The news this week is that Jamie Oliver’s Restaurant Group is going into administration and to be honest when I read this headline, it really upset me. Jamie Oliver is a good British success story. He grew up working in the family restaurant before going to college and becoming a world-famous chef in his own right. He has written a number of books, had his own TV shows and on top of that has supported good causes including the campaign to get junk food off school dinner menus.
This news is not a big shock in the industry as in 2018 they had to close a number of sites through a CVA agreement. In an Interview with the Financial Times in 2018, he shared how things had gotten so bad that he had to put in £7.5m of his own cash overnight to save the immediate closure of the entire chain.
From the outside, it would appear that he has the profile, knowledge and financial clout to make a success, so are there some specific lessons to be learnt?
The restaurant industry is extremely competitive, but the trends say that this sector is not on the decline, it is actually holding it’s own despite the decline of the High Street. However, the Office of National Statistics reported growth on the High Street as recent as March 2019 and eating out remains a preferable option to many people.
The first thing to remember is that we should never forget to do the basics right; If you are a restaurant, then you need to ensure that you serve great food and give your guests a great overall experience. Online feedback talks about mixed quality and mixed service. Whilst you can create something great in a single location, it is often difficult to replicate it. Sometimes trying to grow too fast is a cause of failure, it means you end up diluting your brand promise. As you try and grow quickly, you may end up becoming average and losing what made you special. The right thing to do here is to invest in creating systems, processes and ways of working that would make your success repeatable.
Getting a business up and running is only part of the journey, long term success will need some evolution and changes. Successful brands like Pizza Express, Ask and Prezzo will all change their menu’s from time to time. The success in the early years, some would even describe him as being a disruptor, would be linked to his profile and approach of only using quality ingredients.
This is a common challenge; to scale without losing what made you great originally. As you scale up, you need to take on more staff, operate in different locations and the feedback is that the restaurants have become a little plainer and may have lost their original sparkle.
In recent years he had opened some premium restaurants, which effectively sat outside the Jamie Oliver brand, Barbeco and Fifteen were different from the existing chain, but both are closed. It could be that in trying to be different brands, they were losing their focus and identity. Jon Knight, CEO, Jamie Oliver Restaurant Group eluded to this point in this comment;
‘We were opening too many restaurants, too quickly, in the wrong places. We were opening in places that weren’t university towns and didn’t have enough of a tourism element.’
I hope this does not mean the end for Jamie as a restaurateur. He has a profile and he would easily be able to create digital content that would generate interest in a new restaurant. He already has the books and TV shows, so maybe it’s a case of making more use of these assets? This is a must for most businesses today and speaking to Daniel Priestly, CEO of DENT Global on this specific issue he was very clear;
‘Personal brand is a massive fire-starter; it gets things going quickly, attracts talent and customers through the door. This initial energy has to be transferred into other assets as fast as possible though.’
Jamie Oliver definitely has a person brand that is interesting, he apparently still drives a Vesper and he is a good chef. There is no reason why this should be the end of him as a restaurateur, what he has to learn to do is take advantage of that profile and integrate it more closely into his restaurants. It could be that he needs to go back to the basics, and concentrate on a single restaurant, get in the kitchen for a bit and do what he is great at. Whatever he does next, I am sure people will get behind him, he just needs to decide if he wants to have another go or not?
‘Success is not final, failure is not fatal: it is the courage to continue that counts’. Winston Churchill.
As a retailer, the success of your business depends on how well you train the people who work for you. They look to you for education and proper guidance, and if you don’t communicate effectively, they can’t perform at the level you expect.
It’s a big responsibility, and it’s not an easy task. Training staff requires careful planning and a lot of effort, not just before you actually hire someone, but also in the new hire’s first couple of months.
The new employee not only has to be educated on practical matters, but also on the culture of your brand, all done in a way that they can understand and digest in an accessible fashion. Guidelines also need to be put in place that outlines expectations, and feedback needs to be provided so they can act on your suggestions and make proper judgment calls.
Below is a guide to help get you started for successful training your retail staff.
Start Training Before You Hire a New Employee
One of the most important steps to training new employees is to document, in a very detailed fashion, all job requirements and expectations before you even start looking for someone to fill the position. It’s important that you have clear expectations and a clear job description before you begin the recruiting process, as every new hire will want to know exactly what the position entails.
Before you even hire a new employee, educate them about your brand and how you expect them to represent your business. Educate them on the big picture early by teaching them your company values and mission statement, sharing company goals with them, and letting them in about what you stand for.
Hire Trainable People With the Right Attitude
Bruce Nordstrom, of Nordstroms, once said, “We can hire nice people and teach them to sell, but we can’t hire salespeople and teach them to be nice.” What that means is that the success of your training program doesn’t just rely on how you’re educating new employees, it also depends on the inherent attitudes and core values of your staff.
You want employees that fit your company culture, and it’s much harder to try and modify someone’s attitude and default disposition than it is to train a more positive person who already shares your values and is open to your suggestions. In other words, consider hiring nice people and teaching them to sell rather than trying to retrain salespeople who are used to other methods.
