Retail downsizing: Less space, less inventory
There is a revolution in small-format food and grocery retailing occurring internationally, led by the world’s top retail chains. Tesco is the leader in this retailing revolution with its Tesco Express grocery stores in Europe. Walmart and of course, Carrefour are increasingly becoming major players with small-format grocery stores like Walmart Express and discount centers, Carrefour Express, Carrefour Market and Carrefour City. That’s the top three retailers in the world.
The U.S. big-box retailer Target has 1,797 stores. 1,789 of them are of a standard configuration: usually built from scratch, located mostly in the suburbs, and averaging 12,000 square meters in size. The other eight are something else altogether – smaller, more urban, less uniform. Urban markets are the last frontier for big-box retailers. Cities are growing faster than suburbs and exurbs for the first time in decades, and they are generally populated by younger, more free-spending residents, as well as college students and tourists. Smaller stores also make economic sense in the era of online shopping. Everybody is downsizing.
Getting small and urban can however, be more difficult than getting big. Finding the right locations in downtown areas is more challenging than in the wide-open suburbs. The logistics of stocking stores without massive loading docks are complicated. Merchandise has to be selected carefully to fit smaller spaces. A wider range of products can only be offered through catalogs. Customer service has to be improved too, because shoppers have many other choices nearby. When someone asks for an item, employees have to “walk the guest”. They have to be able to source an high-end appliance or device outside the store, or find a Grand Cru wine and pair it with the cheese.
Big box locations have their challenges too. Shoppers’ expectations and behaviors are evolving, driven by both the economic climate and increased access to information through technology. Consumers are more connected than ever to brands, merchandise, and their fellow shoppers. The proliferation of channels and media outlets for retailer-consumer interactions has forced retailers to approach national and international expansion from a multi-channel perspective. Even in developing markets, people are increasingly willing to research or purchase online. As the SKU numbers reduce in the stores, customers are offered a wide range of products online. Growth in e-commerce and mobile commerce outpaces physical retail in nearly every market, demonstrating that the Internet is a challenge to bricks-and-mortar operations, as increasingly expert consumers entering the stores.
Don’t pay the sales force to watch TV!
Lastly, retail talent is a crucial differentiator. Attracting and retaining talented workers is a core component of success for retailers in developing markets. As consumers become more sophisticated, the retail talent pool must keep up… but often does not. Retail, more than other industry, is finding it more challenging to attract and retain skilled workers. The new generation joining the labor force is vastly different from just 10 years ago in terms of the opportunities and the workers’ values and workplace expectations. Cheap labor is not always of a good caliber, or stable, and the available labor is not always what you need.
The Ogloba solution
Smaller format stores, reduced inventories, expert consumers, unstable workforce… The ROPO system helps Ogloba’s bricks-and-mortar clients to meet these challenges by facilitating labor time-savings and increasing the expertise of the less stable and reduced sales force, by optimizing the space in smaller stores and centralizing Multi-Channel Inventory Operations, increasing the appliance return, and reducing the cost of operations with better inventory management. It improves customer loyalty and enhances the trendy retail image, while also improving vendor relations. On- and offline channels are unified, the cheap and unstable sales force looks more professional and guides the customers during the acquisition. More skillful salesmen are supported by an extended range of products to meet the customer increasingly higher expectations.
“Digital in Store”
The Digitalization of the acquisition process improves the fluidity of the buying experience with an integrating “Digital in Store” strategy. Stores are also interconnected and a Cross-Channel Strategy can be developed. KPIs information can circulate based on real time information. The number of products displayed is increased with lower overall operational costs. The impulsive buying in store in maximized by levering good deal, promotion, loyalty programs, services and after sales.
The beauty of the ROPO solution is that it is suitable for premises of all sizes. The system takes up very little valuable retail space, and allows retailers who do not have the space to include a dedicated TV or electronic consumer goods department, to offer their customers a fully stocked “digital” inventory.
This revolutionary ROPO solution can do much to boost your retail business. For more information about how it can help, please read our detailed overview:
Download (1.7Mb): ROPO Solution White Paper v1.1 (English)
Download (1.2Mb) : ROPO Solution White Paper (中文)