How the retail landscape has changed in the past five years
Retail, as we grown to recognize it, might not exist in the near future. This isn’t another retail doom warning. On the contrary, it’s about how the retail and e-commerce space is fast evolving. And why is this happening? The primary driving point for this change is a clear focus on creating the perfect experience for the customer.
Retail and e-commerce merging with each other
Let’s look into what’s thinning the line between online and offline retail. Growing internet penetration in Southeast Asia and India has opened up a whole new, previously untapped, market. Customers now have more dispensable income than before and have more refined needs. It’s no longer about receiving a product. It’s also about how and when the product is delivered. Retail and e-commerce players must give convenience wrapped in a neat delivery experience.
You must have heard the word ‘omnichannel’ thrown around. What does it mean? It’s not just multi-platform selling. It’s a combined customer experience, giving multiple choices to the customer about how they want to engage with the brand. If they want to come in to store to evaluate the product and then make their buying decision from the comfort of their homes, traveling in their car, sitting with friends, etc., they can do it. An easy and fast shopping experience surrounds them, should they choose to access it. It’s up to the retail and e-commerce brands then to put the product in the hands of the customer after its bought.
‘New Retail’: This future of retail has already arrived
The concept of ‘new retail’ is catching up in major markets, being promoted by Jack Ma. Customers can just come into the store, scan the barcode of the items they want, and it would be delivered to their home within 30 mins flat (around a 3 km radius). Retail outlets here double up as distribution centers (DC). Even without making a pseudo-DC, retailers can give the customers the option to scan the barcode and have the items sent to them through the nearest hub (to their home).
This is possible on the back of high internet penetration and data consumption across all types of customers. Retail and e-commerce players can leverage deep analytics to stock items that the customers actually want, eliminating stock-out instances. With technology, all points where the customer might be dissatisfied are ruled out.
Customer-centric logistics movement
One of the challenges that almost demands tech-intervention is handling of the increasing goods or package movement volume. The boom in e-commerce and the reemergence of retail has pushed the total amount of orders to be delivered in a day. This has grown almost by 50% to what it was back in 2012. This has put pressure on the available vehicle capacity and delivery associates to actually fulfill all these orders.
The brands (consumer packaged goods companies) can’t afford delays in their shipments reaching DCs and retail outlets. This would push the lead times up, making it tough to put the product in the hands of the customer at the right time. Further, retail and e-commerce players can’t afford delays in their last mile movement. Customers want deliveries fast (within a day) and on-time.
A recent study at LogiNext indicated that customers were more inclined (36%) to buy products when they are given exact timelines (ETAs) when it would be delivered. This brings in new customers and when the company makes the deliveries at the time promised, the customers are more likely (43%) to buy again from the company.
These numbers are exciting but to make the most of them, companies must solve the high delivery volume problem. As pointed out before, proper tech-intervention with delivery schedule and route planning can solve this.
Predictive analytics and interactive mapping interface
Predictive analytics help companies know exactly how many vehicles and delivery associates they would need to fulfill incoming volume. Interactive mapping systems built within these logistics optimization systems direct on-ground associates through traffic-light routes to cut down on delays. This is one of the biggest positives to come from the tech gateway. Planning and delivery movement can be directed and tracked right from an interactive map. You might have seen this as a customer when you order groceries and food, even packages from top online platforms. This would become the norm within a year.
The idea is simple, give a complete and well-rounded delivery experience to the customer and they will stay with you for a far longer time. Optimized logistics management has become a key differentiator and core business strength for many of these retail and e-commerce players. The retail landscape would further change in the next five years, but the direction of evolution has been defined, and it’s evolving fast.