Store profitability is falling, that’s not in dispute. In the face of currency exchange costs, rent and rates, workplace compliance and online shopping, stores are simply not generating the margins they once did.
But, there are a number of things that most retailers can do to boost profitability without worrying about the cutting edge implied by AI, personalisation, POS-free checkout or magic mirrors. These technologies are foundation stones for innovation, but all deliver value on their own account.
The business case for counting footfall is as old as the hills but with store traffic falling, it’s more compelling than ever. Retailers need to boost AOV and conversion by ensuring they can match traffic to staffing, and start to add richer footfall insight through in store devices so they can manage journeys, layouts, assortments and promotions.
Not AI, that’s for later, but right now using software bots to analyse processes and workflows that can then be executed more quickly and accurately than humans can. The ideal scenarios are almost endless but grocers can start with replenishment and trade promotions, while fashion retailers can look at pricing and promotions.
The network that handles both store and customer traffic needs to be robust, broad and secure. Most are not and many retailers still think that domestic-standard broadband is good enough. Discouraging customers from going online in store will simply turn them away. Imagine a group of girls coming into store for a makeover and then not being able to upload group pictures to Instagram. Doesn’t bear thinking about.
The one community that has been overlooked in retail for so many years can now be regarded as the single most important, because they are the people who will give the service that gets consumers into stores and buying. Systems need to schedule staff to suit their own increasingly individualistic needs as well motivate them to sell better into the opportunities thrown up by footfall counting.
Most data flowing into stores today is compliance – merchandising, pricing, promotions, health and safety. And there is limited oversight to ensure that the work gets done well or at all. Gamifying tasks through apps on staff’s own phones is a simple and compelling way to encourage compliance and a robust trail is provided by both ticks and photographic evidence.
Returns are treated as distressed stock which either makes it back eventually into the supply chain, is sold to third party aggregators or dumped. Retailers with single view of stock across all channels should be looking to get returned stock available for sale immediately. There is a lot of work to be done here because it depends on front line operations and supply chain working together more dynamically, but with the volume of returns rising, this is a profit issue.
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