Use a Mix of Training Tools and Methods
Every new employee is going to face a learning curve, but there are steps you can take to make the process run smoothly. Start by learning about that new employee — who they are, how they learn best, their motivations, etc. Knowing their preferred learning methods — and how they best retain information — will help you customize your training approach.
There are three basic leading types of learners — aural, visual, and kinesthetic. As the names suggest, aural learners retain the most information when they listen to the material, while visual learners retain the most information when they view or read it.
When it comes to kinesthetic learners, rather than talking about it, they learn best by engaging their senses and by doing. For example, you might give the new employee an opportunity to perform a product return on the register rather than simply explaining the correct procedure.
Another model that has been successfully used for retail staff training is DISC, which divides people into four distinct personality types — D, I, S, and C. The “D” people are dominant, results-oriented individuals, while “I” people are enthusiastic and motivated by incentives and recognition. “S” people are calm and steady, valuing relationships over everything else, while “C” people are more into details and highly conscientious.
Knowing what motivates each member of your staff can help you give them the information and training they need to succeed.
Continue Training Activities
Just because the training program or initial period is over doesn’t mean your new hire checklist should end. Learning and development should be a continuous process and part of your business. During the first few months, you should:
● Collaboratively set and revisit goals with new hire.
● Provide the new hire with continuous mentorship and coaching.
● Keep the lines of communication open by scheduling regular one-on-one meetings.
And don’t forget about ongoing training by providing relevant and well-timed knowledge-management tools like publications, newsletters, and technology for all your employees. Whether they’ve been there two weeks or two years, continuing education helps employees feel informed, empowered, and capable of handling any situation with confidence.
Empower Your Employees and Give Feedback
It’s necessary that new employees are educated on the guidelines and procedures put in place to ensure that there is consistency and professionalism in procedures and operations. But on the other hand, there may be some areas in your business where it’s beneficial to empower employees to use their judgment and be creative.
For example, it’s important to have step-by-step instructions when training people on how to operate your EPOS system, but employees should be given more freedom when it comes to interacting with customers. This is a time when they can let their personality shine, and rigid rules and regulations might hinder the development of the customer/employee relationship.
Going back to retail giant Nordstroms, they actually don’t have a return policy. Instead, they leave each return situation up to the employee, encouraging them to use their judgment and focus on customer satisfaction.
Of course, smaller retailers probably can’t afford to ditch their return policy. But you can look at the different areas of your business and find other ways to empower your employees, and then train your staff accordingly.
Encourage them to use their best judgment in certain situations, and then give them feedback to help them improve — even telling them how you would have handled a similar situation. The result is that they will learn how owners of the business think, better equipping them to make decisions on their own in the future.
The Bottom Line
Training new employees can be a difficult task, but it becomes easier when they’re qualified for the job and shares your company’s mission and values. By taking the time to truly understand the kind of employee you need to hire, and then giving them the training they need to perform at their best, you’re well on the path to success.
Contributor: Francesca Nicasio is Vend’s Content Marketing Manager. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and run more profitable stores. She’s also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores.
We have embraced shopping online in a big way. In fact, “big” might be considered an understatement.
With unmanaged or poorly managed returns processes, the more returns you receive, the more it effectively bogs down your system. Eventually, many of those returns will have to be sold at a discount, just to get them out of the system… These returns are eating into your profit.
With parcels being delivered to consumers every day, there are bound to be some returns. But just how many returns do e-commerce operations experience, and why? Here are a few statistics:
At least 20% of all products purchased through e-commerce channels are returned and during the holiday shopping season, that number swells to 30% or even higher—50%—for the pricier items.
Apparel is the most often returned online purchase at 43%, as 41% of shoppers buy multiple sizes or variations at one time with the intent of returning some of them.
23% of e-commerce returns are caused by a miss-pick, where the wrong item or quantity of item(s) is picked.
22% of e-commerce returns are due to the product not matching its online description.
22% of e-commerce returns are because the product received is damaged.
67% of all returned online purchases are the fault of the retailer.
48% of online shoppers report returning at least one online purchase in the past 12 months.
Reverse logistics is one of the most often overlooked elements of the complete operations cycle but it shouldn’t be. Unmanaged, uncontrolled returns processes can put tremendous strain on a facility’s available space and labour. Further, and perhaps most compelling, are the costs associated with returned inventory.
Reverse logistics isn’t just a cost of doing business. It’s a significant cost that can have an enormous impact on the bottom line. According to research by Aberdeen Group, “the top challenge facing manufacturers and retailers in regard to returns management is cost containment.” In fact, as online retailers expand their customer-friendly policies with easier options for returns—including free shipping and no restocking fees—return costs have jumped to as much as 8% of online retailer costs.
Why? Here are some more statistics:
Anywhere from 50% to 90% of e-commerce returns cannot go back into inventory for resale.
Liquidation of returned inventory that cannot be re-sold typically generates anywhere from 12% to 25% of the item’s original cost.
52% of distribution centre managers lack the ability or resources to process returns; 44% consider returns handling to be a pain point within their operations.
An estimated 10% of overall supply chain costs result from managing return/repair processes. Inefficient processes can exacerbate this cost, cutting profit by 30%.
64% of retailers have identified returns management as an area needing improvement.
