Month: June 2023

Categories
Smart Merchandising

What are the new-age eyewear merchandising challenges and how to overcome them

Just as a pair of glasses can help you see more clearly, the proper lens on the merchandising landscape can bring clarity to the retail industry’s merchandising challenges. One significant game-changer in the eyewear sector is Warby Parker, which has revolutionized the way people buy glasses. 

By offering the convenience of ordering from home and trying up to five lenses at home, they have provided customers with the freedom to explore different options. Additionally, their innovative approach allows shoppers to seek a second opinion on their eyewear choices, addressing a common need. 

On the same scale of innovation, Lenskart has a 3D trial option to make shopping more convenient. They are the experts in providing seamless omnichannel, pioneers in the online retail world, and aceing manufacturing their own products. Indian eyewear market revenue is predicted to reach $5.58 billion by 2023. The market is expected to grow by 8.19% annually between 2023 and 2027, representing a compounded annual growth rate (CAGR). However, the optical industry still faces hurdles in effectively managing inventory and distribution processes.

What are the common merchandising challenges faced by the eyewear industry?

The retail eyewear industry, a hub of innovation and style, currently finds itself squinting at a daunting array of challenges. In the branded optical industry, the primary roadblock is grabbing the market share in India since the majority of the market is owned by unorganized eyewear vendors. There is extreme lead time due to the lack of manufacturers in India. Some of the other eyewear merchandising challenges are:

  1. Replenishing JIT styles: Replenishing Just In Time (JIT) styles in the retail optical industry is problematic mainly because of inventory management challenges and a lack of diverse geographic distribution networks. These factors make it difficult to align production and demand accurately. Hence, brands struggle to merchandise i.e., maintain a wide variety of styles and ensure timely replenishment, making it challenging to implement the JIT model in the eyewear industry.
  2. Replenishment of pack sizes: Ordering the wrong pack sizes can lead to excess inventory of certain styles and inadequate stock of others. Additionally, eyewear retailers often have limited shelf space and need to optimize their inventory levels to maximize display options. 
    Ordering pack sizes that are too large can result in overcrowded displays and hinder customer browsing. On the other hand, ordering pack sizes that are too small may lead to frequent stockouts and missed sales opportunities. Balancing replenishment with demand, available shelf space, and customer preferences is crucial for effective inventory management in the retail eyewear industry.
  1. Replenishment with dynamic minimum base quantity (MBQ): MBQ represents the minimum amount of inventory that needs to be maintained to ensure availability for customers. Setting the MBQ too high leads to excess inventory of specific styles, tying up capital and storage space. On the other hand, if the minimum base quantity is set too low, it can result in frequent stockouts, disappointing customers, and potentially losing sales. 
    Striking the right balance requires accurate demand forecasting, understanding customer preferences, and closely monitoring inventory levels. MBQ is also vital to ensure the correct mix of products is available on the shop floor.
  1. Challenges of style depth: With a mix of Over the counter and Just In Time models at the same stores, the precision of depth of a style at store becomes important; this often demands a close look at the demand each day and a proven forecasting model individual to each brand. Without automating the size sets and maximum stock coverage to be set for each store style, sales opportunity loss is inevitable.
  2. Ensuring 100% core product availability in stores: Maintaining a comprehensive inventory of core products is an essential part of merchandising. It typically includes popular frame styles and essential lens options and requires significant space and financial investment. Limited shelf space may restrict the ability to stock all core products simultaneously, leading to potential stockouts and disappointed customers.
  3. Identifying the most suitable replacement: Identifying and filling store gaps, as well as stockouts of specific styles at both stores and warehouses, is crucial. This involves selecting the most appropriate and unique styles that complement the existing assortment and meet customer demand. To achieve this effectively, a data-driven approach is necessary for determining the optimal size sets and maximum stock coverage. Considering the dynamic nature of the minimum base quantity (MBQ) and the inconsistent demand patterns at stores becomes essential.
  4. Improper identification of NOOS, top sellers, and bottom sellers: Failure to accurately identify these items can result in frequent stockouts, leading to dissatisfied customers, lost sales opportunities, and imbalanced inventory management. Inaccurate reordering decisions led by wrong identification of NOOS, leading to overstocking or understocking certain styles, can result in increased carrying costs, tied-up capital, and missed sales. 
    Additionally, inaccurate reporting and data analysis hinders the ability to make informed business decisions, impacting forecasting accuracy, inventory optimization, and overall operational efficiency. Proper identification, precise reordering, and reliable reporting are critical for maintaining optimal inventory levels, meeting customer demands, and maximizing profitability in the retail eyewear industry.
  1. Pullbacks: During stock pullbacks, it is crucial to maintain a minimum percentage (e.g., 80%) of the minimum base quantity (MBQ) to ensure the store remains operational and functional. By retaining this minimum threshold of the store capacity, sufficient inventory is available to meet customer demands and provide a satisfactory shopping experience. Striking a balance between clearing out slow-moving stock and preserving a core level of inventory ensures both efficiency and customer satisfaction in the retail environment.
  2. Warehouse reservations: Maintaining a reserve of stock at the warehouse for new and fast-moving styles is crucial for brands to meet the continuous demand. Not planning a warehouse reservation can lead to a large presence of the product at all stores, followed by a sudden depletion. This might cause customers to encounter out-of-stock items, undermining their trust in the brand’s ability to meet their needs consistently. 
    Additionally, the absence of reservation systems can lead to inventory imbalances for their online sales and certain channels or customers consistently facing limited availability of fast-moving products. This can create a negative perception of the brand, indicating a lack of organizational efficiency and customer-centricity.
  1. Reordering: Reordering in the retail optical industry takes into account several factors, including larger lead times, expansion, and online inventory. With a larger lead time, retailers need to anticipate future demand and adjust their reordering strategies accordingly to ensure a continuous supply. 
    Expanding businesses require careful assessment of inventory needs and potential adjustments in reordering quantities to support the growing business. Moreover, the rise of online sales necessitates maintaining an adequate online inventory to fulfill customer orders promptly.
Let us now take a look at some of our clients and how they won over their problems.

