Retailers Can Learn Valuable Lessons from the World’s Tallest Skyscrapers
When visiting New York or another major city for the first time, the number and size of all the skyscrapers are without question one of the most notable elements. The term skyscraper literally means to erase or block out the sky. These are massive buildings by any account. Undoubtedly, skyscrapers are an impressive feat of modern engineering. However, they wouldn’t be possible without a strong foundation.
Like skyscrapers, retail businesses must also be built on a strong foundation in order to stand firm against the elements. We aren’t talking about physical buildings in this sense, but rather the right solutions which empower retailers to make profitable decisions. In other words, we are talking about the foundation of a profitable supply chain: a profitable demand planning solution.
In 2019, a lot of the retail spotlight was focused on BOPIS, Buy Online Pick Up In Store. Brick and Mortar retailers rushed to attract the latest trend of shoppers who wanted to save time and shipping costs by purchasing items ahead of time online and picking it up in store. Retailers loved how it was driving foot traffic to their stores, often leading to additional purchases once they were on site. Now, enter 2020 and COVID-19; another wrench is thrown into the retail industry. Retailers who were hesitant to implement BOPIS are now forced to offer the option or risk losing sales. 2020 not only highlighted the importance of BOPIS, but it also introduced a sister option: BOPAC, Buy Online Pick Up At Curb. According to a recent study, curbside orders have increased by 208% during the pandemic, and 59% of customers say they are more likely to continue curbside pickup after the pandemic.
In a time of record-breaking online sales, now is the perfect time to evaluate online retail sales strategies. However, online shopping is obviously not new and certain customer expectations must be met. If your online retail store isn’t measuring up to expectations, online consumers will shop elsewhere for the products they want. Here are three ways you can increase profits from your online sales.
Online shopping has grown steadily over the past few years. One study found that “online sales grew by 15.1 percent in 2019 and accounted for 51.1 percent of all retail growth last year.” This year, more consumers than ever have shifted to online shopping as part of their regular routine. According to a recent report, “42 percent of consumers are using digital channels to engage in activities more often than they did before.” The U.S. Census Bureau also reported first quarter eCommerce sales to be up 2.4 percent ($160.3 billion) from the fourth quarter of 2019.
Machine Learning Empowers C-stores to Predict Consumer Behavior and Increase Profit
The current c-store customer journey is much more complex than in years past, but it is also more important than ever before. Figuring out what customers want is a never-ending process because customer demand and expectations change. This is especially true during periods of rapid environmental and economic changes when consumers are likely to adjust their purchasing behavior and spending habits (i.e. during times of economic downturn, certain CPG sales increase while others may decrease).
Increase Shopper Frequency With Greater In-Stocks
It is no secret that increasing shopper frequency and retaining customers is key to operating a successful c-store. In the last few years there have been several top c-store chains that have been able to drive more foot traffic to their stores, which then leads to increased sales and profits.
C-stores have been a staple in our communities for both local shoppers and travelers who need last-minute or everyday products. They have come very far since the early days of just offering a few snack choices and ice while being open 24/7. Today, c-stores face much greater competition than ever before.
In a previous blog post, we discussed how demand planning is crucial during a crisis. Demand planning is the stabilizing anchor in a volatile supply chain. Demand planning may sound like old technology, but it is the foundation of a profitable supply chain. However, not all solutions are created equal.
So what demand planning solution is right for you? It depends. There are a number of factors to consider before making a decision. While researching the various options, you should evaluate solution providers to see how they perform and compare the results. At a minimum, each solution provider should offer a pilot or trial so your retail company can see estimated profit improvement before making any final decisions. Once a trial is conducted using your stores’ data, you can see what actual results would be for each solution provider to determine value.
Do demand planning solutions help recover after a period of downturn?
Demand planning is a foundational function of the supply chain. Since shopper behavior seems unpredictable, should you scrap your demand planning structure? In short, no. Demand planning is the anchor in a volatile supply chain.
Even though the supply chain hasn’t kept up with the demand for every SKU, you can still leverage existing data to adjust your demand planning. Eventually, the supply chain will catch up to consumer demand. At the same time, demand spikes for high-value items will decrease. True Demand Planning not only looks at what is selling, but also what could or should have sold if the appropriate stock was on hand. [Read more…]