When it comes to shopping, consumers have more power than ever before. They’re shaping retail buying experiences and increasingly want the ability to buy anything, from anywhere, at any time. They expect seamless, multichannel experiences, simple payment processes, fast delivery, and easy returns.
This year, the retail industry reached a tipping point. On Black Friday, online sales surpassed $3 billion and Black Friday became the first day in retail history to drive over $1 billion in mobile revenue. ECommerce and multichannel customer experiences are no longer just trends; they are essential for sustainable retail growth.
The New Retail Reality
This is the new retail reality, and it leaves room for brands to either struggle or soar. Some brands will let this environment be a barrier to growth while others will leverage it as an opportunity. The brands who refuse to adapt will fail and the brands that focus on implementing processes and strategies to meet these evolving customer demands will succeed.
Take Ralph Lauren, for example. While Ralph Lauren remains a strong brand, it has failed to react quickly enough to the consumer choice economy. Over the past two years, their sales have plateaued and profits have declined by 50 percent. As a result, the 50-year-old iconic brand is closing about 10% of its stores and eliminating 1,000 jobs. And they’re not alone. There are countless examples of brands that were thriving on the traditional retail model that have begun to decline with the rise of online, mobile, and social commerce.
But, for every brand falling behind, there’s a door opening for newer, more tech- and customer-forward brands to excel. Take LA streetwear brand Young & Reckless, for example. After launching in 2009, they quickly grew into a national brand with celebrity endorsements, distribution in over 3,000 retail stores, and $31 million in revenue last year. They’ve expanded into new brands and new channels and their growth shows no signs of slowing down. So, what is at the core of this shift? What do brands like Young & Reckless understand that behemoths like Ralph Lauren don’t?
How to Get Ahead
Smaller, tech-forward brands understand that how well they manage their inventory and operations directly impacts their customers’ happiness. The ability to have the product(s) your customer want, when they want it, where they want it, and how quickly they want it, can make or break your customer experience and, ultimately, your growth.
The more complex a retailer’s operations become—and you can bet they’re complex for a brand as large as Ralph Lauren—the more siloed, out-of-control, and inefficient they can become. While this is exacerbated by growing pains, brands are thinking ahead and finding solutions to scale with them as they grow in reputation and sales.
When businesses start to grow rapidly, their inventory often becomes less accurate, which can lead to costly issues. Adopting a flexible and scalable inventory and operations solution to accurately track and manage increasing order volume across all sales channels can help brands automate and optimize their inventory.
In order to compete in this new retail reality, brands must unshackle themselves from antiquated systems and processes that perpetuate inefficiencies. Inventory is your most important asset, and managing it well is the difference between your business’ success or failure.
In addition to managing your inventory, you’ll need to optimize other key functions of your business like where and how you sell your products as well as how you fulfill orders.
Our new guide, How to Grow Your Business in a Consumer Choice Economy, talks about how to take control of planning, sales channel optimization, and fulfillment so the backend of your business is setup for consistency. By making these processes more streamlined and efficient, you can make sure customers get what they want when they’re expecting it, and better your chances at attaining increased customer loyalty.