Changes to the traditional model of going to the store or mall, selecting merchandise, and paying at a fixed cash register have been underway for years. Initiated by busy lifestyles and enabling technology, modernization of retail was accelerated by the pandemic and in many cases, consumer behavior has been forced to change as a response to modifications retailers made during the pandemic.
As an example, many retailers across sectors, including Macy’s, Best Buy and Kroger supermarkets have closed multiple locations, according to a story in Moneywise. Store closures like these have pushed consumers who still may have preferred an in-person shopping experience, to turn to e-commerce due to distance and availability.
For the retailers, by closing stores, they are likely influencing which consumers continue to shop with them and also their mix of online to in person sales. These factors then impact their capital plans and budgets, inventory management and how and how fast they can get goods into consumer’s hands.
The change in ratio of online to in person sales that we are experiencing is made clear by the projected 46% increase in e-commerce between 2019 and 2023, according to Statista. Additionally, 63% of shopping journeys start online, making easy to find, informative and positive online experiences critical to retailers, even those who have the majority of their transactions in person.
In the past, choice of store locations may have been more important to let the retailer be visible and found. Now, maybe that visibility happens online, and other factors become more important for brick-and-mortar locations such as accessibility of curbside pickup or ability to try on the size you want or in person expertise about the product(s) you need and complimentary items.
No one knows exactly what the future holds, but the past makes it clear that flexibility is key. The need to plan, build and retrofit with an eye on how space is and can be used, how payment happens today and may happen tomorrow, how physical locations support today’s supply chain needs and may meet tomorrow’s, how capital asset management can support sustainability goals is critical to both the short- and long-term success of the retailers.
It is critical for retailers to take a holistic data-driven approach to capital program management to maximize budget dollars while mitigating risk as they plan for the future.
Working with our customers, Oracle Construction and Engineering has identified five best practices for successful capital program management in retail, including future proofing your plans, addressing supply chain risks and tackling sustainability.
Read our new ebook, Five best practices for successful capital program management in retail.
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