Bringing the best of Online into the High Street

WHITEPAPER

01 Introduction

Contents

02 Learning from the Online World

03 Finding a Solution

04 Delivering on the Vision

An HSO-commissioned survey carried out in early 2019, polling the views and opinions of the UK public, revealed that UK consumers were decidedly lukewarm about the prospect of online retailers setting up bricks and mortar stores.

01 Introduction

Less than a third (29%) of UK consumers

say they would like to see leading online

brands such as Amazon and ASOS establish

a physical presence on the High Street.

Yet, the survey also revealed that bringing the best of the online and in-store worlds together does offer the potential to rejuvenate the more traditional bricks and mortar retail environment.

Surveyed consumers expressed an interest

in High Street retailers bringing a wide

range of elements of online shopping

in-store. When asked which of a range of

options they would like to see retailers

move from online to in-store shopping,

consumers tended to highlight options that

both accelerated the purchasing process

and made it more convenient for them.

More than a third (38%) of the sample

referenced ‘use physical sites as centralised

pick-up points for online orders’, while more

than four in ten (42%) cited ‘introducing

technology to speed up the buying

process in-store (e.g. using sensors to track

items and automatically charge these to

shoppers’ accounts when they leave the

store).’

The most popular option, however, referenced by 73% of the sample, was ‘having screens in-store that ‘allow you to quickly browse what stock is available of a certain item, where to find it and enable you to place orders too’.

Learning from the Online World

The survey found that shoppers were most

attracted to going online by the broad

choice available. Well over half (59%) of

respondents referenced ‘breadth of product

range’ as a reason for using the online

service offerings of leading digital brands

over those offered by traditional High Street

retailers. Moreover, when asked to name

the main aspects of online shopping, as

opposed to shopping in-store, that make it

appealing to them, more than half (53%) of

the sample cited: ‘I have access to a much

greater variety of products’, while 38%

highlighted the ability ‘to buy a product at

any time’.

While acknowledging the advantages of the

online world in these respects, consumers

do still believe that there is more retailers

could do to enhance their online offering

in these areas. In response to the question:

“What areas of the online shopping

experience do retailers most urgently

need to improve?”, two of the top four

answers spoke to this need. 31% referenced:

‘improve stock availability levels’, while,

supporting this answer, 29% highlighted

‘provide a faster, more efficient delivery

process’.

All the above underlines the importance of retailers having a wide range of stock in place and keeping levels topped up, both in the online and physical ‘bricks and mortar’ environments. It is especially key

on landmark shopping occasions like Black

Friday and Boxing Day, where demand is

higher than usual. Nearly two-thirds of the

respondents, (61%), referenced: ‘ensure a

broad range of stock is in place and quickly

replenished’, when asked what retailers

could do to their customer service offerings

on these days to make them buy more from

them.

This emphasis on stock, points to two of the biggest but least heralded benefits of online shopping – the breadth of stock on offer – and its high level of availability.

02

The next most popular option, ‘introduce

bargains and discounts a week or two

before the event’, cited by 39% of the

sample, again relies on retailers being agile

enough to keep stock levels replenished

and fully topped up.

At all times, though, it is important for retailers to have a breadth of stock continuously available both online and in-store. Part of this is a straightforward

drive to reduce churn and enhance

customer loyalty. Running out of stock

is a big no-no for retailers, especially in

the online world where consumers have

higher levels of expectation about stock

availability and convenience is most highly-

prized. The survey shows that retailers are

likely to pay a significant penalty for this.

When buying an item online, if the

retailer is showing it to be out of stock but

suggesting that stock is available in a store

for collection, consumers’ preferred option

is always to source another retailer online,

no matter whether the item is clothing, a

consumer electronics or DIY product, or a

toy or a game.

It is also true that having a wide range of

stock continuously available acts as the

key foundation layer, enabling retailers

to make additional promotions and offers

on top that both encourage consumers to

buy more and, in some cases, personalise

those offerings to their needs. More than a

quarter of respondents (27%) referenced:

‘deliver personalised promotions and

purchase recommendations direct to

customers’ mobile phones while they shop’,

when asked to name elements of online

shopping they would like High Street

retailers to bring in-store.

“Having a wide range of stock continuously available acts as the key foundation layer, enabling retailers to make additional promotions and offers that encourage consumers to buy more”

Across this white paper, we have

looked at the benefits that retailers

can potentially tap into by bringing the

best elements of online retail into the

in-store retail environment. To do this

effectively, however, requires retailers

putting in place a coordinated systems

architecture, typically based on enterprise

resource planning, with elements of

customer relationship management (CRM)

functionality.

