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From Brick & Mortar to e-Retail-Consumer Push for On-Demand Delivery

By Khaled Naim, Co-Founder & CEO, Onfleet

Khaled Naim, Co-Founder & CEO, Onfleet

The deluge has begun—brands that have built a reputation as top names in the United States retail industry are experiencing an unprecedented number of store closings this year. RadioShack anticipates 552 stores closings, with Macy’s at 63, and Office Depot at 100. Meanwhile, Amazon continues to capitalize on its ability to be both an online retailer and distribution center.

The advent of e-commerce sites such as Amazon have allowed people the ultimate convenience of purchasing an item with a desired delivery date, without taking one step.

"On-demand is now the norm for consumers, and brick and mortar retailers cannot sit back and wait while the world changes around them"

The rapid delivery capabilities of Amazon’s delivery service—two days or less—and low price points have also added to the financial blow that once-reigning brick-and-mortar retail leaders have begun to feel as recognized brands close locations across the nation en masse.

Retailers large and small must learn to compete with an evolving retail landscape, one where e-commerce is expected to account for nearly 13 percent of retail sales in 2019. How can brick and mortar stores evolve to compete with e-commerce retailers? The answer is by providing advanced delivery logistics—for both deliveries and returns—and further personalizing their brand.

A Problem and Its Solution

In today’s market, small businesses are faced with the glaring reality of either evolving or, quite literally, ceasing to exist. It’s Darwinism, defined.

Uber has also provided a new paradigm for consumers, one where real-time trip estimates and driver tracking are standard, indirectly upping consumer expectations for shipping. Also, both Uber and Amazon have illustrated that speed and service can equally co-exist, leaving retailers beholden to the expectation of immediate, convenient and seamless delivery from retailers.

Yet small businesses lack the resources to compete on a large scale with e-commerce giants. With automatic convenience as a default expectation, today’s customer demands more from retailers and the ones that meet their needs get their dollar.

To succeed in this changing market, retailers must become e-tailers–hybrid businesses that blend the on-demand capabilities of an e-commerce leader such as Amazon while maintaining the personal approach of the brick-and-mortar store.

How Brick-and-Mortar Stores can Compete in an On-Demand World

I. Dominate your market while connecting with customers. Amazon cannot do everything and be an expert in every field. 69 percent of online shoppers want more reviews from e-commerce sites, for example, which means that a brick-and-mortar retailer can stock its website with glowing testimonials to fill a need that Amazon does not. Brick and mortar stores can offer the human element that, if mastered, can become the differentiating factor between an individual buying a less expensive item and your item.

II. Have a flexible return policy. Reverse logistics are just as important as logistics on the front end. 62 percent of people won’t shop online if the company doesn’t offer a return policy. Therefore, develop a return policy that provides a refund or exchange, and process for repackaging and reselling an item.

III. Leverage an in-house delivery fleet for more control and better experience. Building an in-house fleet is not only cost effective, but it also allows companies to build their brand with the team that they recruit and train. You establish one more touch point that e-commerce giants can’t compete with, the human-to-human interaction that your brand provides. Another option is to outsource delivery to a third-party network, which works most efficiently as a company ramps up production.

IV. Ship from the store. If your store has the inventory, you don’t necessarily have to rely on shipping from a distribution center. Instead, leverage the store’s inventory to support e-commerce sales as well. Shipping from the store, according to information from the e-commerce company eBay Enterprise, can lead to a 20-40 percent increase in incremental revenue.

V. Leverage cloud-based logistics software. Allow your retailer to provide Uber-like service to its customers. This technology improves the delivery service by tracking your fleet, providing comprehensive data analytics and KPIs, and improving customer experience with automatic notifications and real-time tracking.

e-Tailer Success Stories

These companies successfully blend a strong focus on logistics with the personalization of the brick-and-mortar store, best representing the idea of the modern-day e-tailer.

A medicinal cannabis startup, just two years old, is ramping up production and selects a third-party network to streamline deliveries. By working with dispensaries that have their own drivers, the startup provides on-demand service with fast delivery to patients, consistently building a reputation for reliable service that prioritizes the health of its clients.

A brick and mortar furniture shop has not increased sales in three years, while the online leg of the store has increased sales in the last few years by 15 percent through its use of a new logistics platform. In an effort to increase sales in the physical store, the owner has added shipping from the store and changed the online and in-store return policies from “All Sales Final” to “Returns Accepted Up to 14 Days After Purchase.” After implementing these two changes, the store has seen an increase in brick and mortar sales by 13 percent, and e-commerce an additional 5 percent.

A gourmet food service popular among young professionals has quickly expanded and decided to use a cloud-based logistics platform to simplify the delivery process. The solution is cost-effective, cutting shipping costs by 20 percent, and has also allowed for seamless delivery. The company has cemented a brand built on providing unique curated meals for foodies, with the majority of customers as repeat buyers, and positive testimonials that fill the company website, and Yelp.

Conclusion: On-Demand is the Norm

In conclusion, on-demand is now the norm for consumers, and brick and mortar retailers cannot sit back and wait while the world changes around them. They must adapt and implement the characteristics that have made e-commerce companies such as Amazon and Uber successful. Leveraging technology—whether to develop a stronger customer-retailer relationship or to improve last-mile delivery—is key to the survival of brick and mortar retailers in this increasingly on-demand society.