Retail’s Next Normal: The Inexorable Rise of the Agile Store
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Prior to the last decade, retail was primarily built on two basic assumptions:
Customer journeys began and ended in the store
So retailers began seriously investing in their store experiences. And after a decade of fundamental redesign in support of the omnichannel shopper, they finally reaffirmed the store as the centerpiece of the integrated shopping journey.
Price and availability drove sales
An Aptos iPaper with research and recommendations from RSR Research
While the one-size-fits-all operating model is highly optimized and scalable, it is not built with flexibility in mind. And today, consumers are better-informed than ever, and every shopping journey is unique, requiring unprecedented flexibility.
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Then COVID-19 hit, and anxious and locked-down shoppers once again forced more fundamental changes to the store experience. The pandemic also underlined an important principle: the store experience has to stay in sync with how consumers discover, select, pay for, and take possession of products.
So, as we enter our ‘next normal’, we must recognize that significant store changes aren’t a once-in-a-generation event – they are now as fundamental to retail as forecasting and planning. To survive, stores must find ways to become inexorably adaptable and agile.
Those assumptions led many retailers to perfect a one-size-fits-all operational model that featured highly standardized assortments, a mostly self-service consumer experience, and supply chains built to optimize economies of scale.
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This iPaper has been developed in collaboration with Retail Systems Research, and together we endeavored to help retail enterprises respond, react and adapt their store experiences to constantly shifting market conditions.
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The store in the digital age
SECTION ONE
The underlying challenge…
SECTION TWO
Clearly, it’s time to consider a new path forward…
SECTION THREE
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2010-2020: The store began to evolve
Many retailers evolved their store experiences throughout the last decade by focusing on shopping as entertainment:
But (apparently) there was no hurry to evolve
As recently as 2019, close to 85% of all retail transactions still originated and ended in the store. Hence, many retailers thought that they had more time to modernize than it turns out that they had. And perhaps unsurprisingly, in 2019 RSR found a relatively underwhelming commitment to technology as an enabler – even among retail winners.
Winners
Others
47%
43%
48%
34%
55%
42%
56%
59%
40%
68%
Technology creates competitive advantage and new sources of revenue generation
Technology is essential in making our employees smarter
The store should be more fun and easier for customers
We want to put actionable information into the hands of managers
Technology's primary role is to help control operational costs
Technology needs to change more quickly as customer tastes change
Pre-Pandemic Priorities: 2019 Retailer Attitudes
The need for speed
Today, there is no longer any question about the need for speed. Overnight, the pandemic changed consumer shopping behaviors in several important ways. Most notably, consumers immediately began to expect buy online, pickup in store (BOPIS) or pickup curbside, and they did so in big numbers. Some retailers reported huge increases in e-Commerce orders as a result of BOPIS, and one source reported a 500% increase in BOPIS orders.
Read our iPaper analyzing pandemic-influenced expectations and trends in the last mile of the shopping journey.
One source reported more than a
increase in BOPIS orders in 2020
500%
Bringing digital content to the stores
Localizing assortments and presentations
Increasing the “service footprint” by experimenting with assisted selling and omnichannel fulfillment
Source: Digital Commerce 360
Source: Retail Systems Research
Overcoming legacy tech
The underlying challenge lies in the fact that existing application portfolios in most retail shops are rigid and out of date, expensive to maintain, and – in the end – differentiating in a negative way. RSR’s 2019 benchmark report of the state of innovation in retail, completed in just a few short months before the pandemic struck, identified the now-familiar bogeyman, “Legacy technologies make it hard for us to innovate” (Figure 3).
58%
Legacy technologies make it hard for us to innovate
Top organizational inhibitors that prevented retailers from innovating before the pandemic
Continuous promotional activity has cut into our discretionary budgets
51%
Exacerbating (and accelerating) existing challenges
When the pandemic struck, it greatly exacerbated those challenges associated with the inability to innovate. Not only did every store need to consider how to add BOPIS to their experiences, many also needed to figure out how to bring many of those orders curbside. New processes had to be designed overnight, and for those with legacy technology, the execution of those processes was often flawed, inefficient and frustrating for both associates and shoppers.
So many challenges, so little time
The pandemic also forced the need for fast changes to many other aspects of the store experience:
Mistakes are more costly than ever
Shoppers instantly became extremely intolerant of mistakes, and their loyalty was at far greater risk with every transaction than it had ever been before. Every store experience that was inhibited by technology (rather than enabled by technology) became a threat to future shopping visits and a competitive weakness.
Caught off guard and struggling to adapt
Those who had been slow to innovate before the pandemic (perhaps believing they still had more time), were caught completely off guard. Their inability to innovate added to the already massive challenges brought about by lockdowns, traffic limitations and social distancing mandates.
Read our iPaper examining curbside pickup trends and success stories
1. 2. 3. Just to name a few.
Spring inventory was frozen and needed to be moved, moth balled or marked down. Returns processes had to be re-thought. Contactless payments went from interesting to invaluable overnight.
Returns processes had to be re-thought. Contactless payments went from interesting to invaluable overnight.
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Disruption is the new normal
Going forward, we'll likely see far fewer seismic disruptions, and instead we will see more frequent, smaller challenges that will force us to constantly evolve the store experience. In this new climate of constant change, agile solutions will be critical to retail's ability to evolve and keep pace.
Microservices fuel agility and flexibility
Fortunately, there is good news on the technology front. Modern, commercially-available business applications have come of age, and are increasingly available in exactly the same way that consumer apps are – as services. These new microservices can be added, enhanced, extended and deployed extremely quickly – the very definition of agile technology.
Thriving on change
Microservices-based platforms dramatically affect how application portfolios can be built and extended – in a way that satisfies retailers’ needs for speed and flexibility – as well as consumers’ demands for a digitally-enabled selling environment filled with choices.
The days of months-long development cycles followed by beta tests and pilot programs are over, and they have instead been replaced by agile solutions that can quickly adapt to changing market conditions, functional requirements and shopper expectations.
Enable flexibility and speed. Enable agility.
Aptos has always focused on helping our retail clients to engage customers differently. In today’s dynamic environment, that means constantly, quickly innovating to address changing consumer expectations for modern shopping experiences. Aptos ONE takes our core mission into the future of retail, by creating a microservices-based platform built for change. It is the most robust, flexible and scalable technology platform in the industry, leveraging Aptos’ long legacy of retail capability leadership alongside a revolutionary and patent-pending approach to modern, cloud-native solutions. You need to transform your business, fast. Visit our web site to learn how Aptos ONE can help you create an enterprise built for change.
Clearly, it’s time to consider a new path forward...
Learn more about Aptos’ approach to microservices
Learn more about how Aptos ONE can help you create an enterprise built for change
Aptos is the largest provider of enterprise software focused exclusively on retail. Our cloud-based Singular Retail™ solutions are trusted by over 1,000 retail brands in over 65 countries. With industry-leading omnichannel commerce and merchandise lifecycle management solutions, we help retailers develop dynamic and responsive assortments, streamline operations and deliver integrated, seamless experiences… wherever shoppers choose to engage. More than 1,300 colleagues share our collective passion for engaging customers differently, and we are committed to developing relationships built on trust and tangible value by partnering with our clients to create agile retail enterprises that are built to thrive in an era of constant change. Learn more at aptos.com
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