Navigating today’s tumultuous retail landscape, defined by rising costs, persistent supply chain disruptions, and relentless competition, is no small feat. Retailers, large and small, are grappling with the daunting challenge of maintaining profitability amidst an array of economic uncertainties. Yet, in the face of adversity, innovation thrives. The solution to these challenges lies in both strategic cost-cutting measures and savvy technological investments, implementing a unified commerce strategy that reduces costs while improving the customer experience.
The AGC Sector Insights report on Retail & eCommerce Technology sheds light on several tactics retailers are deploying to streamline their operations:
- Technology at the Forefront: Automation is proving to be a game-changer for retailers. Retail giants like Amazon are heavily investing in automation to elevate efficiency within their warehouses and distribution centers. For example, Amazon uses robots to pick and pack products, which has helped them to reduce costs and improve efficiency. Additionally, Amazon is using artificial intelligence to power its recommendation engine, which helps customers to find the products they are looking for more easily. As a result of these investments, Amazon has been able to grow its business rapidly and become one of the most successful retailers in the world. Other retailers can also incorporate automation strategies as part of a unified commerce solution, for example, by empowering sales associates with robust, AI-driven clienteling recommendations and a 360-degree view of the customer’s journey across brick-and-mortar and ecommerce channels.
- Supplier Negotiations: Large companies like Walmart are using their power to renegotiate terms with suppliers to get better prices. They are also successfully reducing operational costs by consolidating their supply chains. This means that they are buying more products from fewer suppliers, which can help them to get lower prices. Additionally, they are often able to get better deals by negotiating longer-term contracts with suppliers. This can help them to reduce their costs even further. This is having a significant impact on the retail industry, as suppliers are being forced to lower their prices in order to keep doing business with these large companies. Smaller retailers with an appropriate understanding of their needs can also have success in this arena, as long as they have a system that gives them complete understanding of their existing supply chain as well as robust forecasting.
- Redefining Physical Footprints: In recent years, there has been a trend of retailers closing unprofitable stores. This is due to a number of factors, including the rise of online shopping, the increasing cost of rent, and the changing needs of consumers. By closing unprofitable stores, retailers can reduce their costs and focus their resources on their most successful locations. In addition to closing stores, retailers are also reducing their inventory levels. This is done by ordering less merchandise due to improved understanding of customer preferences, selling off excess inventory, and improving their supply chain management. By reducing their inventory levels, retailers can save money on storage costs and avoid having to mark down products that are not selling. This is a true differentiator for unified commerce platforms – the ability to view all available inventory and ship to a customer from anywhere, including a larger store.
- Investing in Customer Experience: Whether or not they’ve reduced their physical footprint, successful retailers will ensure that cutting costs never comes at the expense of customer experience. As an example, Target’s investment in new technologies, such as curbside pickup, is a testament to this. By leveraging such technologies, they are not only enhancing the customer journey but also driving down associated costs. Curbside pickup allows customers to order items online and pick them up at their car, which can save time and hassle. These technologies can also help to reduce labor costs, as fewer employees are needed to staff checkout lanes and stock shelves. Similarly, retailers of all types have implemented unified commerce technologies like the ability for customers to buy online and pick up in store (BOPIS), whether that pickup is curbside or in-store with a sales associate.
The current economic climate may bring challenges for retailers, but it also presents an opportunity to innovate and invest in solutions that will benefit them long-term. One such solution is a global, mobile POS system, which can help retailers offer a consistent shopping experience across different regions and sales channels and facilitate interactions anywhere in store for their sales associates. This can streamline operational complexities and foster brand loyalty. Unified commerce solutions can further amplify these improvements by integrating product availability and customer preferences from different sales channels, ensuring that customers have a seamless shopping experience, be it online, in-store, or via mobile.
Want to learn more about our approach to unified commerce at XY Retail and how we help luxury retailers innovate? Contact us to get a demo.