“How Quickly I Can Get” May Be The New “Low Price”
I read this article on the supply challenges of omnichannel retailing today.
While I’m no supply chain expert, I am a well-educated consumer, and have been known to dabble in retail design here and there. I find it a really exciting time for retailing as old models of doing business are being challenged and consumers are finally being empowered. Retailers and big companies are on the ropes, landed there by extremely fickle and budget conscious consumers, who require instantaneous gratification. (This is my theory at least).
This is my initial response (below) to the article, when posted on an online social media site. And I just wanted to follow-up with an example and a couple other comments, thoughts.
“I wonder if the day will come when the speed at which I can have something in hand will trump price as a consumer. It may even be here already.
Omnichannel offerings have basically leveled the playing field for consumers – if there is a product out there then I can most certainly find it in-store or online. So that lever is set. Next everyone is price matching – that lever is set. Oh look, here is the accessibility lever – when can I have it?
Amazon is working towards same day delivery. Retail stores since the dawn of time have provided same day delivery (i.e. I drive to the store and take it home) of in stock items.
The challenge for brick and mortar is to get me (consumer) what I want if they sell it, but don’t have it in stock on site…if they don’t sell it in the first place it’s a moot point.
So let’s say I’m Target, Wal-Mart or your store of choice and I offer 10 million products online, and a relative handful in stores. As a consumer, in your store, I need to know #1) what you can sell me both here and online and #2) how quickly I can get it. I’m just going to assume the price is right because the retailer is constantly battling to provide the best price – price is almost irrelevant in 2014, at least as far as our brave new world of retailing is concerned.
Right now physical retailers struggle with: communicating the entire breadth of their offering, making it easier for consumers to “showroom” in their own store and order online, and let consumers know how quickly they can get something delivered if they can’t take it home right there and then.
We will see all kinds of retailers leap frogging each other as they solve for this complex, yet pretty simple problem of speed to consumer. It will require them to rethink their supply chain and business philosophy a fair bit. Those who are willing and able will flourish. Those who won’t or can’t will mercifully be saved from having to service consumers ever again.
As you read further into the article, one thought I have is, maybe companies like Wal-Mart or any other large consumer product company have gotten too big – they may not be able to adjust quickly enough or at all. I don’t know. But the thought has crossed my mind. From the article:
“Durable goods retailers’ biggest concern is that marketing promotions bring about unintended consequences to their supply chain…Instead, durable goods retailers are increasingly becoming entrenched in a race to the bottom–pumping out promotions and price changes far more frequently than they should. Their model was never built to support a heavy promotional cycle, and as a result, even their supply chain is being affected by this hyper-promotional behavior.”
“Inventory accuracy is a prerequisite to any of these tasks, and retailers just don’t yet have the confidence in that inventory data to be effective.”
Maybe smaller enterprises that are more agile will be able to better serve their customers. Though their narrow product offering is their biggest challenge.
The key is for retailers to understand the playing field and understand what they can and can’t do.
Small retailers need to know their customers and attract them to their physical and online store from around the world. They must deliver exemplary customer service, story, brand and product that customers can not or will not get anywhere else. every aspect of their brand must sing at every consumer touch point.
Large retailers need to re-write their play book and stop being distracted by promotions and pricing. They need to outwit online retailers and take new innovative risks whilst shoring up their brand. Simplifying the process, every process, won’t hurt either.
Low prices are ubiquitous. And not all consumers care solely about price. It’s just not as much a selling point as the economy picks up, people buy less stuff (because they don’t want it or can’t afford it), and people start to challenge the push-pull model of consumerism.
Already speed, quality and brand are passing price in importance in my opinion.
Ultimately as a retailer it’s always about selling stuff. Don’t over think it, ditch the old school way of doing business and stop running scared. Work smarter, not harder, like the cliché says.
Headphone Shopping Example
We’ll keep an eye on things and expound upon things with additional thoughts in the future hopefully. Meanwhile here’s my one example from shopping earlier today.
My son needs headphones for Kindergarten next week. Apparently they need them to listen to the computer during class time. Cool. Sounds good to me. Only guidelines are no ear buds, and no need to buy $400 headphones. So what we need is something inexpensive but not cheap. I’m thinking something like the headphones all of us who are of a certain age got with our Walkman’s in the 80’s. Well we went to the local big box store. The only thing they had were one set of headphones that weren’t buds or $400 fancy headphones. That’s fine, but they were slightly bulky looking; the headphones get dumped in a bin at school so the smaller the better. And the price as $22 so that didn’t sway the decision either way.
Most people would have bought them and been fine. Well we now are going to cross shop two other stores. What could have been a 5 minute trip has turned into a two-day affair.
The point is the shopping experience wasn’t tailored to today’s realities and this opened up the opportunity for an anal retentive consumer like me to go shop elsewhere – I know perfection exists and I will find it. Let’s say most consumers aren’t insane like me; still how many did the retailer potentially lose because of a middling retail experience.
I looked online: they list 143 headphones available in store. We saw one set that came close (and we’ll probably buy eventually). If there were 142 other headphones sets I wouldn’t know because they were scattered in four different areas. The store lists 453 headphones available online. Wow. I guarantee even I could find a suitable pair from that retailer.
But the in-store experience did the retailer no favors.
We need to be able to showroom in stores.
Here’s a pretty good example. I’m sure there are more.
Retailers do this:
- make it easy for consumers to find the items they’re looking for in store and online
- communicate online and in store selection, especially communicate it in store – leave nothing to chance or customers will walk out and check next door
- streamline your supply chain to win the battle of speed to consumer and take care of your customers
Lastly, keep in mind, shopping situations vary. As a retailer understand all of your customers. If your supply chain is got its stuff together and is speedy you products may even be able to beat your customer’s home.
What do you think, on to something here or delusional?
How important do you think speed to consumer is?
Share your thoughts and ideas in the comments below
Chris Weigand Design, LLC is a full service retail and brand consultation firm. We love to shop, love to buy and love to design. Contact us today to talk about how we can bring creativity, simplicity and a new perspective to your retail stores. http://www.chrisweiganddesign.com or 330-858-8926