At the conclusion of the 2017 holiday season, UPS anticipated processing 6 million returns in the first week of January 2018.
Companies that implement an improved reverse logistics operation to enhance the speed and efficiency of returns save roughly £230,000 in costs annually.
Companies with best-practice reverse logistics operations are 47% more likely to process returns daily.
Implementing a managed reverse logistics process can increase a company’s revenue by up to 5% of total sales.
A top executive at one of the largest third-party logistics (3PL) providers, GENCO, says automation can cut reverse logistics costs associated with excess inventory, returns processing and asset liquidation by 10% to 15%.
That statement is supported by research from the Aberdeen Group, which evaluated 167 service and manufacturing operations regarding their reverse logistics practices. The top 20% of aggregate performance scorers (the “Best-in-Class” companies) in the study were 74% more likely to have automated their returns process. By putting “a system in place to predictably and repeatedly execute on the return and disposal of a part or product,” these companies are better able to both manage the complexity of a reverse logistics operation and resolve customer issues as quickly as possible.
Further, the report states:
As a result of automating the returns operation, service organizations have been able to achieve improved results in better first-time fix of issues [64%], greater service level agreement (SLA) compliance [58%], increased value reclaimed from returned parts [24%], and a higher level of customer satisfaction [77%] as compared to those organizations that have not leveraged the efficiency gains of an automated returns process.
The deployment of affordable, flexible automated storage and retrieval systems can simplify reverse logistics processing. Through the implementation of such a system, returns can be handled as another form of inbound shipping through efficient routing and restocking items to minimise inventory costs, labour requirements and space demands.
Once returned items have been inspected and labelled with a disposition destination, things can fall apart for many returns operations. Inundated with a potentially overwhelming number of discrete items, managing their sortation and routing can be a real challenge for fulfilment centres. Boxes and totes of returned items can quickly overwhelm both the space allotted for their temporary storage and the labour assigned to their management. Especially for facilities with hundreds of thousands of square feet of conventional inventory storage racking, sending an operator to physically return one item to its stock location can be a time-consuming and ergonomically fatiguing task.
To move returned items through the disposition process quickly, an automated storage and retrieval system (AS/RS) can speed up processing times to maximise asset value recovery in a compressed footprint while reducing cycle times and labour-associated handling costs.
While there are a variety of AS/RS technologies offered in the market—including capital-intensive, multi-million-dollar robotic installations—the most affordable and flexible solutions are Vertical Buffer modules, vertical lift systems, vertical carousels and horizontal carousels. These self-contained systems offer higher density storage in a more compact footprint than manual storage equipment can provide.
The selection of the most appropriate AS/RS for a given reverse logistics operation is dependent on a variety of factors, including the number of inbound returns received per day, the size variability of the returned items, and the desired rate of throughput for returns. When paired with fixed mounted or radio-frequency (RF) scanners for barcode reading, light-directed picking workstations and/or put walls, items routed to the automated returns processing area post-inspection can be quickly identified and operators guided to the appropriate receptacle presented by the AS/RS. Because the automated systems deliver the destined receptacle directly to the worker and highlight their position, both walk and search time are eliminated, enabling a need for fewer personnel to sort and route more returns.
In certain applications, the storage bins in the AS/RS can even be utilised as forward pick areas. This functionality is enabled by integrated inventory management software that not only keeps track of the contents held within the machine but also interfaces with a facility’s warehouse management system (WMS) and enterprise resource planning (ERP) systems. This function allows picks to be sourced from the most convenient location (in this case, the returns processing area) for even faster restocking and resale of returned inventory.
Likewise, when the AS/RS’ software recognises that a pre-determined quantity of returned inventory has been reached, it can work with the WMS to assign and interleave a task for those items.
Want to learn more about returns handling, read our white paper for statistics and customer scenarios.
Kardex Remstar is one of the world’s leading suppliers of automated storage and retrieval solutions. Their products are designed to increase productivity and improve the efficiency of your working practices. With tailor-made solutions, which can considerably reduce your company’s storage space. Kardex has successfully installed more than 140,000 systems in sectors such as retail, warehouse & distribution, defence and aerospace since 1873.
Global brand experience agency Sense takes eBay’s UK Retail Revival programme into the real world, helping small retailers grow locally and globally.
The world’s biggest online marketplace, eBay, has launched a campaign that brings its Global Impact programme, Retail Revival, to life in the real world.
The initiative supports small to medium-sized business (SMBs) by helping them stay local, but grow globally, and navigate the increasingly complex and competitive retail landscape. The first of its kind in the UK, the campaign is being run by global brand experience agency Sense and focuses on the people of Wolverhampton, a vibrant area with a high concentration of SMBs and entrepreneurs.
It will consist of a concept store and pop-up activation, providing local retailers with a physical space to showcase their goods, whilst also giving the Wolverhampton community a chance to discover the traders on their doorstep, fostering a sense of community. Products from those retailers involved in eBay’s Retail Revival programme will be on display to local consumers who can scan a QR code that takes them directly to the eBay page where they are on sale. There’s also a Click & Collect Desk, where people can pick up items they’ve purchased.
