Retailers have navigated through a lot these last two years.
Lockdowns and restrictions during the first year of the COVID-19 pandemic pushed e-commerce forward faster than ever and retailers across the board saw complex operational challenges tied to both the workforce and supply chain.
Two years later and it seems that nearly every retailer out there has deployed some sort of new, innovative solution or service due to pandemic necessity.
Click-and-collect sales in the United States skyrocketed to $72.5 billion in 2020 and retailers like Target and Walmart have been playing tit for tat in a fierce competition of whose pick up and delivery services can out-convenience the other.
And while we must all tip our hats to the entire industry for working incredibly hard to meet consumer demand, retailers are now facing brand new challenges that come as a byproduct of quick innovation.
Consumers want it all
According to a recent consumer study released by the IBM Institute for Business Value in association with The National Federation (NRF), hybrid shopping—the blending of physical and digital channels—was cited as the primary shopping method of 27% of consumers. That number jumps to 36% when looking at Gen Z, who currently represent 40 percent of U.S. consumers.
At the same time, 72% of consumers say they use the store as all or part of their primary purchase method. In other words, consumers are increasingly using digital channels to shop but the store remains an integral element of their shopping journey.
As IBM’s study suggests, consumers want it all. As such, retailers must develop and maintain agile strategies that will ensure they provide an exceptional retail experience, in every channel, while simultaneously outpacing the competition.
And therein lies a key question retailers are asking themselves today: how can they provide everything and anything to everyone—whenever and however they may want it— all without missing a beat or losing a SKU?
The answer lies clearly within the realm of technology investment but first retailers must determine what to invest in—and they need data to do it.
The right tech to please them all
During a fireside chat at the NRF’s 2022: Retail’s Big Show, held Jan 15-18, IBM Chairman and CEO Arvind Krishna sat down with Jon Fortt, co-anchor of CNBC’s “TechCheck”, to discuss how retailers become more agile when powered by the right technology.
And according to Krishna, retailers must begin by looking at new metrics.
Krishna explained that old metrics—like parking lots and foot traffic—no longer show a clear picture of what future demand will look like due to ever-increasing variables that impact how and where consumers choose to shop.
For example, a news report or social media post about a regional shortage could prompt consumers across the country to take part in what Krishna called “just-in-case” buying—a not-as-aggressive form of panic buying that can still lead to inventory shortages if employed by too many shoppers.
Other factors include labor challenges that start at the store and fan out all the way to ports and shipyards.
Krishna said that making sense of numbers for a single month or two is outdated in today’s climate. Instead, retailers need to begin to look at longer terms.
To do this, retailers should look at building data systems that will give them a true sense of demand. From there, retailers can determine what technologies will bring them the most value: Do they need to cross train more associates on click-and-collect, is their supply chain agile enough to fulfill changing demand, what orders should they be preparing for ahead of the holiday season—these are all questions retailers must ask themselves.
And if they don’t, it’s only a matter of time before their customers do.
“Technology is no longer a cost of doing business,” Krishna said. “Technology is now a big source of competitive advantage.”
