How the Pandemic Saved Brick-and-Mortar Retail

Today we all love — and have likely used — curbside pickup at some point over the last two years. But let’s be honest: there's no reason retailers couldn’t have offered this a decade ago. As we take stock of the many changes to come out of the pandemic, one of the biggest in retail is that retailers finally accelerated the need to innovate the consumer experience.

One of the key opportunities in today’s retail landscape that was overlooked pre-pandemic is the physical store as a competitive advantage in the e-commerce game. Many retailers are at a crossroad as they consider whether to take the path towards true customer-centric omnichannel (which will require new tools and, in many cases, a culture shift) or continue down the forced path they’ve been on for the past three years: a DIY model of physical-plus-digital that has led to the inefficiencies, backups and disruptions we’re seeing now.

The Path to True Omnichannel

Unfortunately, I believe we’re still debating the definition of “omnichannel.” For me, it’s the ability to have shopping the way I want.  This experience may tap into any or all of a retailer’s channels on a single order so I can receive (and possibly return) my order based on my preference (in-store or curbside pickup, at-home delivery, in-store return) — all with the same branded experience. No “online-only coupons,” change in inventory from one channel to the next, or disconnected online vs. in-store return policies.

But over the past decade, there has been a general lack of investment in retail innovation and infrastructure, making true omnichannel out of reach for most retailers. Just think of all the manual processes still in use today, and the consequences (e.g., all the warehouse staff out due to illness, quarantine and isolation). Those that were slow to automate their distribution centers and supplier relationships are paying a price.

The pandemic will (hopefully) be a blip on the radar when we all look back at these couple of years. However, it is a moment when retailers can choose to learn from the past or ignore it and hope they don’t get swallowed up.

A Shift to Consumer-First

In order to stay relevant, profitable and desirable, retailers need to make a shift to consumer-first. Consumers want to buy when, how and where they want. A retailer’s entire business should be set up to deliver on that one goal.

How to get there:

• Optimize shipping, delivery and inventory. Retailers have a lot of back-end systems to make them more efficient, which have largely been ignored. For example, drop-shipping needs to become a seamless and automated process, allowing retailers to take advantage of its benefits while ensuring customers get their desired products quickly and efficiently via the channel of their choice.
• Leverage data and insights. More and more, having the right inventory at the right location will be imperative. (We're seeing the impacts of this today across the supply chain.) With the right tools and data, retailers can view store-by-store inventory, trends and predict future needs.
• Invest in inventory management. In many cases, the empty store shelves we’ve all seen are a result of poor, or lack of, inventory management. Today, teams are manually opening, counting, unpacking and redistributing goods, which makes it impossible to develop realistic staffing plans and can lead to a dearth of product for customers.

The bottom line: Retailers have been given a second chance to rethink how they support consumers in their buying journey. By stopping and planning strategically for the future with the consumer in mind, retailers will be prepared for the next big challenge.

Archie Black is the CEO of SPS Commerce, where he has led the company to become a recognized leader in retail cloud services with the industry’s largest retail network.