Several of the local traders will also be running workshops for visitors, including make-up tutorials and tote bag making. Meanwhile, HugglePets is hosting a pet day where families can meet and hold a variety of animals, including lizards and tarantulas, with the proceeds going towards an aquarium the local trader is building for children in the area with special needs.
“Retail Revival harnesses the power of technology and eBay’s global marketplace to support and grow small businesses, strengthen local economies and foster vibrant community growth,” explained Federica Rabiolo, Senior Manager, EMEA Global Impact at eBay. “Launched in select cities in 2018, retailers are learning from eBay how to reach new markets and attract customers from virtually anywhere in the world.
“Working with Sense to bring Retail Revival to life in the real world through a live marketplace and community space will help us make stronger connections with local retailers and entrepreneurs and in turn help them build direct relationships with local customers. We’ve been very impressed with Sense’s creative approach to date, and are delighted to have them on board.”
The campaign will run in Wolverhampton throughout May.
“We’re delighted to be working with our new client eBay on this important CSR initiative,” said Sense Senior Account Director Jess MacGillivray. “Small businesses and retailers are the lifeblood of communities and also play a vital role in national economies. Supporting their development and growth in this way delivers benefits on a local and national scale. The Retail Revival campaign will engage more deeply with SMBs and communities on the ground showing eBay’s commitment and dedication to the cause.”
eBay was the first online marketplace. Today, it’s a household name. A regular feature in lists of best-loved brands, it connects millions of buyers and sellers, helping customers to find the item they’re looking for from its 1.1 billion listings. With 180 million buyers in 190 markets, trade is fast. The UK website sells a car part every second, and last year the online marketplace saw must-have items like LEGO Harry Potter flying off the virtual shelves every ten seconds.
This incredible interest directly benefits the small businesses who trade on eBay, giving them access to an audience once unthinkable for a small shop on the high street. Throughout its history, eBay has helped many thousands of small businesses to succeed. Small British firms regularly rank in the top five grossing sellers on eBay.co.uk’s biggest trading days like Black Friday, and over one thousand British sellers who started with a shop on eBay are now running million-pound businesses, providing jobs to people in their communities.
By partnering with sellers in this way, eBay.co.uk has helped hundreds of thousands of British entrepreneurs over its 23-year history. As a hub of retail in the UK, the marketplace also continues to welcome top brands to the site – including Curry’s, Halfords, GoPro, Canon and more.
eBay also makes it easy for customers to give to charitable organisations. Using eBay for Charity, sellers can donate a portion of their sales and buyers can shop while supporting their favourite causes – adding to the funds that eBay.co.uk has raised for UK charities to date.
Sense is an award-winning global brand experience agency that specialises in helping brands do exciting things in the real world, to create authentic communications across the marketing spectrum. It manages campaigns from strategy to evaluation.
After years of trying to map a universal customer journey, retailers are now clear that almost every single customer is unique in how they browse, interact and buy. A typical customer will shop differently from day to day, item to item and touchpoint to touchpoint.
This level of fragmentation in shopper behaviour has had a dramatic impact on retail as a whole, but particularly on those retailers that lack the flexibility in their systems, processes and culture to manage each journey in a way that is both profitable to them and satisfying to the customer.
The challenge facing retailers is the lack of connection between all the processes in the customer journey, causing disjointed experiences, lost sales and diminished levels of loyalty. In modern retail, the ability to adapt to the constant variations in customer demand is key, this means removing friction from the customers’ buying journeys. And, as Craig Summers, UK Managing Director, Manhattan Associates explains, that requires new thinking about systems, data, logistics and execution in every step along the buyer journey.
The omnichannel dream
Consumers are hoping for high levels of choice, convenience and recognition in modern, omnichannel shopping. To truly offer an omnichannel experience, selling anywhere, fulfilling anywhere and engaging anywhere is essential, as is elevating customer service and interactions to create exceptional customer experiences, regardless of where the customer started their buying journey.
This is the holistic world that every retailer is trying to create, but the reality for large long-established retailers is that they are not going to strip out legacy systems and create this omnichannel eco-system overnight. C-suites are having to consider the profitability of change, and the reality of implementation. What new capabilities will new technology deliver? Will true visibility be achieved? Is the investment guaranteed to deliver results?
The retail reality
Retailers have, however, taken great strides to enable their ever-more demanding customers to shop according to their personal preferences, at any time, on any channel. Physical and digital have merged to the point where the customer should no longer be impeded by the limitations of any particular touchpoint; after all, consumers do not think about or talk about channels, they simply go shopping.
Yet, growing pressure to seamlessly offer customers choice, convenience and recognition across an increasing number of touchpoints has led to new challenges. The reality is that most retailers’ systems, processes and people were never designed or trained up to handle such a diversity of selling and fulfilment demand. This has resulted in gaps between what customers want, and what retailers are able to provide.
Paving the way for future prosperity
From inventory planning to order orchestration, new fulfilment strategies and the next generation of POS, integration of capabilities will pave the way to keep up with the speed of modern day shopping. They must embrace technologies that guarantee profitable omnichannel operations. Upgrades need to go well beyond papering over the cracks of outdated technology. Making modifications to legacy solutions will no longer be enough to protect profit margins or keep up with increasing customer experience mandates.