When you’re a company as expansive as Lenskart, handling a huge number of stores isn’t just a walk in the park. Not only are their stores vast in number, but their replenishment needs are daily and dynamic, adjusting for new style upgrades, customer demand, and even unique JIT styles. They face challenges in automating their processes, handling MBQ, ensuring the presence of core products in all stores, and efficiently managing stock.

By introducing algorithm-based solutions from Increff, Lenskart has managed to make sure their stores always have the right stock, at the right time, in the right place. Additionally, the Merchandising Software has ensured a minimum of 80% fill rate during pullbacks and allowed efficient international warehouse replenishment. As a cherry on top, we even delivered ready-to-present dashboards for internal presentations!

And what was the impact? A whopping 12% increment in Like-to-Like revenue in 2021-2022, lesser stock at the warehouse through faster reordering processes, smarter data analysis, and Lenskart becoming the most frequent user of Merchandising Software Business Intelligence.

Similarly, CFS Vision grappled with reordering and distribution challenges. Manual errors, time-consuming processes, and improper identification of top and bottom sellers were among the main issues, but with Merchandising Software, the solution was as clear as a 20/20 vision.

Specsmakers, too, were facing distribution challenges: analyzing demand, allocating products correctly, and avoiding manual errors were significant headaches. But, with the Merchandising Software magic wand, these challenges were obliterated. Our smart merchandising offered fast and accurate allocation as per demand, ensuring that the inventory was in the right place, quantity, and depth.

The future of the eyewear industry

Algorithm-based data-driven solutions, end-to-end advanced automation, and granular data analytics are just a few of the cutting-edge technologies shaping innovation in the optical industry. As technology evolves, eyewear businesses that adapt and innovate will stay ahead of the game.

No crystal ball is needed to see that the future of the eyewear industry is bright. With Merchandising Software, companies like Lenskart, CFS Vision, and Specsmakers are overcoming their present challenges and preparing themselves for future obstacles. 

In essence, these solutions are a bit like a new pair of smart lenses for the optical industry – offering a clearer view, correcting errors, and, most importantly, helping them see the road ahead. With such advancements, it’s evident that the eyewear industry is not just looking but moving forward into the future.

Categories
Warehouse Management

​​BOPIS, ROPIS, and BORIS: Solving the pieces of the Omni Puzzle

In an era characterized by the increasing dominance of digital platforms, retail strategies have taken on new dimensions to meet evolving customer expectations. One of these is the rise of omnichannel retailing strategies, such as BOPIS (Buy Online, Pickup in Store), ROPIS (Reserve Online, Pickup in Store), and BORIS (Buy Online, Return in Store). These strategies are revolutionizing the way retailers operate, and consumers shop.

BOPIS combines the convenience of online shopping with the immediacy of brick-and-mortar stores, allowing customers to browse and buy online and then pick up their purchases in-store. Customers choose this when they are sure about the product they are buying.

ROPIS, on the other hand, provides the opportunity for customers to reserve their desired item online before heading to the store to finalize their purchase. This means the final decision of whether to buy the item or not happens in the store after trying or checking out the product.

Lastly, BORIS offers customers the option to return online purchases in-store, providing a quicker and more convenient way to process refunds or exchanges.

In this blog, we will explore these strategies in detail, delving into their importance and implementation in the fashion industry and how retailers can navigate the ‘omni puzzle’ by leveraging these models. 

BOPIS (Buy Online, Pick Up In-Store)

BOPIS is a retail strategy that fuses the convenience of e-commerce with the immediacy of traditional shopping. In the realm of fashion retail, BOPIS allows customers to browse collections, make selections, and purchase items through an online platform. Once the online transaction is complete, customers can collect their purchases from a physical store at their convenience.

