This article was originally published by Loic Euzen from AutoStore and Guillaume Mullier from adameo.
What will stores look like in the future and what supply chain will they use? The analysis of Loic Euzen from AutoStore and Guillaume Mullier from adameo.
E-commerce sales have increased by more than 50% since the beginning of the health crisis. At the same time, nearly half of French people still buy as much in stores as on the Internet. These consumer trends, which are likely to continue, highlight the impact of logistics on the proper functioning of stores and, more broadly, on the reputation of brands. With consumers looking to move seamlessly from one channel to another (from store to mobile app to Instagram page), the traditional model of inventory management and delivery no longer holds. Companies need to rethink their logistics and bring inventory closer to consumers, so they can deliver faster and cleaner. Many retailers have already adapted and know how to combine in-store sales and e-commerce. Their supply chain now has a key role in improving the shopping experience they offer.
Consumers expect fast, personalized and responsible shopping experiences
Consumers (across all generations) want a product available everywhere, right away, with delivery times and locations that fit their lifestyles. They expect an omnichannel shopping experience, i.e., one that is seamless between digital and physical, simple and personalized. Another unavoidable observation: retail customers are increasingly inclined to consume in an eco-responsible way. They are looking for brands that take into account their ecological impact from the design of the products to their delivery. Retailers must therefore redouble their imagination to control carbon emissions while offering innovative shopping experiences, as shown by the emergence of immersive, digital and intelligent showrooms.
What does the store of the future that would meet all these expectations look like? It's a store in the heart of downtown, with a maximum number of items on display, offering 24/7 Click & Collect, allowing easy return of e-commerce packages... and all this in more optimized spaces. It responds to customers' needs more quickly and simply. Thanks to the automation of the stocks, the salesmen lose less time in the management of the shelves and can be more sales advisers. This store, or shopping center, allows customers to choose a product on the spot and have it delivered later, at a low carbon cost since the last few kilometers are covered from urban area to urban area with soft mobility.
Finally, the stocks of the different stores of the same brand are connected and updated in real time, in order to reduce stock-outs. The store takes its place in a seamless world between brick & mortar and digital. The new logistics solutions available on the market guarantee this transformation and a simple, fluid and fast shopping experience. 76% of logistics professionals who want to start a major transformation as a result of Covid-19 will invest in technology2. The supply chain has actually become the backbone of the entire customer experience. It is the supply chain that keeps up with the pace of e-commerce imposed by the large global marketplaces. It is also a lever of differentiation for the most famous brands as well as for small retailers. And finally, it is this that combines economic and environmental performance.
Overhauling urban logistics and upgrading stores
To make this store of the future and this new way of "shopping" a reality, retailers must review the entire distribution chain and rethink store space. To be able to deliver in D+2, D+1 or even in H+5 without adding empty trucks on the roads, it is necessary to bring the stocks closer to the consumers. As delivery (or collection) has become a fundamental aspect of the purchasing act, guaranteeing the customer promise requires better control of stocks. Stocks must be denser and closer to city centers, in mini urban warehouses or directly in the stores. No more large warehouses on the side of highways that slowly send polluting trucks to the cities!
While the death of stores has long been announced, why not transform them into 2-in-1 spaces that serve customers on the spot and are starting points for fast deliveries? But how to do this when urban real estate is scarce and expensive? Densify and automate! Innovative logistics solutions are redefining urban logistics and the shopping experience. Densification and automation of storage are at the heart of the retail world's challenges by freeing up space in stores. In order to save time and space, retailers have every interest in setting up automated micro-picking systems in their existing stores. These warehousing systems are modular, hybrid and agile to adapt to all small volumes (even 50m2!) and to all store configurations.
Mutualize to allow small merchants to access e-commerce
This type of system strengthens the performance of the entire merchant sector and is not reserved for large retailers. By pooling automated storage spaces (urban "dark stores"), click & collect points and delivery methods, small retailers could more easily enter the highly competitive world of e-commerce and meet consumer expectations. Of course, this near but still idealized future will require a change of paradigm and mentalities. It will be necessary to accept to share spaces with other more or less competing merchants, or even with second-hand sales platforms between individuals... It is at this price that all the actors will be able to satisfy the increasingly demanding consumer-citizens.