It’s Time to Rethink the Outdated Store Concept

in-store concept

As a Product Manager for Bringg, I get a chance to meet with clients and deeply understand their biggest challenges, needs and pain-points. The boom in e-commerce and the implications it’s having in the entire industry took many retailers by surprise – many of which without the foresight or tools to modernize their infrastructure.

During a recent business trip to meet a Bringg customer who specializes in retailing electronic appliances, I had the opportunity to visit one of the stores alongside their Head of Deliveries – the one responsible for managing and optimizing their delivery logistics processes and infrastructure. Upon arrival, we both had a major ‘aha moment’ with the sudden realization of a deep transformation that has taken place over the past few years. A transformation which has completely redefined the delivery landscape, and yet, hasn’t been matched or even reflected in the locations of most physical stores.

The traditional retail experience over the last century has focused on local people seeing the merchandise, choosing what they want to buy and leaving the store with their purchase. In the case of larger items such as furniture or white goods, they would expect delivery from the store which would rely on its inventory, or inventory from its local warehouse/supplier. Today, the experience has completely changed. Stores are often seen as showrooms for customers, with an increasing number of orders placed online – something which is not only more comfortable, but also gives shoppers the chance to compare prices across the web.

Advances in technology and delivery logistics means that replenishment systems have evolved enormously. While once upon a time retailers had to wait for a weekly or monthly delivery of goods, many stores are now replenished every day to avoid stock rupture. In addition, local stores receive the orders that need to be delivered for the day, acting to an extent as a temporary warehouse or fulfillment center – something which these spaces were never designed to do.

Warehouses are purpose-built to receive large quantities of goods, which are staged according to delivery routes and shipped as soon as drivers arrive. Warehouses require optimized space for staging and proper docks enabling quick loading and unloading of the vehicles. Thes facilities and tools are not available in most stores, and with the growing use of retail locations as pick-up and drop-off points to cope with the demand of online orders, it is something which needs to be addressed.

In the not-so-distant future, stores will have to evolve and besides selling products, they’ll need the capacity to better handle warehouse staging, picking and shipping. In addition, retailers will have to consider reducing their stock in-store, especially those who with the advantage of daily replenishments. The road to operational efficiency definitely will require for most retailers to rethink the role and the structure of their stores, so they’re future-proof with the necessary set-up to deliver goods to their customers and conquer the last mile.

Serge Lazimi