COVID is changing retail fulfillment for good. Omni-channel fulfillment is here to stay. Let’s look at a few interesting retail e-commerce data points between Q2 and Q1 of 2020:
As more and more purchases move online, how can you control costs and increase foot traffic? Start out by exploring alternate fulfillment models, Click and Collect may be the answer.
What is Click and Collect? When a customer purchases a product online and collects it in-person. Small retailers are getting crushed by added shipping, delivery, digital marketing and other fulfillment expenses. The problem with a singular online fulfillment approach– it is a one-size fits all model. You are asking small retailers to adopt an entirely different business model while stuck with the infrastructure of in-person fulfillment.
Some revenue is always better than no revenue. Where does profitability come into play? Pretend for a moment you are a craft brewery built around in-dining experiences. You made $42 per 6 pours (assume you charge $7 per for a 12 ounce pour) and now the majority of your sales come from delivery. That means for the same inventory quantity you make $10 instead of $42 per six pack. Then add on top of that your prep and fulfillment costs. Your margins keep shrinking and shrinking. How do you offset a situation like that? In all honesty, you can’t.
Small retailers must start thinking about customers through the lens of fulfillment models and answer 3 questions:
This is where omni-channel strategies like Click and Collect come into play. Customers want the following from us:
Your customer profiles impact whether or not a Click and Collect model is suited for your retail business. A recently published IBM Report exposed 4 consumer types:
Figuring out what customers you sell to will determine if a Click and Collect model is right for your retail business.
You can’t succeed with Click and Collect without product visibility.
Can you provide it to your customers? It may require changes to your business process or investing in technology that can instantly audit inventory levels across sales channels.
Without inventory consistency across sales channels you can’t track how effectively Click and Collect is working or which product offerings are best suited for this type of fulfillment model.
A worst case scenario is to create a purchase experience that increases the risk of stock outs.
Are you measuring the right things for the right fulfillment channel? What are your customer acquisition costs (CAC)? Measure KPIS for Click and Collect to compare against other fulfillment channels. Measuring:
Can you answer the questions your customers care about? Where did this come from? How long have you had it? How was it handled?
Keeping your customers abreast of the status of a product without the need of a phone call or reading an email is mandatory. Can you let them know what the status is at any point in time during the fulfillment process?
If something goes wrong with the customer’s order how will they get informed? How precise is the time for pickup?
Think about all the factors that cause uncertainty and make sure you have a plan for it. Customers expect Amazon level status notifications, can you give it to them?
Click and Collect purchases are up *60% in 2020. I hope you'll use our list of considerations before adopting your Click and Collect strategy. Accessing the benefits may prove worth the time and effort.
Feel free to message me with any questions.
Ovalz wants to empower retail e-commerce businesses by continuously auditing inventory levels to avoid stockouts—without clipboards or spreadsheets. Marvin and Albee founded Ovalz after hearing quotes like this one from Kathryn Hoerster, a bakery owner in Silver Spring, MD “We spend time every day on inventory– the more time we can save on that task, the better”. Ovalz was born from stories like Kathryn’s, especially the ones that took place during COVID-19.
Marvin is available across social channels @marvharris on LinkedIn, Twitter and Instagram.