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02/03/2022

Lessons of 2021 are Key to a Better Future for Retailers

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If hindsight is 20/20, then retailers know exactly what it will take to drive success in 2022 and beyond. Though 2021 was a year of unprecedented volatility, creating new and complex business challenges for retail leaders daily, it was also a year of unprecedented innovation. Every new problem led to the creation of a solution that will likely simplify retail operations and improve the shopper experience forever.

For example, social distancing drove retailers to introduce or scale self-service tools, curbside pickup and home delivery services at an unpredictable pace. And labor shortages led retailers to embrace technologies that will ease – and speed up – tasks for those who have been working hard on the front lines to pick up the slack.

Instead of just giving associates mobile devices with a few select apps, retailers enhanced the devices with software tools that direct every associate action. They now know when to be at work, what tasks they need to complete throughout their shift, and how to address unexpected issues or customer inquiries.

Additionally, retailers started to realize that email, task lists and one-on-one push-to-talk (PTT) calls alone wouldn’t keep teams in sync or fulfillment flowing smoothly. They needed full telephony capabilities to field customer calls and reach colleagues across the store or at nearby stores or warehouses. They also needed locationing pins that could confirm where associates were working in each moment. Rebalancing labor throughout the day has become a standard practice that will likely stick around for the long haul. Like certain supply chain shortages and shipping issues, the labor gap is going to linger.

Where does that direct retailers’ focus in 2022?  

Toward technology that…
• Helps them better see, and prepare for, the future. Prescriptive analytics have been helping retailers identify and react to issues in real-time so they can avoid losses. However, retailers would love to avoid these issues altogether. That's why I expect most will spend 2022 trying to hone their predictive capabilities, with their attention turning to artificial intelligence (AI) and machine learning solutions that can go beyond forecasting to provide “crystal ball” level foresight. When they know what’s coming, they can make better decisions and take immediate actions to improve outcomes and essentially alter the future.

• Enables them to manage and move inventory more effectively, no matter what ends up on their shelves. Though the distribution network is being faulted for empty shelves, the reality is that retailers are solely responsible for revenue performance. So, they must figure out how to make the best of what they receive in 2022 and ensure they aren’t self-inflicting losses. If they’re forecasting demand based on sales, but sales are down because stock was sitting in the backroom versus on shelves, then they will be making inventory stocking and sourcing decisions based on false demand levels.

A traditional demand planning process would recommend throttling back on that SKU because it looks like sell-through is low, when in fact sales would meet or possibly even exceed demand if store operations had been better executed. So, retailers will turn to both predictive and prescriptive analytics solutions to understand why sales may have dipped. This, in turn, will help them improve revenue performance, even if the upstream distribution network issues remain stable. They’ll be able to make decisions more dynamically and frequently.

• Better meets the needs of store associates and shoppers. This trend won’t be driven just by the desire to improve retail store execution, though. Consumers confirmed in Zebra’s latest Global Shopper Study that they can usually find information faster than associates. The responses revealed that customer satisfaction ratings aren’t currently as high as retail decision-makers believe them to be, either.

To keep up with both demand and expectations, associates will need to work more collaboratively and prescriptively. So, retailers that were hesitant to spend money on new mobility solutions for associates will have no choice but to consider the addition of intelligent task management and dynamic communication apps – at a minimum. There aren’t enough workers for all that must be done in stores, warehouses and distribution centers each day, and retailers can’t delay same-day order fulfillment when half the staff calls out sick.

All they can do is find a way to augment labor and automate as much as possible, including staff scheduling, task assignments, and even decisions about where to go next and what to do once there. Retailers who do this successfully will make managers and associates more “available,” even on the busiest days – and freeing up staff, even when short-staffed, will be especially critical in 2022.

We know from the Global Shopper Study that consumer demand for self-service options will continue to grow – and retailers will try to accommodate the demand. But adding more kiosks, self-checkout, pickup lockers, or vending machines will backfire if associates aren’t also given the technology they need to quickly answer questions, accept payments, or retrieve items. Even the most self-sufficient shoppers say they still want associates’ help in stores.

Plus, any attempts to improve click-and-collect and returns services by redesigning physical store layouts will fall flat if there aren’t enough associates at those new “fast and easy” pickup or returns stations. Equally devastating would be associates who are ill-equipped to process pickups or returns quickly.

The Bottom Line
The pandemic was disruptive to retail’s modernization plans, but it didn’t necessarily set retailers back. Even as new supply chain issues, staffing shortages and shifting consumer behaviors continued to emerge, retail wasn’t shocked into stagnation. If anything, it was given the freedom to accelerate investments and implement long-overdue changes that will elevate the contributions of front-line staff and improve how inventory is planned and executed in stores and the broader supply chain.

That’s why forward-looking retailers won’t be so quick to put 2021 behind them. They’ll embrace it for what it was: an opportunity to better understand the market, introduce new revenue channels, reset store operations and lay a foundation for a more shopper-defined retail experience. And this will set them up nicely to win in 2022 and beyond.

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