Despite the fact that almost every item that customers can buy in a retail store can also be purchased online, many brick-and-mortar retailers are thriving.
Two decades after online retailers began shipping goods to customers' doorsteps, and more than a decade after the introduction of free and fast shipping of online orders, the brick-and-mortar store is still the hub of multichannel retail. In fact, 80 percent of all transactions occur in the store, as do 70 percent of product returns.
Traditional retailers that embrace digital transformation are a large part of this success. Today, it's normal for retailers to interweave physical stores with online sales: accepting returns at brick-and-mortar locations for items bought online, using stores as "showrooms" to display products that customers might end up ordering over the internet and helping customers place online orders for out-of-stock items.
Today, it's even more important for retailers to make digital transformation work to their advantage. Emerging Internet of Things technologies promise to help organizations across all industries collect and analyze data that will lead to new business intelligence insights.
In retail, digital transformation strategies primarily revolve around two goals: creating a unified, connected experience for customer interactions with staff and systems, and giving workers the tools to be more productive, efficient and relevant to shoppers.
Going Digital: How Can You Differentiate Your Business?
In "The Case for Digital Reinvention," McKinsey & Company researchers say that despite the appearance of ubiquitous digitization, the reality is that many companies have yet to embrace it. And when companies do so, they see considerable variation in their return on investment, according to a survey of respondents representing a wide range of industries.
This means that, for maximum impact, retailers need to be savvy when it comes to the solutions they choose and how they integrate them. Many companies find that an inventory management strategy can help drive improvements in both customer interactions and employee efficiency.
In fact, McKinsey researchers say that digitization has had such a dramatic influence on customer engagement that modernizing this area is essentially a "must do" for companies that want to compete. They also find a strong correlation between investing in digital initiatives and marketplace success.
The cause-and-effect relationship is unclear, but digitization is definitely a differentiator, McKinsey says: 49 percent of market leaders invest in digital more than their competitors. And the worst-performing 5 percent? Ninety percent of them invest less than their competitors.
Optimize Inventory Solutions to Work on Multiple Platforms
Inventory management tools can have a profound impact on customer experience. For inventory management solutions to create real value in an omnichannel retail world, they must work seamlessly across different systems — giving customers a unified retail experience, even as they switch back and forth between retailers' brick-and-mortar stores and online platforms.
The key is the ability to migrate data across all systems. While most large retailers are now reaching customers across multiple channels, the reality in many companies is that not all business units are aligned with the omnichannel concept. Instead, many continue to work in silos. In the new model, customer interactions are unified, streamlined and connected, regardless of location.
By their nature, online-only retailers tend to give customers a unified experience. Shoppers can instantly see stock information, compare prices, place preorders, read customer reviews, choose from practically limitless items and often obtain free shipping. It's a lot to compete with.
But by implementing the right inventory management solutions, retailers can empower staff to engage more effectively with customers and leverage the often-overlooked advantages of physical stores that can serve as a hub for their entire brand.
Find out how retailers can embrace digital transformation strategies to drive productivity, efficiency and a better customer experience.