In my recent article, seen at TotalRetail.com, I discuss how consumers are no longer just demanding the right product; they are controlling the ‘how’ and ‘when’ as well. So how does this impact retailers?
As we move beyond omnichannel, it’s no longer a matter of delivery or buy online, pick up in store (BOPIS)—from subscriptions to quick-turn delivery and services, innovative retailers are taking on new formats to entice customers and, along the way, are adopting new models to accomplish their goals.
Just as omnichannel transformed from the novel offering of a few forward-thinking retailers to ubiquitous acceptance, new retail formats may become the expectation for consumers. New retail partnerships are popping up all over, like Amazon returns at Kohl’s stores and Disney shops inside of Target stores.
Instant Gratification: Consumers crave their ecommerce purchase as soon as they have placed an online order. Quick-turn delivery goes beyond same-day shipping and brings an order ETA down from days to hours, if not minutes. To deliver on availability to promise (ATP) in this format, retailers will need to anticipate who will want what, when, and where they’ll be.
Subscriptions: The U.S. subscription ecommerce market has grown more than 100% in five years. In an Oracle survey, retail execs were asked: “When you think about innovation in ecommerce, where would you focus if money or time were not an issue?” In response, 33% of US execs (27% of global execs) would like to focus on Subscription/Curation Service technology. For consumers, subscriptions offer convenience, but retailers reap the bigger reward: consistent, recurring revenue.
Retail as a Service: With an online survey or an in-person consultation, retailers - like Stitch Fix - are learning shoppers’ styles and delivering curated assortments in the mail or in-person, along with suggested shopping lists and easy means to repeat past orders. Retail as a Service (RaaS) simplifies shopping for the consumer by cutting down the time spent browsing and gives retailers the chance to build strong and enduring customer relationships.
Rental as a Service: Even for customers with the time to shop, not everyone has deep pockets or closet space. One way to solve the problem is through the shift from owning to renting. Delivered as a subscription rental service or per-occasion rental, like Rent the Runway, this retail setup allows consumers to check out the clothes they need for the month or a special occasion and then return them.
Global Reach: International borders are no match for determined shoppers in search of the perfect product. Nearly half (47%) of U.S. shoppers have purchased from an online retailer, and the share is even higher in Europe (71%) and Canada (83%). Retailers must carefully consider the potential repercussions of catering to a global market for their operations and inventory.
The challenge comes after choosing a new format to test out. To keep pace with these new ways of retail, established brands are testing new and unusual operating models to keep up with demands while maintaining business as usual. There are key things retailers should keep in mind when deciding to try out a new retail format or catering to a new market.