This omnichannel approach offers a swift shopping experience enabling consumers to shop at their leisure from anywhere, avoiding the hassle of in-store searching or waiting for a delivery. While from a business perspective, it eliminates the shipping cost, the benefit of which is also passed to the end consumer.

The BOPIS model also enables cross-selling as it increases the footfall in the stores which leads to more impulse buying. At the same time, it reduces returns because the customers come in to pick up the product, so if it doesn’t meet their expectations, they can immediately return it, which cuts down logistics and operational costs.

Data from FitSmallBusiness suggests that the BOPIS industry is going to grow at 19.7% annually, reaching $703.2 billion by 2027.

BOPIS is often confused with BOSS (Buy online, ship-to-store), which is technically a part of BOPIS. It involves the customer purchasing online and picking up their items from the store. However, in BOSS, the purchased items are out of stock and are shipped from the warehouse to the store after the customer completes the purchase.

Overall, both these models are game changer for retail businesses as it benefits both ends of the transaction. For businesses, it increases profitability, while for customers, it is convenient and enhances satisfaction.

Luxury department store chain Nordstrom, successfully implements BOPIS model

One of the early adopters of the BOPIS model was Nordstrom, an American luxury department store chain. The company promised that customers who order online can pick up their items in-store on the same day, often within just one hour of placing the order. For even greater convenience, they offer curbside pick-up, allowing customers to stay in their vehicles while a Nordstrom employee brings their purchase to them. 

Nordstrom’s successful BOPIS implementation extends beyond just the customer-facing elements. They’ve also invested heavily in their inventory management systems to provide real-time inventory visibility across all their locations. This ensures that online customers always have an accurate view of what’s available, and store associates can quickly locate and prepare items for in-store pickup.

The result of this successful BOPIS implementation is reflected in their sales figures. The company has reported that customers who use the BOPIS service spend more and make more frequent purchases compared to other customers.

ROPIS (Reserve Online, Pick Up In-Store)

ROPIS allows customers to reserve items online before going to a physical store to finalize their purchase. It enables customers to browse and select items online from a brand’s entire catalog and ensure their chosen pieces will be waiting for them at the store. 

This model gives customers the security and flexibility of online shopping and the instant gratification of walking out of a store with their purchase. Like BOPIS, ROPIS also leads to more in-store walk-ins, allowing brands to cross-sell products and increase their overall sales. It also eliminates delivery costs, saving brands a significant amount of money.

Another major advantage of ROPIS is that customers can try on clothes before purchasing them. Since there is no guesswork associated with sizing or the feel of fabrics, it leads to higher customer satisfaction and reduces return rates. It also makes it possible for brands to offer customers a more personalized shopping experience by preparing for their arrival in advance.

Global fast-fashion brand, Zara, introduces ROPIS service to customers

Recognizing the potential of blending the digital and physical shopping experience, Zara introduced its Reserve Online, Pick up In-Store service to customers. One distinctive feature of their ROPIS model is the quick turnaround time. In many cases, reserved items can be available for pick-up in-store within a few hours of the online reservation. This is possible due to Zara’s robust and responsive inventory management system.

Zara has also ensured that the pick-up process is seamless. Some stores have automated collection points where customers can collect their reserved items by scanning a QR code, saving time and enhancing the overall customer experience.

More importantly, Zara’s ROPIS strategy has helped increase foot traffic in their physical stores. Customers who come in to try on and pick up their reserved items often end up making additional purchases. This boosts sales, increases customer value, and encourages deeper engagement with the brand and its products.

BORIS (Buy Online, Return In-Store)

BORIS allows customers to purchase products online and make returns in-store. This service combines the convenience of online shopping with a physical store’s immediate, in-person service. So, in case of immediate need, customers can visit a store and return or replace their product.

This omnichannel strategy saves business logistics costs and increases customer satisfaction by offering a quicker and more convenient return process. It also allows retailers to offer superior customer service as the store staff can handle any issues directly and help customers find alternative products if a return is due to dissatisfaction with the original purchase.

BORIS is also great from an inventory management perspective. Returns that are processed in-store can be returned to inventory more quickly, reducing the amount of stock held in warehouses.

Apparel retailer Gap allows store returns for online purchases

Gap Inc. has long offered the BORIS option across its various brands. Customers can easily return online purchases to the right physical store locations. This approach simplifies the return process for customers, saving them the time and effort of repackaging the product and shipping it back. It also gives the company a chance to save a sale by offering exchanges or finding alternative products that suit the customers needs better.

The brand has found that offering BORIS has positive effects on sales. Customers returning products in-store often browse and make additional purchases. Therefore, this strategy improved the customer experience and helped in cross-selling, creating a win-win situation for both parties.

Major challenges brands face while implementing these omnichannel strategies

The omnichannel strategies discussed in this blog are essential for retail businesses to stay relevant and not fall behind the competition. However, it is not easy for brands to implement them. The biggest challenge is training the staff to handle these orders and process returns efficiently.

