Top tips for retail tech: Where high street fashion could leapfrog ASOS

James Robbins gives his top tips for retailers to exploit technology to gain an advantage over the competition

Working in the technology space in the retail and logistics sector during CoVid 19 could well have been the busiest time of my career.

Decision times have been dramatically accelerated whilst investment budgets have been reduced. Programmes have been fully reviewed and the strategy has been torn up and rewritten to planning horizons with more uncertainty than ever. On top of this the priority, as always, has been to keep the lights. In my contract at Parcelforce Worldwide this meant moving a 500 seat contact centre to a virtual solution and supporting a dramatic increase in parcel volumes to a much more dispersed delivery footprint.

Having worked in the retail logistics space for several years now, the I have built up a network of retail CIOs and through a series of events organised by Ampito ltd we have been discussing with C suite Tech members from Nando's, River Island, ArrowXL, Nuffield Health, BMW, Boohoo, Adidas and Marks and Spencer's the key elements of IT strategies for the new normal.

In the new normal clearly retailers with an online presence, like ASOS have been huge winners during the COVID-19 lockdown and look set to make hay. However, as the online experience consolidates many leading thinkers are starting to think more orthagonally and realising that user experience alone is not the only key to success. You need superb integration with your supply chain and delivery partner too, and think more of an end to end customer experience.

There are three elements to business IT strategy that are worth thinking about investing in and where the retailers could think beyond the standards achieved by online retailers.

1. CLOUD INTEGRATION WILL DELIVER BETTER CX

Managing stock whilst it's in flight and being tightly integrated with your delivery partners tracking solutions are also critical particularly if you are keen to avoid "waste" from unnecessary contact from your customers wondering when their parcel is coming.

Too many logistics partners are set up with fantastic six sigma processes, boasting of 99 per cent completion but have no process for dealing with the "unhappy path", which can be in the hundreds of thousands for many retailers. But having worked with thousands of clients from my time at Royal Mail and ArrowXL I have learnt that the ultimate question is not where is my parcel - its when is my parcel coming. So few people have processes to answer this question effectively without costing fortunes.

I've learnt that customer frustration with when is the parcel coming accounts for as much as 80 per cent of all retail contact today. As volumes increase retailers should invest in message handling platforms such as Dell Boomi or Mulesoft and some time and labour into managing the final mile delivery partner more closely to ‘event' conditions. An unhappy path can occur from the checkout to the front door and the ‘event' could be logged in any number of systems. No robot or AI can fix broken process.

Customers may ask "where is my parcel?" But they actually mean "when is my parcel coming".

Can you afford to pass the buck to the delivery partner for your customer experience? This is the age of cloud integration and this problem can be and has been solved.

Personal experience and a quick google search shows that this is equally a weak spot for pure play and high street retailers a like and an opportunity for someone like Primark to close the gap on as they move into the digital space.

Cloud integration tools have evolved to the point where they have, ‘out of the box integration with multiple e-commerce, warehouse management, order management, shipping and delivery solutions from Magento and Manhattan to Oracle, SAP and Paragon. This can save millions in implementation costs and consulting around point to point integration. At Parcelforce alone we had integrations into 80+ different platforms.

A recent implementation at ArrowXL took just three months to deliver on behalf of a major drinks client thanks to open source cloud integration tools.

2. Logistics Solutions in the Cloud will reduce the cost of stock management and realise more efficient delivery costs

Whether you are selling hot chickens, hot pants, hot stone massages or hot wheels people are ordering more stuff than ever to their front door and will continue to do so beyond COVID-19.

Online retailers are setup for this already and delivery partners have tried to fill the gap with solutions for high street retailers. What many people have discovered during lockdown was that many high street retailers knew where there stock was in terms of stores and warehouses but setting up systems to move the stock from wherever it was located to the customers front door in this set up was time consuming and inefficient.

Many high street retailers set up their original online solution like it's a separate store so when the high street stores were closed they couldn't sell all of their stock even when they desperately wanted to! In the rush to change systems and move stock locations many retailers lost as much as a weeks trading through being unable to sell stock.

As the next-day delivery market in the UK nears peak capacity one thing to consider is the management of stock through the supply chain. It is estimated that during Black Friday Week as much as £1 billion of stock is in the supply chain, so being able to manage this in your warehouse management system as stock for sale before it hits the warehouse, could drive out millions of pounds of financial efficiencies and increase sales. Being able to offer customers efficient delivery according to stock levels could drive out higher purchase rates ie. selling stock before it hits your warehouse by using an end-to-end supply chain and delivery integration platform such as Mulesoft and Dell Boomi alongside a Manhattan or JDA. According to the Baymard Institute, 70 per cent of purchases are abandoned before the checkout rather than at the checkout. This leads to the conclusion that many believe; availability of stock as opposed next-day delivery slots is the key factor in missed sales.

Many digital retailers have a centralised warehouse solution and are well integrated to their supply chain but they don't offer choice of day delivery, knowing the stock re-order point and offering longer lead times by having greater delivery flexibility could enable retailers the time to move stock and sell it whilst its in flight, thus reducing end to end lead times and increasing sales.

3. CLOUD RETURNS

Online retailers have failed to replicate the factory outlet experience of the high street as a model for dealing with non seasonal and returned stock. It maybe that the cost of this process for throwaway fashion retailers such as ASOS and Primark are prohibitive but there could be an opportunity for 3PL or final mile delivery players to create a market place.

I am not sure if anyone has tried to review the landfill or charity shop impact of low cost fashion retailers but I am aware of several high street retailers which have been urged to reduce their landfill impact by consumer champions such as the ethicalconsumer.org.

Combining warehouse management solutions with open source e commerce technology and integrations tools like magento and dell boomi could provide a platform for integration with shippers like Royal Mail and Parcelforce or ArrowXL to introduce more bespoke returns processes and operate more efficient stock management / redelivery processes.

One innovative idea would be to create intrapeneurial brands that act like factory outlets online where the stock could be managed by a third party logistics company; "in flight" returns could be sold as factory seconds before they made it all the way back to the retailers warehouse.

Similarly the high street retailer who operates with a fleet of outlet stores could have all returns diverted straight to the factory outlet with an integrated B2B solution such as can be provided by someone like Parcelforce, should platform capability exist. I am aware of similar solutions being available at big and bulk provider ArrowXL who deliver from warehouse to shop and shop to shop for a well known soft drinks vendor.

Conclusion

In conclusion whilst online pure play retailers such as Boo Hoo and ASOS have the benefit of a smaller technology debt and no overheads from a portfolio of high street stores, there are opportunities for other retailers to consider in order to leapfrog ahead once they have matched the user experience of these successful digital leaders. More tightly integrated solutions from supplier warehouse to front door would reduce technology debt (and cost) but more importantly support a more efficient delivery model and improve customer experience. These are now mature solution stacks used by some of the best logistics companies but have not yet found there way into mainstream retail. Surely these will become hygiene factor investments like UX in years to come.