Cost control is front of mind, of course. But thanks to the emergence of cloud-native systems, unnecessary costs and technical limitations can be eliminated and that plague legacy commerce solutions. Cloud-native architectures, built with micro-services, are designed to enable a long list of dynamic benefits such as elastic scaling, run-anywhere functionality, easy integration, single view of the truth and seamless administration.
Engineered for what’s next
These new systems must also be future-proof. New systems may be adopted by an ambitious retailer, but three years down the line shopper behaviour may have changed again, and the software and processes may no longer be relevant. It has become essential to have architectural flexibility across evolving operations with engineered support for extensibility and customisation, with innovation at the core.
The tools to capitalise on the omnichannel opportunity by better serving digital and in-store customers alike are there for the taking. From warehouse and inventory to retail stores and contact centres, technology enables retailers to remove points of operational friction, cut costs, maximise resources and delight customers from one end of the supply chain to the other. If retailers are willing to invest in solutions engineered for omnichannel, they can reap the performance benefits of connected commerce solutions, and enjoy the flexibility to adapt to whatever the future of retail and consumer demand holds.
Millennials are increasingly delaying traditional milestones like getting married, buying a house or having children and more commonly choosing to become pet owners instead. This is a generation that really loves their pets – so much so that some are even willing to reduce spend on themselves so that their animals can keep up with the latest trends.
Whilst pets have long been considered part of the family, the trend for pampering them as if they were children suggests that ownership of a cat or a dog might mean something more to the millennial generation than it did their parents or grandparents. For millennials, these animals are considered a commitment to the same level as having children.
For the pet industry, understanding these evolving trends and changing relationships between people and their pets is crucial. While price, product mix and other promotions can help retailers remain competitive within the landscape, it’s now more important than ever for retailers to put additional effort into creating deeper emotional connections and advocacy with pet parents. This is especially true for independent retailers. But how can independents in this sector genuinely connect with ‘pet parents’ and drive long-term loyalty?
Engaging pet parents with a relevant offering
Millennials are reshaping the industry with their changing demands and expectations. For independents, surviving the expansion of the larger retailers – including ecommerce giants such as Amazon – comes down to understanding these new customers and engaging them with an offering that is relevant and personal to them.
The relationships that people have with their pets is now more emotional and powerful than ever before. Independent pet retailers, by nature of their size, are more nimble and able to adapt quickly to these changing situations and new preferences of the consumer. For many larger counterparts, this level of flexibility is a challenge – resulting in missed opportunities to provide relevant experiences and engage customers at the right moment.
For example, many owners are seeking healthier, bespoke dietary alternatives for their four-legged friends, along with practical outfits for their comfort, travel accessories to protect them when on the move and even pampering services such spas and hotels. For more niche products and services like these, consumers are more likely to seek expert advice from smaller operations able to deliver a more bespoke customer experience.
Consumers want to feel valued, and this is particularly true for pet parents. These customers want to buy from experts in the field – those who are knowledgeable and passionate about what they are offering, as well as compassionate about the welfare of animals too. When it comes to advice and guidance, they want a high standard at all touch points. When retailers meet these needs successfully, the trust developed makes them more likely to become a repeat purchaser and advocate of the overall brand.
When it comes to online operations, smaller brands all too often fall victim to the notion that only large tech giants can access sophisticated technology to reach consumers. But independents can keep consumers as engaged and feeling appreciated using the right technological support for their needs.
For example, these retailers can leverage customer data for delivering relevant, useful and personalised experiences for pet parents at every stage of the journey. Relevancy in this sense is not just about sending an offer at the point of purchase but rather about creating and crafting experiences tailored to individual behaviours and preferences whilst responding to the evolving world around them.
Within the pet industry, the brands transforming their categories are increasingly those leveraging technology. Independent UK brand Bella and Duke, for example, offers dog owners nutritious raw dog food subscriptions – creating healthy and tasty concoctions for their customers wanting to give their dogs a healthy lifestyle. This creates a unique opportunity to nurture customers and get to know their preferences inside out.
Beyond using this information to send offers and email newsletters, it can be utilised to remind owners of their pet’s birthdays, offer pet health and well-being tips, share new pet fashion fads or solutions for overcoming separation anxiety. Above all, intelligently leveraging data insights ensures the right content is reaching the right audience and this is critical to standing out amongst the competition.
For online-only retailers, social media is also becoming particularly valuable for this. The likes of Facebook and Instagram are not only effective in driving awareness and opening conversations with customers, but also as a marketplace. These channels can be used for providing useful and engaging content that encourages customers to interact or click through. These are great platforms for reinforcing incentives that are targeted to customers initially by email, and for letting customers know when there is news to share.
Ultimately, driving long-term loyalty comes down to giving pet parents a positive interaction every time they engage with a brand. One of the best ways to ensure this happens is to listen and adapt to the customer’s evolving wants and needs. Independent retailers have a golden opportunity to thrive in a challenging and quickly changing retail environment. Even in difficult trading climates, it’s possible for the smallest pet brands to earn themselves a large, loyal fanbase by exceeding expectations and delivering unique customer experiences.