Brands also often lack the necessary technology to determine which inventory should be made available online. This leads to a situation where products not selling online remain stuck in physical stores while fast-selling items frequently experience stockouts and size cuts. Controlling the variety of products also becomes challenging, as brands cannot stock every item in their stores while exposing the entire inventory online.

Plus, the incentive for stores to prioritize online sales is also limited. Selling on online platforms from physical stores requires brands to bear the operating costs of the stores in addition to the sales channel margins. This combination often makes it economically unfeasible for brands to sell online directly from their stores.

Best practices for adopting BOPIS, ROPIS & BORIS in fashion retail

Considering the immense benefits of these omnichannel models, it is crucial that businesses start incorporating them into their retail operations. Here are some best practices that will you help you along the way.

1) Robust inventory management: It is crucial to have a real-time, accurate inventory management system. For this, businesses need a simple tool that can manage their inventory efficiently, like Increff O2O (Offline to Online). It will also allow customers to see what items are available at their local store when shopping online, preventing the problem of selling items online that are out of stock in the store.

2) Communication: Once an order is placed, keep the customer informed about when and where they can pick up their order by providing regular updates about their order status through email or text messages.

3) Designated pickup areas: Have specific areas in your store for BOPIS, ROPIS & BORIS. These areas should be clearly marked and easily accessible where customers can swiftly collect their items. If possible, consider curbside pickup options for even more convenience.

4) Speed and efficiency: One of the main attractions of these omnichannel models for customers is the promise of convenience and speed. Strive to have orders ready for pickup or process returns as quickly as possible and aim for a seamless and efficient process that enhances the customer experience.

5) Cross-selling and upselling: Use the in-store pickup opportunity to cross-sell or upsell additional items. Consider special in-store offers or personal shopping assistance to encourage further purchases during pickup.

6) Easy returns: It is crucial to provide an easy return process. Since customers are coming to the store to pick up items, make the return process possible in-store as well, which is essential for implementing BORIS.

7) Leverage data: It’s important to track and analyze data. Understand your customers, what they’re shopping online. This data can help improve your marketing strategies, enhance the customer experience, and cross-sell other products.

The Importance of Omnichannel Technology

Research by ThinkWithGoogle shows that omnichannel strategies drive an 80% higher rate of in-store visits. This shows that an effective omnichannel strategy is no longer optional but a necessity in the fashion industry. 

It ensures that customers receive a consistent brand experience, whether they’re shopping online or in a brick-and-mortar store. This consistency builds brand loyalty and enhances customer satisfaction.

From a retailer’s perspective, it enables them to collect and analyze data across various touchpoints, providing insights into customers’ shopping habits and preferences. Hence, businesses find it easy to offer personalized shopping experiences, enhance customer engagement, and increase sales. 

At the same time, it allows them to maintain accurate inventory records across multiple locations and platforms. This can reduce overstock and stockouts, improving operational efficiency and customer satisfaction.

If your business wants to adopt these strategies, the first step would be to have real-time inventory management and a single view of all your stock. This will ensure that customers can view and order your products seamlessly, and out-of-stock products never show up for sale. Increff O2O (Offline to Online) solution allows you to do this by bringing your stores online and exposing 100% of your inventory in all marketplaces.

All you now need to do is give customers the option to either buy/reserve their product online and pick it up from the stores instead of shipping it to them. If the product is in the warehouse, then the sale will count under the BOSS (Buy Online ship-to-store) model, and if it is already in the store, then it will fall under BOPIS or ROPIS.

Finally, to implement BORIS, you need to start processing returns at your stores. This will allow for faster processing and speed up the process of making the returned inventory online. Increff O2O solution can also assist you in the same with additional tools and features like quality checks during return processing, 100% traceability, and optimization of resale value. 

Categories
Business

Unleashing Innovation and Key Takeaways from Seamless Middle-East 2023

Event: Seamless Middle-East 2023
Location: Dubai
Date: May 23 – 24,2023

Our team was excited to be part of this year’s Seamless event, engaging with partners, prospects, and clients to discuss upcoming trends and initiatives. This blog summarizes the top four learnings from sessions, meetings, and conversations held during the event.

Four Key Takeaways and Learnings from Seamless Middle-East 2023

1. Transforming buying process with innovative omnichannel strategies

Reiner Lemmens, Group CEO of Geidea, emphasized the significant impact of adopting innovative omnichannel strategies to enhance the customer experience during the Seamless Middle-East 2023 event. His key takeaway resonated with retailers, highlighting the importance of seamlessly integrating online and offline channels to create tailored experiences for customers.

One of the key strategies discussed by Lemmens was the implementation of buy online, pick up in-store (BOPIS) services. This approach allows customers to conveniently browse and purchase products online and then pick them up at a physical store location of their choice. By offering this option, retailers can cater to customers’ preferences for speed and convenience, leveraging the advantages of both online and offline shopping.

