Building A Strategy for Retail: Navigating The Next 12 Months

As physical retail locations reopen under new restrictions, dealing with everything in the present makes it difficult to spend time strategizing for the future. Looking ahead at the next 12 months, a couple things will be key to improving retailers’ chances at thriving: don’t panic, plan; accept this “new normal plus”; and build contingency plans ASAP.

Investing in ecommerce, planning for what’s in your control, and anticipating customer needs will build a critical foundation for retailers to recover and grow over the next 12 months.

Don’t Panic, Plan and Adapt

The COVID pandemic has wreaked havoc on businesses. It’s important not to panic, and instead look for the silver linings and opportunities that will become more clear over the next 12 months. To take advantage of them, don’t lose sight of your upcoming business cycles. It’s important to revisit product launches, promotions, and campaigns with merchandising, marketing, supply chain, and commerce teams. This cross functional planning exercise will reveal risks and opportunities, and allow teams time to pivot, plan, and address them before it’s too late.

At Lucidworks, we’re learning that many retailers are struggling with supply chain, both in manufacturing and distribution. When inventory is low and replenishment is delayed, it doesn’t make sense to promote or feature those products. However, part of adapting is finding ways to keep conversions high. Are there other suppliers? Substitute products? Dropship? Consider the different options available to deliver what your customers expect and drive your bottom line.

Despite everything going on, avoid the urge to hit the panic button on the upcoming holiday season. There’s still time to plan and adapt! Owning holiday comes in two forms; first, address your merchandising and supply chain as noted above, second, audit your technology. Create a roadmap to tackle low hanging fruit and solve for larger core issues plaguing the shopping experience. Clean up product data, resolve 404 reports, tune the search engine, optimize checkout (and returns!), and make sure your infrastructure can support more traffic than last year. Prioritizing wins across these aspects will ensure you’re prepared for the superbowl of commerce, and thereafter.

The New Normal Plus

“Plan and Adapt” is a great strategy to approach the next six months, the “New Normal.” Budgets are tight, economic and societal factors are fluid, and there is no margin of error for operational mistakes within retailers’ control. But what about the future? As retailers begin to develop more thought-out survival strategies, they’re choosing either „back to basics“ (hunkering down and cutting costs) or a „new normal plus“ mindset (doubling down on ecommerce and innovation).

In the “New Normal Plus” it’s time to double down on digital innovation. 12 months from now, no one is going to say “man, I really wish we hadn’t invested in our website.” Below are a few places where it makes sense to invest in digital innovation over the next year.

Improve Product Discovery

Upgrade your product discovery platform, including search, browse, and recommendations, to help your customers find what they’re looking for. Now is the time to kick off these projects if you haven’t already. Recent developments in advanced search algorithms can predict customer intent and capture and interpret feedback loops of user signals, plus, machine learning can automatically improve the search and browse experience to unburden your IT department. As shoppers become more sophisticated, teams become more lean, and retailers are forced to digital-only touchpoints, it’s time to double down and stop losing valuable conversions from poor commerce experiences.

Amp Up Your Chatbot

One of my favorite examples of how chatbots can improve the digital experience is at Restoration Hardware (RH). The RH experience usually involves interacting with interior designers in the gallery and building out your dream living room or bedroom. When stores had to close due to COVID, RH turned to chatbots to support shoppers. Designers were standing by to help with design services, material selection, and product questions. Unfortunately, not every retailer has the personnel to power this. Instead, consider investing in chatbot enhancers that use natural language processing (NLP) and AI to support customers. Smart chatbots can help customers help themselves, while relieving call centers and cutting support costs.

Get Creative With Omni-Channel

BOPIS, BOPAC, STS, SFS, CPU…. Omni-channel flexibility comes in many forms. The most important version, today, is curbside pickup (CPU). This solution is three fold: leverage your stores as distribution points, reduce freight expenses, and impress your customers with instant gratification. For example, earlier this year Guitar Center quickly doubled down on CPU to keep their customers happy, move store and warehouse inventory, and make sure sales were still rolling in while shopping as we know it was on hold.

All things considered, it’s not realistic to tackle all of these before the end of the year. Take your 12 month roadmap, identify your priorities and double down.

Stay Ready

The only thing constant in retail is change, and change creates opportunities. To execute on these opportunities you need the right people, process, and technology. Remember those contingency strategies we said we’d build earlier? Let’s make sure we do that.

Whether it’s driven by the pandemic or the holiday season, you’ll likely experience more commerce business than you can handle in the next 12 months. Unfortunately, selling more than you planned will put stress on other areas of the business, potentially jeopardizing a positive customer experience. As you see this challenge arise, are you flexible enough to incentivize customers to select slower shipping? Can you ramp up your digital commerce? Can you shift orders to stores? Can you build relationships ahead of time to support drop ship options from your vendor partners?

Don’t panic. Plan, adapt, and double down. The next 12 months will be full of curveballs and if you can pivot at a moment’s notice you’ll be at the front of the pack.