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How to Make a Next-Generation Store a Right Now Store


Over the next three years, outdoor lifestyle apparel retailer Toad&Co. plans to open 20 new brick and mortar stores.

With news of store closings by powerhouse brands likely swirling around in your head, you may be tempted to make sure you read that number correctly. It’s been dizzying for sure. So why would an apparel retailer be looking to expand its brick and mortar footprint in this environment?

Santa Barbara, CA-based Toad&Co. lives by a simple truth: People enjoy shopping and being in the store, and still want that experience. They just don’t want it to be disconnected from the rest of their purchasing journey.

“We don’t believe brick and mortar is dying,” explained Kelly Milazzo, VP of operations for Toad&Co. ”But we do believe that the consumer expects, and will soon demand, a seamless interaction with the brand.”

Despite the news, people still want to – and still do – shop in stores. According to the U.S. Census Bureau, in a $5 trillion US retail economy, e-commerce sales make up some 8% of that annual revenue. That holds true for Toad&Co. – whose e-commerce sales are a growing part of its business, but still stand at only about 25% of its total revenue. It relies on sales of its sustainably sourced clothing and outdoor wares in 850 stores of B2B partners, spanning small main street shops to retail giants like REI, plus four of its own stores.

But that desire to physically enter a store is bumping up against the complexity consumers face when they realize they can’t easily return something they bought online. Or they can’t get the same price for something they saw on the website. Or they can’t order something in the store and have it shipped to their home.

Consumers’ patience wears thin as they increasingly expect that these types of experiences should be standard. Smart brands like Toad&Co are evolving their stores to meet customers’ expectations and needs – and leveraging technology to help them build next generation stores, now.

What’s a Next Generation Store?

A next generation store no longer serves as simply an instantaneous purchase space – and needs to be viewed from the lens of the digital consumer and her digital buying journey. Above all, the experience can’t leave the consumer with the feeling that visiting the store was a waste of time, and that she should have just stayed at home and browsed online.

A next generation store is an innovation center. It’s a testing lab, or a help desk. It’s a place where the consumer can easily return something they bought online, or order something that isn’t in the store and have it shipped to their home.

Above all, it doesn’t add complexity to the shopping experience – it removes it. The same promotions and the same prices are available online and in the store, and the consumer feels that it is simply an extension of a buying experience that, say, began by clicking on a promotion in her email.

How to Enable a Next Generation Store Now

Evolving your legacy brick-and-mortar strategy to meet the demands of the new retail paradigm demands:

A single view of customer, order and inventory. A reliable, 360-degree view of customer, order and inventory data is a springboard for outstanding customer experiences.

Let’s take having an end-to-end view of inventory data, for instance. You can’t sell something to a customer you can’t reliably promise, and you can’t optimize in-store inventory without reliable data on what was sold and what’s still on the racks. Ensuring product inventory is transparent across channels – including between stores – enables you to turn stores into fulfillment centers where buy online, pick-up or return in store and order in store and ship to home experiences are easily enabled.

And by having an end-to-end view of inventory across the supply chain, you can better optimize inventory levels according to unique store profiles and needs.

In turn, unified data ensures all promotion and marketing messages are consistent across channels. It allows dynamic merchandising in the store, better upsell and cross-sell opportunities.

POS devices that drive engagement. If the POS system in your stores is strictly viewed for its merits to complete a transaction, you might as well start shutting those doors now.

Next generation POS systems are point of engagement systems, and empower sales associates with information to solve a customer’s problem. Do your associates have access to data on inventory across channels and stores in a real-time, easily consumable format – to provide the customer with the particular buying experience she envisioned when she crossed through those doors? Can associates trust that the prices and promotions on their screens are consistent across channels – to reliably promise an item to the customer at the price she expects? And can they process an order for an item that isn’t in the store, quickly and reliably? Integrated POS and order management enables the ultimate ecommerce goal – buy anywhere, return anywhere and fulfill anywhere.

Sales associates that focus on the bigger picture. In next generation retail stores, sales associates will make or break the customer experience. The best associates won’t simply be focused on selling an item that is available at that moment in their store, instead, they will be focused on procuring a deeper relationship between the customer and the brand by solving that customer’s problem.

They need the tools – and must trust the data — to deliver on that imperative. Can they see all of a customer’s purchases across online and offline channels? Can they easily access information about inventory in other stores and online, and complete an order in a matter of seconds before a consumer starts to rethink the purchase or consider other options?

Ensuring that next generation retail associates can do their jobs in this new reality also requires reexamining retail metrics in general, and aligning compensation models to fit with the needs of the digital consumer. Incentives need to be based on more than just sales in the store, but reflect work toward fostering a long-term relationship with the customer.

Embrace the Next Generation of Brick and Mortar Now

The fear of embracing and expanding a brick and mortar strategy as part of your retailing goals is greatly reduced when you can trust your data. Cobbling systems together doesn’t result in an end-to-end view of your business, and you’ll waste time on ensuring the data is consistent, rather than being able to leverage data in real-time to interact with customers consistently – as Toad&Co. has achieved with a unified platform for inventory, order, customer and financial management.

“We have real-time visibility into the business and customer, and we have the ability to focus on what we do best – making great clothes,” Milazzo said.

Matt Rhodus is retail industry solutions principal for Oracle NetSuite Global Business Unit, a leading provider of cloud-based omnichannel software that helps retailers transform commerce by seamlessly connecting every step of the business—e-commerce, POS, CRM, order management, inventory, merchandising, marketing, financials and customer service.

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