Another strategy mentioned was click-and-collect, which enables customers to place orders online and collect them at a designated location. This method eliminates the need for traditional shipping and allows customers to retrieve their purchases at their convenience. Click-and-collect services provide customers with flexibility and control over their shopping experience, making it a valuable omnichannel strategy.

Personalized recommendations were also emphasized as a crucial aspect of innovative omnichannel strategies. By leveraging customer data and advanced analytics, retailers can offer personalized product suggestions based on individual preferences, previous purchases, and browsing behavior. This level of personalization enhances customer engagement and satisfaction, as customers feel understood and catered to by the retailer.

2. Advancing the purpose of physical retail

Kartik Bhatt, COO of Sharaf Retail, and Andrea Janjua, CEO of Metacom, highlighted the significance of transforming physical stores with creative concepts and smart technology. Their insights emphasized the need to create captivating in-store experiences that can effectively compete with the rising popularity of online shopping.

The discussion emphasized the use of technologies such as augmented reality (AR), virtual reality (VR), and interactive displays to engage customers and provide unique experiences that cannot be replicated online. By incorporating these technologies, retailers can bring a sense of innovation and interactivity to the physical retail environment.

Augmented reality (AR) can be utilized to overlay digital information on real-world objects, enabling customers to visualize products in a more immersive and interactive way. This technology can enhance the shopping experience by providing additional product information, offering virtual try-on features, or creating interactive product demonstrations.

Virtual reality (VR) offers the opportunity to transport customers into virtual showrooms or simulated environments where they can explore products in a dynamic and immersive manner. By immersing customers in virtual experiences, retailers can create a sense of excitement and novelty that traditional shopping experiences may lack.

Interactive displays provide an avenue for customer engagement within the store. These displays can feature touchscreens, interactive product demonstrations, or personalized recommendations based on customer preferences. By encouraging customers to actively participate in the shopping process, retailers can enhance customer involvement and create memorable experiences.

3. Alleviating supply chain pain points

The Seamless Middle-East 2023 event recognized the significance of addressing supply chain challenges to streamline processes and enhance customer satisfaction.

Efficient logistics and delivery play a vital role in the success of retail and e-commerce businesses. The event shed light on innovative solutions for optimizing inventory management, order fulfillment, and last-mile delivery. Attendees gained valuable insights into strategies and technologies that can alleviate supply chain pain points.

One of the key focus areas was inventory management. By leveraging advanced inventory management systems and technologies, retailers can gain real-time visibility into their inventory levels, ensuring optimal stock availability while minimizing excess inventory or stockouts. These solutions enable accurate demand forecasting, automated replenishment, and effective inventory allocation across multiple channels.

Order fulfillment was another pain point addressed at the event. Attendees learned about innovative solutions that streamline the order fulfillment process, including warehouse automation, robotics, and efficient picking and packing techniques. By optimizing these processes, businesses can reduce errors, improve order accuracy, and expedite order processing times, leading to faster delivery and enhanced customer satisfaction.

The last-mile delivery, the final leg of the supply chain, was a crucial area of discussion. Increff showcased innovative strategies for optimizing last-mile logistics, such as route optimization, delivery tracking, and efficient delivery scheduling. By implementing these solutions, retailers can enhance delivery speed, provide accurate delivery updates to customers, and ensure a seamless end-to-end delivery experience.

Addressing supply chain pain points not only improves operational efficiency but also enhances customer satisfaction. By streamlining inventory management, order fulfillment, and last-mile delivery, retailers can reduce lead times, improve order accuracy, and provide timely and reliable delivery, ultimately leading to increased customer loyalty and positive brand experiences.

4. The impact of omnichannel on e-commerce sales

The impact of omnichannel strategies on e-commerce sales was a key topic of discussion at the Seamless Middle-East 2023 event. Arsh Kabir Singh, Senior Sales Director – MENA, APAC & ANZ at Increff, shed light on how adopting an omnichannel approach can significantly boost e-commerce sales.

The key takeaway was the importance of providing a seamless customer journey across multiple channels, such as mobile apps, websites, and physical stores. By delivering a consistent and cohesive experience, businesses can capture customer loyalty and drive sales growth. A seamless omnichannel approach allows customers to start their shopping journey on one channel and seamlessly transition to another without any disruption or loss of information.

The integration of data analytics and automation tools plays a vital role in optimizing the impact of omnichannel on e-commerce sales. By leveraging customer data and utilizing analytics tools, retailers can gain insights into customer behavior, preferences, and shopping patterns. This enables businesses to personalize marketing efforts and offers, targeting customers with relevant promotions and recommendations that align with their preferences.

Automation tools further enhance the efficiency of omnichannel strategies. By automating processes such as inventory management, order processing, and customer support, retailers can ensure a smooth and seamless experience for customers. Automation minimizes errors, reduces operational costs, and allows businesses to focus on delivering exceptional customer service.

