The New kind of Black Friday rush
In the WSJ article “Retailers adjust as online sales soar”, writer Sarah Nassauer so aptly highlights the environment on Black Friday in many retail stores:
“At a Target store in Brooklyn, stacks of televisions and toys awaited the rush of the weekend’s holiday shoppers. Hours after the store opened, it was calm. More franatic were the Target workers pushing carts through aisles to collect products ordered online by shoppers for home delivery or for pickup at the store.”
– WSJ, (12/02) Page 1
Before e-commerce, the only Supply Chain logistics a retailer had to worry about were getting products from suppliers to the distribution and fulfillment centers, and then into their stores. The influence of Digital on the shopping journey has also increasingly seen the role of the store develop as an online fulfillment hub.
Brick and Mortar’s strategic advantage is Brick and Mortar stores
What was initially thought as a disadvantage for brick and mortar retailers can become a powerful asset to compete against the likes of Amazon. Obviously Amazon realizes this and the “Lockers” initiative by Amazon is a step in the direction of tackling that challenge. Here are few ways retailers can use their physical locations as strategic levers :
(1) Rapid fulfillment :
Supermarkets like Walmart are already experimenting with some version of this but my vision is a step beyond what they are trying to do. There is some analytics involved but it can be formulated as a Mathematical model (I have tested this on some real data):
A Mathematical model, defined as a function of a distance radius, a threshold total revenue, delivery weight and volume and a threshold number of orders from a specific locality within a two hours time frame ( for 2 hour delivery) can be used to fulfill Grocery orders within a 2 hour duration.
(2) Mini fulfillment centers:
Even for the rapid fulfillment scenario above, Supermarkets will have to carry more inventory than they usually do. We know that for decades, retailers have actually strived to reduce stock inventory at retail locations. However, I would rather propose that retailers should contemplate leveraging their retail locations as mini inventory holding depots as well.
This will be a relatively easy response to Amazon’s next day delivery. There needs to be some investment, in order to convert a portion of the stockroom into a warehouse environment. That portion will deal solely with online orders, like the one indicated in the WSJ article above and the suggested rapid fulfillment model above.
Webrooming is a slang for the consumer practice of researching products online before buying them in a physical store. For many categories, like fashion apparel or even electronics, many customers want to experience the product in person. This is where Brick and Mortar retailers have an advantage. The store experience can be augmented such that webrooming customers get a positive experience every time they indulge in webrooming.
Views my Own.