But different kinds of retail services will, of

course, require different kinds of solutions.

Each retailer’s success in delivering the kind

of personalised service offerings discussed

in the last section will, for example, depend

in no small part on how effective they have

been in attaining a single version of the

truth across their organisation. Nowadays,

when a customer walks into a shop, it’s not

unusual for them to be armed with more

information than the store assistants. A few

taps on their mobile phone can tell them

about pricing, promotions, stock levels and

what competitors have to offer.

03Finding a Solution 03

A unified digital platform of this sort gives

users all the information they would need

to make faster, data-driven decisions. Being

able to track and analyse real-time data

as it moves through their business allows

retailers to achieve improved forecasting

and planning and greater insights into each

business unit.

Moreover, the insights and predictive

intelligence that a combination of ERP and

CRM can deliver enables retailers to give

customers a more personalised experience

across all channels, including social media.

Already today, advanced analytics is bringing

the power of machine learning to today’s

retail challenges, enabling predictive,

optimised, and personalised insights that

lead to growth and profitability. And thanks

to machine learning, companies can begin

to anticipate customers’ requests and

desires, positioning themselves to build a

stronger relationship by tailoring offers and

interactions to each specific customer.

Technology solutions like enterprise

resource planning (ERP) can also be critically

important in enabling retailers to more

efficiently coordinate and manage their

stock. Traditional siloed approaches to stock

management no longer cut it in today’s

increasingly digitally connected world. ERP

can give retailers complete visibility of their

online and instore stock, allowing them to

see what items are selling well and therefore

help inform the development of new product

lines in the future.

To ensure that sales operatives are just as informed as their customers, all of the interconnected information

about the customer’s engagement with the store, previous purchases, likes and dislikes and preferred modes of

purchase needs to be brought together in one place to provide a complete and accurate picture. Central to the

retailer’s version of the truth is where the customer is buying, what they’re buying and how they’re buying.

With this knowledge, managers can make more insightful, strategic decisions about the business and better inform

their teams across units and departments as to how to improve the individual

customer experience and how to personalise the service they deliver.

But more than this, it can also help

guarantee they always have enough stock

in place to meet customer demand across

both online and in-store worlds, while

ensuring they don’t overstock and end up

marking products down.

Retailers increasingly need to look at

putting in place technology that allows

them to coordinate and integrate their

stock management approaches across the

online and physical store environments

– in truth, the retailers who ultimately

succeed will ensure this process is

seamless for the customer who in fact,

should never be told that a product is

out of stock online and always offered an

alternative way to purchase in-store.

As none of the stock is ring-fenced, but

instead distributed on a ‘first come,

first served’ basis, this approach allows

businesses to satisfy orders across all

channels more easily. Moreover, the

ability to receive regular updates based

on sales throughout the day also gives

retailers confidence that the pool stock

figure is accurate. This in turn allows them

to manage the implications on forecasting

future sales and predict long-term stock

replenishment needs.

In the retail world, where convenience is especially highly-

prized, quality of service is increasingly measured by how

quickly retailers can deliver what the customer is looking for.

Having a narrow product range on offer, or worse still, running

out of stock altogether, will always result in lost business. No

stock effectively means a missed sale.

Online retailers like Amazon generally know how important this

is. Bricks and mortar retailers increasingly know this too, but if

they want to compete in the future, they need the right systems

in place to make that theoretical awareness a practical reality.

Delivering on the Vision 04

Is your retail business ready for the future?

Contact us to speak to one of our retail experts

to find out how you can future-proof your reail

business with HSO and Microsoft Dynamics 365.

Contact HSO

Get in touch:

info-uk@hso.com

+44 (0)20 3128 7767

1st Floor Enterprise Point, Altrincham Road | Manchester, M22 9AF | T +44 (0)20 3128 7767 | info-uk@hso.com

Since 1989, HSO has been a Microsoft Solution integrator and has become a successful ICT company with more than 650 employees and offices in Europe, North America and Asia. HSO supports local and international companies in retail, wholesale distribution, manufacturing and service with their digital transformation journey. The foundation for this is Microsoft Dynamics 365: A complete platform of CRM, ERP, Office 365 and BI software. HSO takes care of the implementation, optimisation and 24/7 support of these cloud solutions. HSO belongs to the Microsoft Dynamics Inner Circle and is proud to have been named the ‘most customer-oriented Microsoft partner’.

More information about HSO can be found at www.hso.com. Follow us on Twitter via @HSO_Tweets.

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