The impact of omnichannel strategies on e-commerce sales extends beyond customer experience and personalization. Retailers can capture a broader customer base and reach new markets by integrating multiple channels. This expansion of reach and accessibility increases the potential customer pool and can lead to higher sales conversions.

Final Thoughts

Seamless Middle-East 2023 in Dubai provided an enriching experience for attendees interested in the future of retail and e-commerce. The event emphasized the need for businesses to adapt to evolving customer expectations and leverage technology to create engaging experiences both online and in-store. By embracing these insights and implementing relevant strategies, retailers and e-commerce businesses can stay ahead in a competitive market and meet the ever-growing demands of modern consumers.

Categories
Smart Merchandising

5 things you need to know before setting up a phygital store

In today’s world, customers are increasingly looking for a seamless shopping experience across physical and digital channels. More flexibility leads to a better customer experience, higher sales, and increased brand loyalty; hence merging is essential. The touch and feel of physical shopping are amalgamated with the ease and habit of online shopping to provide instant gratification to shoppers. 

Brands like Amazon, 6th Street, and Rebecca Minkoff are proving to be trendsetters in this domain and have launched their phygital store across the world. Retailers who are not able to provide this experience may find themselves struggling to keep up with the competition. Retailers need valuable data insights on customer behavior, sales trends, inventory levels, and more. This will help them make better business decisions and optimize their operations for maximum efficiency and profitability. 

For example, by analyzing sales data, retailers can identify which products are selling well and which are not, allowing them to adjust their inventory levels and marketing strategies accordingly.

Let us first take a look at how phygital works.

Jane wanted to buy a leather jacket and went to a phygital store. She ordered the products she wanted to try using the touch screens in the store or the company app on her mobile device. She can touch and feel the jacket on the racks. Next, she sees if a fitting room is available and when to try the products. If Jane does not like the fit, she can order a different size of the same product. If not available in store, she can try out the size in a similar leather jacket and place an online order for her desired jacket in the correct size. There are micro fulfillment centers behind each store, with inventory selected based on that region’s style preference and size curve. This micro fulfillment center acts as a back store for not only the retail customers but also the online orders from that region. This is one of the many ways phygital will transform the shopping experience. 

Prerequisites for a phygital store

Plan your assortment effectively

The assortment is the biggest asset for any e-commerce retailer. They must plan their assortment effectively. By taking into account factors such as customer demographics, seasonal trends, market trends, and regional preferences, retailers can ensure that the right products are available in the right locations. Thus, reducing the risk of excess inventory and improving customer satisfaction. 

Group products into categories based on factors such as price, style, color, and size. This will make it easier for customers to navigate your store or website and find what they are looking for. Increff Merchandising Software helps you unify your assortment that will help you build a phygital store.

Understand the regional demand

Many brands that were operational in the Covid times as online sellers are now planning to open their physical stores since it gives them product clarity as they can touch and see the product. They have the advantage of customer pincode level demand patterns in their past years of operations.

Merchandising solutions like Increff Merchandising Software can help brands to analyze this data and mirror this online regional demand to plan inventory for the physical store. Merchandising Software can also help understand which is the best region to open a store based on data. This store can again work as a micro fulfillment center and serve both offline and online orders for which the inventory can be planned on Merchandising Software.

Avoid stockouts and overstocking

Phygital is a new concept. In order to increase sales, you may end up overstocking, but that should not be the case. By understanding data across retail sales channels brands should plan their inventory. This solves overbuying and underbuying. 

This is resolved by Merchandising software solution of Increff. You need a solution that provides real-time inventory management across all physical and online stores. This means that retailers can avoid stockouts and overstocking, which can lead to lost sales and wasted inventory. With a real-time view of inventory levels, retailers can fulfill orders faster and more accurately, improving customer satisfaction and increasing sales. These features are covered by Increff’s WMS solution.

Fulfill orders faster

Conventionally, stores were just transactional avenues, by turning stores into fulfillment centers and enabling buy-online-ship-from-store capabilities, orders can be fulfilled faster. The OMS solution can be incredibly valuable when it comes to order fulfillment. Stores will be able to manage returns effectively by means of Increff Store Fulfillment System. Increff SFS helps fulfill orders and manage returns. Just like buy online pickup in store, stores can fulfill orders placed online. This will fulfill the order in a shorter time frame.

Provide an omnichannel experience

Experiences matter to customers irrespective of the mode of shopping – online or offline. Instant gratification, convenience, and flexibility are the determining factors. By understanding the customer needs and offering what is needed through the customer’s preferred sales channel, you will be able to deliver omnichannel experiences better. Increff’s Omni solution can help retailers create a seamless shopping experience across all channels, including in-store, online, and mobile.

Retailers can leverage Increff’s solutions to create a unified shopping experience that suits the needs of modern consumers. By providing real-time inventory management, dynamic discounting, valuable data insights, and optimizing order fulfillment. Increff’s solutions can help retailers improve efficiency, increase sales, and build customer loyalty. As the retail industry continues to evolve, retailers who embrace phygital retail and implement solutions like Increff’s will be best positioned for success in the future.