2019 is set to be one of the most challenging years retailers have ever faced. The market is flooded with uncertainty – and many retailers appear paralysed by indecision. Should the priority remain cost cutting or are there any opportunities for growth? Retailers that continue to innovate, listen to their customers and invest in technology will reap the rewards; but, asks Craig Summers, UK Managing Director, Manhattan Associates, what is the cost of doing nothing?
How much longer can UK businesses use uncertainty as an excuse to delay investment? Low consumer confidence has become a given over the past decade – and while economists can point to the positives of wage growth and high employment, these figures are clear indicators of the inherent underinvestment: companies are opting to throw bodies at the problem rather than embrace radical and essential technology-led change.
In recent times it is manufacturing that has borne the brunt of negative headlines regarding the UK’s (lack of) productivity and (under) performance. Retailers have escaped much of the opprobrium by hiding behind the admittedly huge challenges created by the fundamentally different dynamics of the online retail model. But the issues are the same: while a recent survey revealed that 81% of manufacturers are now ready to invest in new digital technologies to boost productivity, translating that readiness into a willingness to make the investment is likely to remain the major stumbling block if the UK retail market is any indicator.
Just like manufacturers, retailers know that change is essential. Most admit the need for end to end supply chain visibility, for better operational control and enhanced customer experience. The problem is strategic paralysis, delaying essential change and opting, at best, to tinker at the edges of flawed retail models.
Where is the innovation? Where is the proactive response to a disrupted retail model? While many companies have made ‘as good as Amazon one day’ pledges, the reality is that the majority are postponing investment, relying on cost cutting to save the day. Slashing high street stores is a short term panacea at best. At worst, it fundamentally misses the implications of the technology-driven change in retail models that disruptors such as Amazon will continue to achieve year on year.
Winners Exploit Opportunity
In any market, any business cycle, there will be winners as well as losers – and in today’s turbulent retail environment, the winners are those companies with a willingness to invest and embrace change. From small independents spotting a gap in the market to deliver highly curated, original content to companies opting to rapidly scale by taking advantage of low high street rents and failing competition, it is the agile and innovative that are gaining marketing share and generating profits.
These winners are expanding – they are adding stores, extending the range, reaching out to new customer bases, expanding internationally. They are exploring technology in a bid to reconsider existing retail models – leveraging real-time, end to end stock visibility to redefine the store estate as mini distribution hubs, for example, to transform the customer promise. They are embracing the flexibility and agility of cloud based software to embed scale within the business model, driving down capex whilst also creating a business poised to rapidly explore any new opportunity – from trialling new international markets to swooping in when a competitor fails.
In contrast, the rest of the retail market appears to be accepting a gentle yet inexorable decline.
To be fair, ten years ago who would have predicted the current state of the UK retail market? Retail has always been cyclical, and every downturn creates both winners and losers, but the sheer scale of change this time has been unprecedented. The combination of the disruption created by the online revolution and lack of consumer confidence has driven many traditional names to the brink – and beyond.
But an unwillingness to make the big investment decisions has become the default setting for too many UK businesses. Retail is no exception. It requires innovation, imagination and positivity – and there are many successful and growing companies proving that point. But retailing is fundamentally different – disruption is technology-led and technology driven. The success stories of 2019 will be those retailers that embrace change and actively explore and exploit technology innovation to reach new markets, deliver new experiences and reimagine the product mix.
The eCommerce industry is transforming dynamically every year and it is crucial for your business to analyse emerging eCommerce trends and the way consumers shop to plan and experiment with your strategy.
The Internet of Things is the latest technological trend shaping the future of eCommerce and is said to be worth $1.7 trillion by 2020. It is occurring everywhere we look, enabling devices to exchange data with each other through the Internet. Internet of Things makes it easier for retail and eCommerce businesses to carry on their operations efficiently.
Statistics say, that by 2021, 70% of the retailers will adopt the Internet of Things to improve customer experiences worldwide and expand revenue opportunities. As most of the business are investing in that trend, as an online retailer you need to know about the future of IoT in eCommerce.
Let’s go through the ways to utilize IoT data for your eCommerce business.
What’s Behind IoT?
Internet of Things (IoT) is a form of network of distinct internet-enabled devices, software and sensors together through the medium of the Internet so that they are connected together, and doesn’t require human-to-human or human-to-computer interaction. This network is then used to share data and exchange information between apps and users.
In the world of the Internet of Things, everything can be connected and communicate intelligently. Any network of connected devices can be a part of the IoT, for instance, your phone could communicate with the lights in your house, in order to turn them on.
Benefits of IoT
There are many ways that your business can benefit from IoT, beginning with the ability to easily grab data, analyse it and come up with a solution really fast. Here are some most important benefits that the Internet of Things has to offer.
Monitoring the business overall with good automation and control
Improving customer service by understanding consumers better
Increased efficiency and time-saving
Saving money by reducing manual task and time
Enhancing employee productivity
Integrating and adapting business models
Improved decision-making process
Generating more revenue
Overall, IoT encourages organizations worldwide to work on improvements, offering tools to save time and money in the process, as well as change their business strategies. It offers solutions in healthcare, agriculture, location services, architecture as well as home automation.
