Consumers score big during Cyber Week as retailers pivot big

By | 4 minute read | December 10, 2020

Like the Ghost of Christmas Past, doorbusters on Black Friday became the story of yesteryear.  And, while the holiday shopping season is shaping up like no other, the clear winner of Cyber Week was the consumer.

Consumers significantly increased holiday shopping online, but often picked up their orders in-store or at the curb – never having to forgo a Cyber Week deal. They influenced a major shift in buying behavior – avoiding busy department stores and respecting social distancing guidelines by using contactless services like curbside pickup and lockers.

At the beginning of the year, many retailers saw the urgency caused by the pandemic and rapidly accelerated their digital transformation roadmap to accommodate growth and unpredictability in online sales. They shifted to cloud and enhanced their digital experience, sometimes transitioning stores to online fulfillment centers in only a few months.

Changes in buyer behavior continue to provide a preview of what the store of the future might look like – perhaps an online fulfillment center that accepts walk-in traffic. And for some retailers, the physical store could become the e-commerce powerhouse by offering same-day delivery, improved customer satisfaction and the potential for exponential growth. The ability for retailers to have a platform that can quickly pivot to handle volume is essential.

Retail stores become fulfillment centers

While brick-and-mortar was potentially a hindrance to growth, the pandemic has turned physical stores into the heroes of fulfillment. Many traditional retailers have undergone a radical transformation, including upgraded or new technology, revamped process workflows and employee training to support new order management and fulfillment tactics in their stores.

Buy online, pickup in-store (BOPIS) has been a fulfillment channel available for many years and utilized in the last few years by only a handful of large retailers. The pandemic catapulted the demand for – and use of – this service. The technology that empowers retailers to offer BOPIS, as well as curbside pick-up, same day delivery and other capabilities, grew exponentially in 2020. Smart retailers quickly adjusted and amended their digital services that align with evolving customer preferences.

In addition to BOPIS and curbside pickup, the need for greater flexibility saw many stores evolve into fulfillment centers so they could ship-from-store (SFS). SFS can not only reduce costs by shipping to customers who live closer than they do to a traditional distribution hub, but it can also help mitigate the risk associated with the busy transportation and logistics sector, particularly during the peak holiday season. It’s a customer satisfier and potential cost saver.

Many leading retailers are now leveraging a cognitive analytic engine that enhances their existing order management system in an effort to drive more volume to their stores, balance workload and provide more accurate delivery dates to customers. When a distribution center is overwhelmed with the bulk of sales volume during peak demand, delivery days and customer service are directly impacted. AI-infused technology enables retailers to understand and act on changes in the market as they occur and strike a perfect balance between protecting margins, utilizing store capacity and meeting delivery expectations. These sourcing decisions can dramatically increase profits, especially during peak periods.

Being able to have a clear, real-time picture of inventory is key to the above fulfillment capabilities. Smart inventory management ensures that retailers understand demand and can appropriately stock store locations to have just enough inventory to satisfy customers’ requests. Conversely, having too much stock means retailers run the risk of markdowns or deadstock – there’s a very low margin for error as the ability to ‘say yes’ to customers is the hallmark of a great brand.

Versatile technology is critical for managing peaks

IBM helps retailers get ready for their ‘big’ event – whether it’s back to school, a flash sale, or even the Superbowl. In preparation for this year’s holiday season, IBM worked with customers who were anticipating upwards of 50% increase in their Cyber 5 per-hour order line workloads. Retailers that planned and worked with their technology partners were undoubtedly the most successful last week. And, having a cloud-based solution like IBM Sterling Order Management, means that peaks can easily be satisfied without any overall service deterioration. That type of flexibility and adaptability is crucial during unprecedented times like we are experiencing.

Looking ahead

Traditional lines are blurring everywhere. What were historically siloed sales channels, eCommerce and brick-and-mortar stores are now unified as extensions of the other. Likewise, a busy month of holiday shopping, kicked-off in early October, has morphed into an elongated holiday shopping experience intended to relieve extreme 1-day demand on retailers.

While the remaining weeks of the holiday shopping season will no doubt prove to be a trying time for retailers, they also represent an opportunity to delight consumers and gain their continued loyalty in the new year. Organizations can find a way to thrive by ensuring a global, accurate understanding of inventory, elegantly leveraging stores as a key part of the fulfillment strategy and improving the agility and resiliency of their supply chains through new technology like AI and hybrid cloud.

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