Embracing the phygital revolution is no longer a choice but a necessity. Customers crave a seamless blend of physical and digital experiences, and retailers must rise to the challenge. From effective assortment planning to understanding regional demand, avoiding stockouts and overstocking, fulfilling orders faster, and providing an omnichannel experience, retailers can unlock the potential of phygital stores. 

With Increff’s innovative solutions by their side, retailers can optimize inventory management, streamline order fulfillment, and gain valuable insights to stay ahead in the ever-evolving retail landscape. So, hop on the phygital bandwagon, and get ready to revolutionize the way customers shop while enjoying the sweet taste of success.

Request demo for MS and Omni now!

Categories
Business

The Future of E-commerce: Top 5 Industry Forecasts

In the dynamic sphere of commerce, the only constant changes with the continuous reshaping of business landscapes driven by the relentless pulse of technology. This is particularly evident in eCommerce, where traditional trade paradigms are swiftly replaced by innovation, thereby setting the stage for a future we could barely envision just a few years ago.

The pandemic drastically impacted the retail industry when online shopping became the new normal due to lockdowns and social distancing. Regardless of the size or sector, companies had to embrace e-commerce— consequently, the need for a robust online presence became clearer. And now, even though the world has gone back to normal, the e-commerce industry continues to grow and evolve.

A eMarketer’s Worldwide eCommerce Forecast report indicates that in 2023, e-commerce sales will contribute 20.8% of the total retail sales at $6.31 trillion. And this fraction is expected to increase on a year-on-year basis to reach 24% by 2026.

This upward trend is fueled by technological advancements, changing customer behavior and preferences, and increasing borderless trade, signifying more than just a market trend. It is an indication of a profound shift in the way businesses operate worldwide. In this article, we will explore the seismic shifts in the e-Commerce industry in 2023 and offer perspectives on how things might evolve from here. 

Riding the wave of omnichannel retailing

The COVID-19 pandemic highlighted the importance of having multiple sales channels. Companies with a strong online presence were able to continue operating despite lockdowns and social distancing measures. It pushed companies to embrace omnichannel retailing and cater to changing customer behavior.

The lines between online and offline retail are blurring everyday and brands that don’t still have an onmnichannl presence will fall behind. A report by Forrester predicts that by 2027, 70% of US retail sales will be influenced by digital touchpoints. This trend is driven by consumers’ desire for flexibility, convenience, and personalized experiences. They want the ability to shop anywhere, anytime, and through any medium—online, in-store, or mobile apps.

So, omnichannel retailing presents an extraordinary opportunity for businesses. By integrating multiple sales channels—physical stores, online platforms, social media, and mobile apps—we can provide customers with a unified, seamless shopping experience. This integrated approach helps in customer acquisition and retention and allows us to understand customer behavior across all channels, leading to more targeted marketing and enhanced personalization.

However, realizing an effective omnichannel strategy is no small feat. It requires a deep understanding of the customer’s journey across multiple touchpoints. We must strive to provide a consistent brand experience across all channels, ensuring that the transition from one channel to another is smooth and effortless.

Leveraging data is a crucial aspect of successful omnichannel retailing. With a unified view of customer data, we can create personalized shopping experiences, accurately predict future purchasing behaviors, and streamline inventory management. As we continue to navigate the evolving landscape of eCommerce, embracing omnichannel retailing is not just an option—it is a strategic imperative.

Navigating the evolution of supply chain and logistics

According to Allied Market Research, the global logistics market is projected to reach $12.975 trillion by 2027. As eCommerce continues its explosive growth, the demand for more efficient, transparent, and flexible logistics operations is intensifying. This stands even more true with the ecommerce industry growing at a staggering pace.

Supply chains are becoming more complex as companies expand their reach to cater to a global customer base. The need for real-time visibility, traceability, and predictive capabilities in supply chain management is more critical than ever. Technologies like the Internet of Things (IoT), blockchain, and AI are no longer optional add-ons but essential tools for enhancing operational efficiency, managing risks, and delivering the exceptional service that today’s consumers demand.

In particular, the importance of last-mile delivery in eCommerce logistics is becoming increasingly prominent. According to Business Wire, the global last-mile delivery market size is projected to grow by $143.75 billion between 2022-26. 

So, we need to consider strategies for optimizing last-mile delivery, such as investing in advanced routing technologies, crowd-sourcing delivery, or leveraging local brick-and-mortar stores as distribution hubs. The goal is to ensure speedy, cost-effective delivery while minimizing the environmental impact.

Yet, the most important realization we need to make is that supply chains and logistics operations are no longer mere back-end functions. They are crucial components of the customer experience, directly influencing customer satisfaction and loyalty. Late or inaccurate deliveries can quickly erode customer trust, underscoring the need for impeccable logistics operations.

