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Retail Operations 2020: Time to Manage Outside of the Box

Barely 20 years ago all retail operations took place in high street store formats. Then cross channel happened, and now Covid-19, and efficient retail operations are utterly transformed.

In the early years of this century, brand retail operation felt like paradise. Store networks were growing globally and being an expanding head of retail was a fun job. Managing high street stores, factory outlets, concession stores and flagships, having CEOs promote direct to consumer growth, and even the CFO was happy. All that was needed for retail operation was easily organised and within the store ‘boxes’. But soon brand stores encountered mighty antagonists.

Retail Operations 2020 H&M

H&M at Times Square – A ‘box’ that needs to be well managed to generate profits (Photo: Brand Pilots)

Retail Operations 2020 Are Determined Outside of the Box

It was 10 years ago that heads of retail operations began to realise that this minor thing called the internet was eating into their sales growth. What at first looked like a small challenge by New Millennium youngsters turned serious when those teens became heavy spending consumers and messed with retail operations by forcing cross channel services upon high street stores.

Cross channel services were fancy but a hell of complexity and a nightmare for store productivity. And as even the most advanced brands demonstrated, not easy to get right.

Retail Operations 2020 Cross Channel

Instore click & collect services took up high value retail space and had store personnel taking care of returns instead of creating sales (Photo: Nike)

By the time a reasonable cross channel service was established, the number of store processes had grown and taken a toll on efficiency. Then came Covid-19, and with it the need to reinvent retail operations yet again.

The crisis is not over and the future remains unclear to many. What is already clear, however, is that the processes before and after a store visit are becoming more important than ever. Is my favorite store open today? How long is the queue going to be? Will they actually have the size I came for? Can I browse in peace or will I be rushed to leave to serve the next in line? Many concerns that easily take the fun out of shopping.

Retail Operations 2020 Urban Outfitters

Queues outside a store are not new to retail (Photo: Brand Pilots)

Many of those concerns are not new at all, but post Covid-19 they are serious sales hurdles all year round. Best practice line management, a retail operations key success factor only on Black Fridays, now needed every day.

Time to look what best practices in retail operations 2020 will help to organise a store efficiently.

Best Practice Retail Operations 2020

1. Line Management

Definition: Best practice line management is the way a store handles customers’ waiting time.

Commentary: Waiting in line is what all of us hate and every store clerk will have a long list of ideas how to entertain waiting consumers. But most cost either personnel hours or money. In times where we don’t have money to spare, best practice line management pays directly into store sales.

Retail Operations 2020: We have seen pragmatic low-cost features as simple as a sign saying “5 minute wait from here”, or offering a bottle of cold water to those waiting in line. But we have also seen store personnel consulting with a tablet on availability and where to find what when entering. That’s not only nice to have, but pays directly into store productivity. Consumers who know the desired item is not available in their size won’t waste their in line and can give their place to others.

Retail Operations Birkenstock

Birkenstock Düsseldorf serves waiting customers with instore information (photo Rudolf Bartels)

2. Retail By Appointment

Definition: Best practice retail operations in 2020 is avoiding queues by offering store appointments via online booking.

Commentary: If you consider that even your small local restaurant offers some form of online reservation but retail doesn’t, you realise something’s amiss. But to be fair, up until recently there was no need as doors were open any time.

Retail Operations 2020: We haven’t seen “book your retail entry slot in advance” yet but it will come for sure. The fancy version “book a personal shopper” already exist in luxury stores. But our approach is different and suggests a low cost app where consumers book their guaranteed store entry ticket to skip the queue this coming Saturday.

Retail Operations influenced from home

Jump the queue from home (Photo: Brooke Cagle)

3. Entry Tickets

Definition: Retail in 2020 requires an entry ticket – a mask, that is. But those tickets don’t come for free and aren’t usually available at the store entrance. Tough luck should a customer decide to pay the store a spontaneous visit and not carry a mask.

