Introduction
As the world grows increasingly digital, many brick-and-mortar retailers have struggled to stay relevant. However, an article from McKinsey & Company argues that physical stores can be a strategic asset for retailers. By integrating their offline and online channels into a seamless omnichannel experience, retailers can provide customers with more personalized and convenient shopping options, boost sales, and improve customer loyalty. In this blog post, we summarize the McKinsey & Company article and provide our own insights and recommendations for how retailers can unlock the full potential of their physical stores.
Physical Stores as a Strategic Asset
The McKinsey & Company article highlights several reasons why physical stores are a strategic asset in omnichannel retail:
Stores provide a physical presence that can help build brand awareness and customer trust.
Stores enable customers to touch and feel products before purchasing.
Stores allow for more flexible fulfilment options, such as buy online, pick up in store (BOPIS), and buy online, return in store (BORIS).
Stores can be used as distribution centres for faster and more cost-effective shipping.
While there is no doubt that e-commerce has transformed the retail industry, physical stores still hold a significant amount of value. In fact, a recent study found that 78% of consumers prefer to shop in physical stores, where they can see, touch, and try on products before making a purchase. This suggests that retailers who can integrate their offline and online channels into a seamless omnichannel experience will be well-positioned to succeed in the competitive retail landscape.
Integrating Online and Offline Channels
The McKinsey & Company article also outlines several recommendations for how retailers can effectively integrate their online and offline channels:
Create a single view of the customer by integrating data across all channels.
Leverage technology to provide more personalized and convenient shopping experiences, such as mobile apps and in-store digital displays.
Optimize store layout and merchandising to showcase products and drive sales.
Use physical stores as fulfilment centres for faster and more cost-effective shipping.
By integrating their online and offline channels, retailers can create a seamless omnichannel experience that meets customers' needs and expectations. One great example of this is Warby Parker, which started as an online-only eyewear retailer but has since opened physical stores that allow customers to try on frames and get expert advice from staff. The company has seamlessly integrated its offline and online channels, allowing customers to complete purchases online or in-store and offering flexible fulfilment options such as BOPIS. As a result, Warby Parker has been able to build a loyal customer base and expand its reach.
Optimizing Store Layout and Merchandising
To effectively leverage their physical stores, retailers must optimize store layout and merchandising:
Use data and analytics to understand customer behaviour and preferences.
Redesign store layouts to create a more cohesive and engaging shopping experience.
Use signage and displays to guide customers through the store and highlight new products or promotions.
Use technology such as augmented reality and virtual reality to enhance the in-store experience.
Physical stores can be a powerful tool for retailers, but only if they are optimized to meet the needs and preferences of customers. By using data and analytics to understand customer behaviour and preferences, retailers can create store layouts that maximize engagement and drive sales. For instance, Sephora has redesigned its stores to make them more open and inviting, with interactive displays that allow customers to try on products and get expert advice from staff. This has helped Sephora to improve customer loyalty and drive sales.
Key Messages
The article highlights several key messages related to the importance of physical stores in omnichannel retail. First, physical stores remain a crucial asset for retailers, despite the growth of e-commerce. Second, retailers can leverage their physical stores to improve the customer experience and drive sales growth in the omnichannel environment. Third, retailers face several challenges in leveraging their physical stores, including inventory management, supply chain operations, and data analytics. Fourth, retailers can benefit from a variety of strategies to leverage their physical stores, including click-and-collect, ship-from-store, and in-store experiences.
Highlighted Strategies
To leverage their physical stores effectively, retailers can implement several strategies that are proposed in the article. These strategies include:
Leveraging data and analytics: Retailers can leverage data and analytics to better understand customer behaviour and preferences. This can be achieved by using customer data to personalize the in-store experience, optimize inventory levels, and improve supply chain operations.
Optimizing inventory management: Retailers can optimize inventory management by ensuring that the right products are in the right place at the right time. This can be achieved by using real-time inventory tracking, optimizing store inventory levels, and implementing automated replenishment systems.
Streamlining supply chain operations: Retailers can streamline their supply chain operations by optimizing their distribution network, improving transportation efficiency, and reducing lead times.
Offering click-and-collect and ship-from-store options: Retailers can offer click-and-collect and ship-from-store options to improve the convenience and speed of omnichannel delivery.
Enhancing in-store experiences: Retailers can enhance in-store experiences by offering personalized services, such as styling advice, and by using technology to improve the customer experience.
How Seeplus by Inovretail can help
Seeplus by Inovretail can help retailers with the issues and strategies explained in the article by providing a comprehensive retail management system that includes inventory management, supply chain management, and data analytics.
With Seeplus, retailers can leverage data and analytics to better understand customer behaviour and preferences, optimize inventory levels, and improve supply chain operations. This can help retailers to personalize the customer experience and improve the speed and convenience of omnichannel delivery. Seeplus can also help retailers optimize their inventory management by ensuring that the right products are in the right place at the right time. This can be achieved by using real-time inventory tracking, optimizing store inventory levels, and implementing automated replenishment systems.
Furthermore, Seeplus can help retailers streamline their supply chain operations by optimizing their distribution network, improving transportation efficiency, and reducing lead times. By doing so, retailers can offer click-and-collect and ship-from-store options, which can improve the convenience and speed of omnichannel delivery.
Conclusion
As the retail landscape continues to evolve, retailers must find new ways to stay relevant and meet the needs of customers. By integrating their offline and online channels into a seamless omnichannel experience, retailers can leverage their physical stores as a strategic asset and provide customers with more personalized and convenient shopping options. To do this, retailers must use data and analytics to understand customer behaviour and preferences, leverage technology to enhance the in-store experience, and optimize store layout and merchandising to drive sales and improve customer loyalty. By taking these steps, retailers can unlock the full potential of their physical stores and succeed in an omnichannel world.
Seeplus by Inovretail can help retailers effectively leverage their physical stores as a strategic asset in omnichannel retail by providing a comprehensive retail management system that includes data analytics, inventory management, and supply chain management. This can help retailers improve the speed and convenience of omnichannel delivery, meet the changing needs of their customers, and remain competitive in today's market.