By Glen Ceniza, JDA Software
We are already seeing a blurring between the retail store and the distribution center, as stores are increasingly used to fulfill online orders. Some stores will become “experience zones” meant to satisfy customers who are physically present. Others will house more inventory, designed with fulfillment and proximity for distribution in mind. How will the retail supply chain evolve over the next decade to reflect, and capitalize on, the changing industry?
High Touch Vs. Low Touch In An Omni-channel World
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Two future retail shopping experiences could take shape as the store continues to evolve. “High-touch” retail is a traditional shopping environment, a hands-on, assisted selling experience. If a consumer is looking for the latest fashion, they walk into a specialty apparel store expecting an assisted shopping experience with skilled sales associates who are experts in style, color and sizing.
On the other end of the spectrum is “low-touch” retail, like a typical grocery store. While successful grocers execute great customer service, the amount of invested, one-on-one selling to the consumer is significantly lower since shoppers typically engage in more self-service shopping.
As the industry evolves, it is important for retailers to understand how they can best support the individual needs of customers and their expectations for the best shopping experience.
Delivering A Seamless Experience – High-Touch Experience
Recognizing the needs of tech-savvy Millennials and Gen Z, the high-touch retail shopping experience will become a seamless convergence of digital and physical worlds.
Here is a look at what a high-end fashion shopping experience may look like in the future. It will start with digital brand awareness and initial merchandise selection, meaning consumers’ first interaction with a retail brand will be through online browsing or social ratings. They will digitally make their initial evaluation and selection of merchandise, and be allowed to save this information digitally.
A great assisted selling experience will incentivize the consumer to opt-in to a store visit. Consumers will schedule their visit and the store will know when they arrive via IoT signaling. Their merchandise will be saved in the store — and may be staged in the fitting room, complete with accessories. Human associates, remote virtual associates, self-service kiosks and even social feedback mechanisms will be ready in-store to assist with the fitting and selection process.
The financial transaction will be purely digital. The consumer will have the option to take in-stock merchandise with them or have it delivered to their home later. IoRT (Internet of Robotic Things) technology will streamline the entire last-mile fulfillment process — from automated picking to loading delivery vehicles and even driving those vehicles.
In the future, the customer service experience will extend beyond the sales transaction. If the customer decides they do not like the merchandise, they can elect to return it through an online means. Via IoRT, the retailer will signal that the merchandise should be picked up on the next home-delivery route.
Increasing Efficiency Via Automation – Low-Touch Experience
On the other end of the retail shopping spectrum is low-touch, where consumers will not seek selling assistance in the store. Grocery is one of the fastest-moving segments of retail — and has one of the most difficult fulfillment models due to the perishability and temperature demands of many products.
This makes click-and-collect sales models very challenging, as grocery retailers must manage a huge number of SKUs spread out over a vast store layout. However, even in this challenging environment, we predict that there will be significant technological advancements to streamline this in the next decade. The grocery store provides a good model for postulating how the future shopping experience could evolve from low-touch to “zero touch” via advanced technology.
The consumer will select a preferred grocery retailer and opt-in for automated replenishment. In their digital profile, they will define rules that govern the brands they want, their payment method and delivery preferences.
IoT sensors within refrigerators will sense when core products, like eggs, milk or cheese, reach minimum levels. Hub IoT signaling within the home will communicate with the retail store to generate an order automatically.
Store-based IoRT systems will receive the customer order via IoT signaling. Robotics will automate the entire fulfillment process within the store or distribution center. Hundreds or thousands of customer orders will be task-interleaved for efficient automated picking, sorting and customer staging.
For fulfillment, IoRT systems will manage physical delivery, using self-driving cars and perhaps even drones. Last-mile delivery to consumers will be executed via a number of options, including pilotless IoRT fleet trucks owned by the retailer, driverless IoRT cars owned by the consumer or third-party carriers who are IoRT-enabled.
Personalizing Retail Experiences
Whether retailers leverage high- or low-touch methods, customers are expecting a level of personalization never seen before. By planning for customizable hyper-fulfillment, no matter their industry segment, retailers will provide the right level of experience based on the needs of the individual shopper.