This article is part of Raydiant’s Future of Brick and Mortar Retail series featuring interviews with industry experts and thought leaders with the goal of providing actionable insights that can help brick and mortar retailers prepare for what lies ahead.
The following is an interview we had with Kristen Moore, CMO of inVia Robotics.
What are the 3-5 top trends that will shape brick and mortar retail in 2021?
- Microfulfillment, where smaller fulfillment centers are being set up closer to customers in urban areas to reduce delivery times. This was a trend that started before 2020 that has accelerated because of a surplus of idled retail space. You’ll see a lot of stores reallocating retail space to set up e-commerce distribution operations. This will let stores take advantage of one of the other top trends, where customers don’t come into stores to browse and buy. They place their orders ahead of time online and come to the stores to pick them up. This requires a shift of resources and focus to the back-end fulfillment operations to support a good online customer experience.
- Buy online and pick up in store (BOPIS), where customers shop and buy online and pick up their orders at a store instead of having them delivered. This is another trend that requires a shift of resources and focus to e-commerce operations to support a good online customer experience. The importance of merchandising and product selection in the buying process shifts from in-store to the website.
- Reorganizing operations to shift sales from in-store to online. Some portion of retail traffic will come back once the pandemic ends, but there is some portion that won’t. People have become accustomed to the convenience of e-commerce, and they’ll increase the proportion of shopping they do online. In fact, 40% of people say they intend to make more online purchases post-COVID. In order to maintain sales growth, retailers will have to shift a bigger portion to e-commerce.
What technologies will have the biggest impact on brick and mortar retail in 2021?
KM: Fulfillment optimization software will be a game-changer in customer satisfaction. Retailers have traditionally focused on improving the customer-facing experience to grow sales. That’s now catching up to them on the back end. An increase in sales puts pressure on fulfillment operations, and it’s starting to burst at the seams. Retailers are having to create more efficient processes to make better use of resources. Software has emerged that can help identify efficiencies and create operation plans that maximize the use of labor and processes. That ultimately creates a seamless experience for consumers when their orders are delivered and helps with customer retention.
What should brick and mortar retailers be doing now to prepare for 2021?
KM: Retailers should look at the bigger picture in their supply chain in order to identify interdependencies. It became clear in 2020 that when systems really get pressure tested, an issue in one part of an operation can end up hodling the rest of the system hostage. Planning for disruptions effectively is going to require a holistic view and the ability to dynamically reallocate resources to keep them balanced.
In the midst of so much change and uncertainty, what’s the future of brick and mortar retail look like?
KM: Retailers will see a larger portion of their business shift to e-commerce, and at a faster rate. Retail stores will still exist, but their main function will be as a showroom and as a pickup site. That means less labor and inventory needed in stores, and more labor and inventory needed in warehouses. Stores will look more like a storefront, so branding and aesthetics will become more important in brick and mortar locations than merchandising or customer service. Those functions and investments will shift to virtual interactions.