment their supply chain more precisely. Retailers that “close the box” (use sensor hardware to create discrete zones throughout their operations) can see exactly where and when obstacles arise, allowing them to identify and address issues from their roots with confidence. Once they have this comprehensive and detailed portrait, retailers will be able to overcome the improvement plateau many have encountered in their pursuit of seamless in-store experiences.
Source-to-store systems help retailers take a holistic approach to operational improvement, informing changes to:
- Labor practices. When associates have accurate en-route and in-store inventory information, they spend less time organizing the floor and looking for products and more time focusing on shopper needs, expediting checkouts and other satisfaction-driving tasks.
- Total retail loss evaluation. Some of the biggest drivers of loss within retail organizations happen before products ever hit the floor. Issues at the manufacturer, in transit and in storerooms all contribute to losses, and understanding how those factors intersect within the businesses often changes retailers’ approach to controlling costs. After all, less waste means better margins and more freedom to price products competitively without hurting revenue.
- Inventory management. Knowing what’s coming and when is as important as knowing what’s going. RFID-based item tracking helps ensure deliveries are accurate, inventory records are up-to-date and shelves stay stocked, even when demand spikes. That way, shoppers come to trust that a retailer will have what they need every time they visit.
- Supply chain performance. Late deliveries or incomplete shipments may not be the result of a retailer’s actions—but they are the retailer’s problem. Customers don’t know what company failed to ship the right number of units, but they do know that the store’s shelf was empty. Source-tagging can help retail decision-makers identify trends in partner performance so they can address issues head on.
Getting this insight is easier than many retailers think, too. The same tools that they use to collect data in brick-and-mortar locations can be repurposed to provide insights from other areas of the business:
- RFID labels and sensors allow retailers to count merchandise at the item (or category) level to keep track of how, when and where products move.
- Integrated data analytics tools provide a single source of truth for operational insight.
By setting up a source-tagging program—meaning RFID and EAS labels are applied at the point of manufacturing—retailers can fold upstream data into their analytics ecosystems to visualize their supply chain without significant investments in new tools or systems. Given the findings above about the impact of inventory mismanagement on CX, this simple adjustment to when tags are applied can move the needle significantly toward addressing three of customers’ most commonly cited satisfaction concerns. Further, source-tagging might even save retailers money immediately, as it mitigates the need for hand counts and manual application upon receipt.
Look Back to Move Forward
As customer expectations continue to evolve, retailers must recognize that the journey to a sale begins long before shoppers enter the store. By adopting source-to-store systems, retailers can gain valuable insights into their supply chains, inventory management and operational efficiencies, allowing them to identify and rectify issues that may impact customer satisfaction.
This holistic approach helps retailers meet customers’ needs and their own goals, driving improvements in labor practices, decision-making and loss prevention while not just preserving but enhancing in-store experiences. Most importantly, it empowers retail leaders to meet the rising expectations of today’s consumers, ensuring loyalty and sustained success in a competitive marketplace.
Myron Burke head of global product and solutions for Sensormatic, Myron leverages his global retail experience to develop the next generation of retail loss / risk management solutions, including inventory management solutions.
Photo by james chan on Unsplash
