Commerce Trends

by Manhattan Associates

Reflecting on the seasonal shopping struggle

From reading the news this Christmas it was clear that some retailers were comfortably capitalising on the festive retail boom, while others were disappointing customers and leaving shoppers’ stockings empty.

Spending on Black Friday in the UK was 50 per cent higher than expected – and with that came delivery delays as retailers and delivery providers were simply unprepared for the number of orders they took.

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Black Friday not only caused a huge retail boom in terms of a shopping frenzy in store, but also online. By 6pm on Black Friday, nearly half a million orders had been made online. The quantity of those orders creates complexity in its own right. With such high volumes of sales being made online, the percentage of returns will also increase. People are so desperate to nab a bargain that they order multiple sizes and colours, safe in the knowledge that they can return them through multiple channels and free of charge.

Research by Manhattan Associates found that the average shopper returned 13 per cent of their purchases this festive season – and 65 per cent of those returns went back through the store. This leaves retailers with a logistical nightmare. They need to focus on making returned items available on the shelves again as soon as possible while they are still desirable. This is all the more important for fashion retailers that have a high element of seasonality, otherwise, goods quickly go ‘out of fashion’ and are destined for the discount rail.

Providing shoppers with a seamless retail experience isn’t just important in-store and online – it extends to the returns process as well. With the average shopper returning 13 per cent of their Christmas purchases  – almost everyone returned goods at some point or other, and ultimately, it’s just another aspect for retailers to be judged on. The same study by Manhattan Associates found that a quarter of people have boycotted a retailer following a disappointing festive delivery experience.

Customers simply will not stand for poor delivery or returns services – they’re impatient and time poor. There is no doubt about it: retail supply chains are being pushed to the limit. Next day delivery is the new normal – which implies retailers need a premium service to meet customer demands and stay competitive.

With shoppers being more impatient than ever before, retailers have to work harder to make a sale. By far the most effective way to administer a seamless multi-channel experience for customers is to have network-wide inventory visibility. If an item isn’t in stock at a customer’s preferred store, the retailer can see where it is quickest to have it shipped from for a collection later that day. This allows the retailer to profitably fulfil an order as quickly as possible, and maximises the chances of retaining that customer’s loyalty. But, it works both ways – returns are a race, the sooner that retailers can get goods back into the supply chain, the highest likelihood that they will be able to sell at full price. By having that network-wide inventory visibility, they will also be able to identify where those goods are selling best at full price, and have the products shipped there to maximise on sales.

To fully satisfy customers during 2015 and over the next festive period, retailers need to offer a plethora of fulfilment and returns options. To do this, retailers must have real-time visibility and complete control over all inventory within their network. Retailers with a bricks-and-mortar base are well positioned to win the multi-channel battle – as a local presence allows for a tight order turnaround and for returns to be quickly integrated back into the supply chain – and businesses that can’t fulfil at speed and keep their promises to customers will ultimately fail.