The transformative power of AI and ML

Artificial Intelligence and Machine Learning are enabling personalization at a scale that was inconceivable in the past. For instance, AI algorithms can analyze vast customer data and uncover hidden patterns, growth rates and insights about individual shopping behaviors, preferences, and habits.  

This granularity of understanding facilitates the delivery of highly personalized and contextual marketing to our customers, thereby enhancing their shopping experience and boosting customer loyalty. Furthermore, AI-powered predictive analytics is revolutionizing our forecasting and inventory management approach. 

By analyzing historical data, predicting trends, and identifying patterns, these tools allow us to anticipate customer demand with greater accuracy, reduce excess inventory, and optimize supply chain efficiency. This represents not just a leap in operational efficiency but also a significant cost saving, which can be redirected toward other growth-enabling activities.

Another area where AI is making its mark is in customer service. As AI-powered chatbots and virtual assistants become increasingly sophisticated, we can automate routine interactions. This enables our human customer service representatives to focus their attention on more complex, value-adding tasks, thus improving overall customer satisfaction.

As we look ahead, the integration of AI and ML into the eCommerce market will only deepen. The potential applications are vast, from visual search and voice recognition to augmented reality shopping experiences. The challenge for us, as business leaders, lies not in merely adopting these technologies but in harnessing their potential in a way that aligns with our strategic objectives and enhances the value we deliver to our customers.

Harnessing the power of big data and analytics in eCommerce

The ever-growing capabilities of big data and analytics have irrefutably shaped how financial leaders view the eCommerce industry. The significance of data in today’s digital age extends beyond simple quantification. It has evolved into a robust tool capable of providing unique insights, predicting trends, and guiding strategic financial decisions.

According to a report from IDC, the global data sphere will grow to 175 zettabytes by 2025, and a significant fraction of this data is poised to come from eCommerce platforms. The complexity and volume of this data necessitate advanced analytics to understand the subtleties and make data-driven decisions.

Big data and analytics are fundamental to understanding consumer behavior. Through data analysis, we can uncover customer preferences and shopping habits patterns, allowing for more targeted marketing and better product recommendations. This increased level of personalization directly correlates with increased customer engagement and sales, thereby optimizing the return on our marketing spend.

From a financial perspective, the real power of big data lies in its ability to enhance decision-making. For instance, during the COVID-19 pandemic, many companies used big data analytics to predict shifts in consumer behavior and adapt their strategies accordingly, a move that helped mitigate the crisis’s financial impact.

However, with the power of data comes the responsibility to protect it. A 2022 study by IBM estimates the average cost of a data breach to be $4.35 million. Consequently, investing in robust data security systems and practices is an ethical and financial obligation. As financial stewards, we must balance the potential of big data with the necessity of ensuring data privacy and protection.

Big data and analytics provide the key to unlocking customer insights, driving financial decision-making, and, ultimately, fostering business growth. However, while exploiting the potential of data, we must remain ever-vigilant on the critical necessity of data security, maintaining the delicate equilibrium between exploration and protection.

Incorporating sustainability into this new business paradigm

With the tides of consumer sentiment shifting towards environmentally conscious and ethically responsible products, companies recognize that sustainability is no longer a mere add-on; it’s a key differentiator that can greatly influence business success. 

A study by NYU Stern’s Center for Sustainable Business reveals that 50% of the growth in consumer packaged goods (CPGs) from 2013 to 2018 came from sustainability-marketed products. Furthermore, according to a 2020 survey by IBM, nearly six in ten consumers surveyed are willing to change their shopping habits to reduce environmental impact.

But it’s not just about consumer preferences. Leaders have the responsibility to minimize the environmental footprint of business operations. Within eCommerce, it touches every aspect of the business—from sourcing and packaging to logistics and waste management. 

For instance, adopting sustainable packaging, optimizing logistics to reduce carbon emissions, and investing in circular economy models are ways we can reduce the environmental impact of our businesses.

Pursuing sustainability also makes financial sense. Energy-efficient operations, waste reduction, and streamlined supply chains reduce carbon footprint and can lead to substantial cost savings. Furthermore, companies that demonstrate a commitment to sustainability often attract socially conscious investors, enhancing their reputation and financial stability.

Yes, incorporating sustainability within the eCommerce framework presents its own challenges, such as managing costs and ensuring supply chain resilience. But the rewards—customer loyalty, operational efficiency, and long-term financial viability—far outweigh these roadblocks.

Steering eCommerce into the future

As we stand on the brink of this exciting new era in eCommerce, we are faced with an extraordinary challenge and opportunity. The challenge lies in navigating an increasingly complex landscape marked by rapidly evolving technologies, shifting consumer behaviors, and growing societal and environmental responsibilities. Conversely, the opportunity is in our ability to leverage these changes to drive business growth, innovation, and societal impact.

In the face of this change, the role of a leader is not merely to react but to anticipate, adapt, and innovate. Our responsibility extends beyond steering our organizations toward financial success; we must also contribute to shaping an eCommerce landscape that is efficient, sustainable, and customer-centric.