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For Some Retailers, the Strategy Is Clear—But Can They Execute?

Making shopping in stores as easy as shopping online sounds great, but delivering the experience to customers is a lot more difficult than journalists may think.
By Mark Roberti
Sep 05, 2018

On Sept. 3, the New York Times published an article titled "Hard Lessons (Thanks, Amazon) Breathe New Life Into Retail Stores," which says store traffic is up. The writer states, "Stores that have learned how to match the ease and instant gratification of e-commerce shopping are flourishing, while those that have failed to evolve are in bankruptcy or on the brink."

The article goes on the point out that "Target's shoppers can order sunscreen or a Tokidoki Unicorno T-shirt on their phone, pull up to the parking lot and have the items brought to their car," Nordstrom shoppers can return items by "dropping their items into a box and walking out" and Walmart uses 25,000 personal shoppers "to select and package groceries for curbside pickup." The writer notes that all three retailers reported stronger-than-expected sales growth for the most recent quarter.

These three retailers are on the right track, and those who had spread fears about a "retail apocalypse" were hyping the news of store closings (though the fact that more than 10,000 stores have closed since the beginning of 2017 is not insignificant). But suggesting conventional (brick-and-mortar) retailers have solved all their problems is also overstating things.

Target has done a good job of enabling omnichannel retailing and modernizing its stores to bring shoppers back in—but executing on a true omnichannel strategy is not easy. Inventory accuracy in most retail stores is around 65 percent. In some categories, it may be as low as 30 percent, according to studies conducted by Auburn University's RFID Lab.

The lab has worked with dozens of retailers exploring RFID solutions, and it has found, anecdotally, that store associates are successful in picking items that have been ordered online only 35 percent to 60 percent of the time. Consequently, it takes two to three days to fulfill an order, rather than two to three hours. Given that Amazon delivers goods within one or two days to its Prime members, two or three days to get an order delivered from a local store isn't good enough.

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