Retailers adjust to deliver purely online Black Friday
Craig Summers, Managing Director, Manhattan Associates, UK&I, highlights the importance of effective omnichannel technology capabilities in offering consumers a great online experience over this Black Friday and Cyber Monday weekend
Since Black Friday hit the shores of the UK in 2010, ONS statistics from the last ten years show that online spending during the month of November has steadily increased year-on-year to the point where it hit 21.5% of the UK’s entire retail spend in 2019.
Whether it’s life under lockdown or simply managing the associated risk of COVID-19 at a store, warehouse or distribution centre level, the events and restrictions of the last nine months have significantly changed not just consumer behaviour around the globe, but also the way retailers have been forced to respond to these shifts.
With the spending habits of millions of people moving online out of necessity over 2020 (ONS statistics from May 2020 showed that one third of all UK retail spend was conducted online), the closure of stores will not cause as much disruption to retailers this coming Black Friday as would have in 2010.
Making the most of Black Friday
While the shift to ecommerce has provided many retailers with a lifeline amidst store closures, it does not come without its own challenges, that if not managed effectively, can have implications on already squeezed profit margins.
In the run-up to Black Friday, Manhattan Associates conducted research with YouGov to find out a little more about the mood of the British public, how they plan to spend their money this year, and subsequently, what retailers need to have in place from a technology perspective, in order to cash in on this year’s anticipated online surge.
The survey of 2,000 consumers across Britain found that almost two thirds (63%) of online shoppers are either fairly or very likely to visit a physical store after having a great online experience with a brand, and that almost half (46%) will surf for Black Friday deals and pay using their smartphones this year.
While the research is a ray of light for British retailers and shows how a great online experience can and (hopefully) will transcend into physical footfall, more importantly, (from a technology perspective) it highlights the pivotal importance of effective omnichannel capabilities for retail brands.
Key omnichannel tech capabilities
It’s capabilities like being able to check in-store stock before visiting a shop from any type of device, or the ability to deliver a variety of click-and-collect options, that all retailers will need to look at seriously, if they are to succeed over the Black Friday weekend and beyond into 2021.
When asked specifically about this year’s Black Friday events, the research rather unsurprisingly found that value for money (69%) and cheaper online deals (48%) were the two primary factors behind online purchasing decisions, but these were closely followed by the speed of delivery, which nearly two-fifths (37%) deemed important.
Speedy and reliable delivery, plus the restraints of a second nationwide lockdown will add pressure to delivery networks and supply chains over coming days and weeks. However, many retailers will have learned from the initial challenges experienced during the UK’s first lockdown and should be more prepared for this crucial time of the year.
Contrary to popular belief however, rather than the last mile, it’s actually the first mile of the process that ensures the speed of delivery and profitability of an online sale.
Prioritising the first mile
From click-to-dispatch, the first mile represents the journey from the point at which a consumer places an order, to the time that it is picked, packed and dispatched, including every aspect of the supply-chain process that makes this possible.
While the past six months have seen a number of challenges for retailers, two fundamental areas stand out as fundamentally important to speed of delivery as a consumer driver: the warehouse and inventory visibility.
Understanding people and product movement have traditionally been the key indicators of warehouse performance and employee efficiency, but in the socially distanced world of warehousing, brands have had to rely more on their warehouse management suites to help maintain the efficiency of the click-to-dispatch process far more.
Whether it’s limiting numbers of workers in specific zones; using swipe keys rather than touchscreen keypads or increasing shift rotations to maintain picking efficiency and productivity, the technology that operates a warehouse during the first mile of a product’s journey from click to dispatch has never been more important.
Matching supply to demand
In terms of inventory, if you have got it, you should be able to sell it, no matter where in your network an item is. In practical terms however, this simple concept is far more complicated to achieve.
Modern cloud native solutions for order management and omnichannel fulfilment that can scale up quickly enable a single view of inventory: what is available to sell; where it is in the network; what is allocated to a customer; who the customer is and how they want to receive it.
Coupled with developments in machine learning and AI, these advances can help retailers ingest far more rich data than ever before, and better predict peak demands around singular events like Black Friday or even the longer-term effects of pandemic restrictions.
This, in turn, allows retailers to be more effective in allocating inventory from across their entire store and warehouse networks, which clearly has a positive effect on bottom-line profits.
Furthermore, consumer conditioning towards ecommerce and the ongoing demand for a variety of delivery services such as buy online pickup in store and curb-side collection, has led to a growth in micro-fulfilment centres, which has simply increased the reliance on accurate inventory for retailers still further.
The 'new normal'
Many of the developments and innovations that have come to the fore over the course of 2020 are likely here to stay well beyond COVID-19. And, while Black Friday, is going to look and feel very different this year, it will be interesting to see if this ‘one-off’ shift becomes the norm in years to come.
Whether it’s inventory management and visibility of stock; smarter warehouses or new micro-fulfilment centres; curb-side pickup, or omnichannel capabilities, the challenges to retailers associated with ecommerce are very real and will need to be met head-on in 2021 if retail is to bounce back as we all know it can.
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,066 adults, including 560 who plan to shop online this Black Friday. Fieldwork was undertaken between 30th October-2nd November 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).