There are numbers of IoT applications and devices that are providing better quality of life, making it more comfortable. According to Statista, in 2018 there has been 23.14 billion IoT devices connected worldwide. Most popular nowadays are smart homes, serving customers with several smart appliances which can be controlled remotely via computers or smartphones. Let’s go over some top IoT devices on the market right now.
Google Home Voice Controller
The connected voice controller from Google, besides controlling your home it also comes with Google Assistant which allows users enjoy the features such as media and news, translation, managing alarms and timers, controlling the volume and helping you to plan your day.
Amazon Echo Voice Controller
The connected voice controller from Amazon which can give you access to information, news and weather, play music, add things to your to-do lists, make calls and message on voice commands, wake you up and control your home.
This coin-sized tracking device is able to locate your belongings in real time and notify you about their location, whether they are lost or misplaced. It is a great solution for anyone who has trouble with finding their wallets, keys, phones or even pets.
POP Home Switch lets everyone in the house control smart lighting, music and many more with the push of one button. You can program each switch with up to 3 commands to add creativity throughout a smart home.
It is a smoke and CO detector, currently overtaking its competitors from the smoke alarm market. With an industrial-grade smoke sensor, automatic self-testing, it has become the first home alarm to easily hush from your phone without any extra hardware.
Ways to utilize IoT data for eCommerce business
Now you should understand what benefits and innovations can IoT bring to your daily life, so we can move on to the advantages and ways of utilising IoT data for your eCommerce business.
As every retailer knows, managing the stock and doing inventory checks can be a real struggle sometimes. With the help of IoT, all data can be stored in the system without human intervention.
The entire process becomes easier and reduces human errors, stores information like product type, manufacturer’s name and expiry date, enables monitoring and tracking the number of products and allows automatic orders when items are sold out. It all helps with smooth inventory management and keeping track of it.
Personalisation and Consumer Experience
IoT enables eCommerce businesses to decrease customer dissatisfaction and stand out in a crowded market. Many brands use IoT data to analyse what products are popular on different platforms, which allows the retailer to deliver outstanding customer experiences with high-level personalisation.
IoT helps to fully understand different groups of customers and analyse their shopping habits by the search trends and browsing history. It all leads to improving customer service overall with fast interventions as well as influence purchasing decisions with targeted advertising and personalized offers.
Supply Chain Management
IoT ensures that the supply chain management process runs smoothly. It enables monitoring and tracking the goods from the production process stage to delivery. It also gives access to information about location, temperature and allows a business to predict delivery time as well as change the route and speed up the whole process.
It definitely helps retailers to reduce errors during shipment thanks to real-time monitoring and access to all information.
As we know now, that IoT helps to manage inventory management and make sure the warehouse is fully stocked, it also decreases the chances of over-stocking the products. Different sensors can monitor the environment, for instance, the temperature, to make sure it is right and avoid any loss in the stock. It can also send alerts if an error has been detected which results in a quick intervention and solving a problem much faster.
Amazon, for instance, uses warehouse robots to improve the effectiveness of the packing process – the robots are able to load parcels of more than 300kgs.
Ads and Real-Time Marketing
IoT data opens many doors for marketers and it is predicted to give access to information, that helps create personalised ads. Nowadays, it works best with smart wearable devices and device apps.
IoT analyses data based on user’s behaviour through the wearable device or an app and suggests the ways of advertising that would attract that user. Let’s say someone is using a smart device to track their activity at the gym. Once you have access to their performance and registered workouts, you can come up with an ad that will market the product they could be interested in.
IoT advertising gives you a chance to draw user’s attention and encourage them to visit your site, through real-time messages and ads.
The newest technologies certainly come along with endless benefits and open many doors for online retailers. However, there are a few concerns that are brought up by the Internet of Things.
Let’s start with privacy. All of the information is stored on the Internet and there is always a possibility of hackers breaking up to the system and stealing the data, even though the information seems to be protected.
Another drawback of the Internet of Things is over-reliance. We trust in the information we receive from the system; however, it can also make mistakes. Relying only on technology can be risky and if we start depending on it, the results may be tragic if the system collapses.
Finally, the last concern that comes with the IoT is the loss of jobs. The automation of technology means less space and need for human workers. Some jobs have been completely replaced by connected devices, such as self-checkout machines at the supermarkets or even ATM’s.
With evolving technology, IoT is expected to have a huge impact on the future of eCommerce. Automation, time efficiency and better monitoring are some of the many benefits that IoT has to offer. However, it is also crucial to be aware of the drawbacks that IoT devices can bring.
As more things are connected to each other, often have no security capabilities at all. Most of the automated robots and machines are controlled from the distance and are very sensitive for data loss and sabotage. As a big organisation, you should definitely carefully protect the information and test the equipment before the complete implementation of IoT for your eCommerce business.
Contributor: Karolina is a content writer for Appnova, a creative digital agency based in London that specialises in luxury brands. She loves to write content based on current ecommerce, social media and marketing trends and provide insight into customer care, fashion and the beauty sector.
When you think about it, the success of any retail business comes down to if the price is right. Great prices or deals are necessary to get people through your door and keep them coming back. This is necessary to turn a profit.