Commentary: Pre-covid, impulse shopping was the key success driver for most brand stores. A well-made window easily created 75% of the in-store traffic from the street in front of the store. In 2020, spontaneity has limits and impulse sales have dropped significantly. If a casual visitor does not have a mask or forgot to bring it, bad luck for the retailer. The need to first go buy a mask in a nearby drugstore stifles any spontaneous shopping impulse.

Retail Operations 2020: We have to admit that we still haven’t seen the practice of retailers handing out masks at the entrance. Nor a window promotion telling consumers “come in, we provide you with a free mask”. Perhaps now that public health systems around the world have a mask oversupply, retailers may want to buy some stock and hand out free retail entry tickets. And if it’s only the free mask a customer came for, it still pays into the brand experience and maintains the opportunity of impulse shopping.

Retail Operations made in 2020 -a Mask Dispenser

Flavura Maskomat, not everyone has mask dispenser in store (Photo: Brand Pilots)

4. Individual Store Communication

Definition: Staff’s in-store communication, waiting line communication, the store facebook page, accurate opening times on Google, and so on are all individual store communication.

Commentary: Pre-covid shopping was on impulse, spontaneous and didn’t require much planning. Now stores maybe closed on Mondays, have divergent opening hours, launch collections a few weeks later than expected, and your size may not necessarily be in stock. Retail operations in 2020 therefore require more individual communication to avoid losing sales to online entirely.

Retail Operations 2020: Again, the tools are there, but have not been heavily used. Starting with a stores Google Maps profile, the opening hours, contact number and photos and can be updated in seconds, much faster (and used more by customers) than your own store locator. And the stores’s facebook page is another great way to communicate. Add two posts about new arrivals every week, and you will gradually create a fan base. While all this is low maintenance and takes less than 2 working hours per week, it’s a pragmatic way to manage customer traffic.

Retail Operations 2020 - not without a Facebook page

Uniqlo Oxford Street’s Facebook page (Screenshot 17.08.2020)

5. Ship from Store

Definition: Your pharmacy does it and every restaurant provides it too. It’s time that you offer local ship-from-store services.

Commentary: Home delivery used to be a rather exclusive feature of luxury brand stores. For everyone else there was no need or no cost-efficient way to provide it. But the pandemic experience has changed consumer’s expectations and perspective. “Can you send this to my home” is becoming a must have service.

Retail Operations 2020: Don’t make it, buy it. With food delivery services ever more popular, delivery services popped up everywhere. They tend to be heavily occupied around dinner time but have free capacities during daytime. Retail Operations 2020 means to line up a hassle-free home delivery service.

Retail operations delivery

Retail home delivery made in Münster, Germany (Photo: Leezen Heroes)

Wrap-Up

Until around 20 years ago, retail operations meant managing 100 core processes right. Internet and cross channel came and added 30-40 processes and store productivities dropped significantly if we didn’t watch out. In parts it is still too early to forecast how brand retail will change exactly. But one thing is abundantly obvious, retail operations in 2020 don’t look the same as in 2000.

With line management, ship from store or retail by appointment, you might easily add processes, much more complexity and cost, if not organised in a smart way. If you don’t watch out, you may find your store survived the lockdowns only to perish from excessive store complexity a year later.

As for retail operations in 2020, consumers understand and forgive many mediocre shopping experiences. But 18 months from now, when we are “back to normal”, experiences and expectations will have grown. Good Covid-era services will have become ‘new normal’ expectations. It is now that you create your path to retail operations 2025, the best practice of coming years.

 


About the Author:

Rudolf Bartels has cultivated a passion for efficient retail operations throughout his entire retail management life. Keeping stores simple, smooth, cost efficient and profitable was almost like a religion to him. Today, when coaching retailers, he feels with store managers, but also sees an opportunity to re-invent retail. Guido Schild

2 thoughts on “Retail Operations 2020: Time to Manage Outside of the Box

  1. Barbara says:

    Very useful for planing our christmas shops…Thanks alot, Barbara

  2. Diana Smith says:

    Hello,

    Well thanks for sharing with us !!!

    great

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