Every business needs a mark-up on what they sell to survive. This isn’t possible on everything sold (a good example is pubs, who don’t often make money on food but do on the drinks they sell), but it is on most things because you can adopt clever pricing strategies to drive demand. Here’s a few of those to try.
What does it do? It builds trust.
Vendor pricing requires you to buy in produce with a manufacturer suggested retail price already applied to the product. These can often be found on energy drink cans and consumables you’ll find at supermarkets. The benefit is you can sell the product for what is perceived to be a fair price and still make a profit. It builds trust because your customers will come to expect the price you have set elsewhere.
Psychological or ‘odd’ pricing
What does it do? It triggers an emotional response.
Psychological pricing dangles an odd price in front of your customer that is several pence cheaper than elsewhere. You use figures that end in 5, 7, or 9, such as £9.97, to make your deal sound like a great deal. The reason it sounds like a great deal is because customers tend to round down to the lowest pound so £9.97 would become £9 and not £10. One study found this to be highly effective for lower-priced products.
Time limited pricing
What does it do? It applies pressure to each sale.
Take your stock and set up a ‘while stocks last’ or ‘for a limited time only’ card and you can shift a huge quantity of it in a short space of time. Some of your customers will believe the deal in front of them will be missed if they don’t buy right now, despite you having already ordered another pallet of the stuff. By time limiting pricing, you ramp up demand for what it is you’re selling and create urgency with your customer.
What does it do? It helps you shift large amounts of stock.
If you have a lot of stock to shift you can help it get a move on by adopting a multiple pricing strategy. This is where you sell more than one product for one price, such as two items for £2 or three items for £5. The effect of which is your customers are more likely to purchase in larger amounts. Supermarkets and clothes retailers like Sports Direct are perfect examples of retailers using this strategy to increase sales.
See what works for you
These pricing strategies can be applied to brick and mortar and online retailers alike. Try a few of them and see what works for you. If you found this article useful, you might find our piece on how much stock to order useful too. This article was contributed by B2B lenders Nationwide Corporate Finance. Visit them at https://www.nationwidefinance.co.uk/.
Sustainability performance is critical to ensuring a healthy supply chain that nurtures business growth. How can supply chain sustainability risks impact your business?
Sustainability performance should be one of the most pressing considerations in any supply chain. It is tempting to view prioritising sustainable practices as choosing the planet over profit. But encouraging ESG (environmental, social and governance) investing across your supply chain is vital for guaranteeing long-term prosperity.
Sustainability related risks can adversely impact growth projections in a number of ways. Inefficient resource usage generates waste, has a negative effect on availability and, subsequently, productivity. Consumer goods businesses depend on resource abundance in order for their manufacturing and selling to be cost-effective. They also require permission from increasingly sustainably-minded investors and regulators to continue to do business. Unfortunately, consumer goods companies have historically been slow to respond to sustainability demands – and urgently need to improve.
The environmental impact of unsustainable practises causes long-term damage across the economy; a report by the UN Intergovernmental Panel on Climate Change estimates that environmental factors could cost the global economy $2tn by 2030. With an increasing spotlight on corporate responsibility, environmentally or socially oblivious business practises also weaken consumer and investor confidence in organisations.
How can you improve your supply chain’s sustainability performance? Honestly evaluate your company’s current and projected social impact.
To understand how you can improve your company’s sustainability performance, you must gain an in-depth understanding of its current and future social and environmental impact. Two important sustainability risks to consider are your carbon footprint and any health and safety risks to workers along your supply chain. The latter is particularly pertinent when manufacturing is outsourced, and workforce wellbeing is less transparent.
Failing to honestly evaluate the health and safety of supply chain workers can have catastrophic results for an organisation’s reputation. For example, the Reptrak 2014 index of the 100 most reputable companies includes eight apparel brands. Of those, two were dropped from the 2015 index following a deadly factory collapse in Bangladesh, where workers had been producing goods for them.
With the combined force of business leaders, scientific consensus and world governments calling for dramatic improvements to sustainability performance, pleading ignorance in this field is no longer an excuse. Honest self-evaluation is the first step toward improvement.
Work closely with your suppliers
Improving sustainability performance across your supply chain is only possible when you set high standards for your suppliers.
Fostering trust and establishing a good working relationship with your suppliers is necessary for potentially developing innovative, sustainable solutions together. There can also be a perspective problem that affects how we choose our suppliers. Prioritise sustainability performance alongside other supplier considerations such as punctuality, cost and quality.
Work with a supply chain consultancy to develop KPIs for measuring the success of sustainable initiatives. Where possible, monitor your supplier practises.
Focus on the big picture and think long-term
If you fail to focus on the big picture, ambitious sustainability goals can seem like an unattractive proposition. Supply chain managers worry these implementing these changes may require a reorganisation of some core aspects of your business – or even a short-term impact on profits.
There is, however, an appetite for a dramatic improvement to corporate sustainability performance. An agile, knowledgeable and forward-thinking team should constantly be looking to innovate supply chain processes. Dynamic, sustainably minded businesses should be looking to partner with businesses who share those values along their supply chain to ensure long-term profitability.