New Year, New Month, New Digital Budget

By now, many of you have already met with your Tech teams to lay out your tech roadmap for 2021.  The challenge of planning during a pandemic is significant. Shopping patterns have changed at lightning speed as have customer expectations. As we move into 2021, here are some tips to consider:

  1. Look back and learn:  Take time to review the Key Performance Indicators (KPIs) of your business from 2020 as well as your revenue and expense performance.  Where did you meet and exceed plans? Where did you miss?  As you look at 2021, do the learnings from that diagnostic indicate any change in priority or direction?  A quick digital diagnostic can help identify issues and actions early enough in 2021 to make an impact.
  2. Drive revenue and reduce costs with omnichannel: The pandemic accelerated ecommerce growth in the US in 2020, with online sales reaching a level previously not expected until 2022.US ecommerce sales are projected to hit $794.5 billion in 2020, up 32.4% year-over-year. That’s a much higher growth rate than the 18% predicted earlier in the year. eMarketer forecasts 2021 to be another year of strong, double-digit (15%) growth for ecommerce sales.Consumers will continue to avoid stores and opt for online shopping amid the pandemic. Consider omnichannel initiatives that can accelerate revenue and, at the same time, reduce costs.  Now is the time to act to have programs launched and refined before peak 2021.
    1. BOPIS: With BOPIS adoption expected to reach 90% penetration in 2021, store pick-up has become a fundamental service for customers, along with contactless services like curbside and same-day delivery. Here are some BOPIS benefits:
      • Margin improvement with accelerated store sell-through
      • Store traffic: incremental store sales will typically add upsells at POS, increasing basket size
      • Market share: an opportunity to stand out amongst competitors
      • Reduction in freight cost to consumer
      • Potential reduction in warehouse pick cost
      • Customer retention: enabling customer to transact where and how they want to buy
         
    2. Ship-from-Store: With Ship-from-Store, you have the opportunity to increase efficiency and profitability by strategically funneling orders to stores to fulfill and ship within local markets. Retailers and Brands are getting creative with utilizing stores as hubs for extending their reach as additional distribution centers, increasing speed to delivery in local markets. Best Buy and Walmart are both testing models that turn stores into fulfillment hubs (source: RetailDive article).
    3. Endless Aisle: Endless Aisle, or Save-the-Sale, refers to the concept of enabling in-store customers to virtually browse and order a wide range of products that are either out of stock or not sold in-store. The customer also then has the choice to have the items shipped to the store or their home. It’s estimated that 10% of online and in-store orders are lost due to items being out of stock. One-touch access to the inventory of a network of stores or warehouses at any retail outlet reduces the potential of losing sales, especially if fulfillment capabilities can match customer expectations.
  3. KPIs:  As you look to complete your year-end assessment and diagnostic to identify issues and opportunities, take the time to review your dashboards and ensure that you have performance metrics that will identify opportunities and prompt action.
    1. Know the core KPIs and have dashboards in place to track performance and trends:  Make sure that you are tracking “the usual suspects” (AOV, conversion, traffic, bounce rate, ROAS, customer acquisition, NTF, etc.). Look at your trends and match metrics to industry or vertical performance. Identify point-solution opportunities early in the year to ensure maximum return during peak.
    2. Expand your horizons: In 2020, there was significant discussion on freight cost and the ability for carriers and retailers to manage the uptick in volume. Were you prepared?  How did freight costs, one of the highest web expenses, shape up at year-end compared to your plan? As you refine your dashboards for 2021, consider adding some key performance metrics:
      • Shipping Costs: What are your freight costs as a percentage of sales?
      • Split Shipments: How many and how often? What is pushing this cost driver up?
      • Store Service Levels Related to Omnichannel: Do you have visibility, and how are issues addressed?
      • Inventory Accuracy: What can you learn from in-store inventory results to apply to the management of BOPIS thresholds, in order to minimize order cancellations and customer dissatisfaction?
      • In-Stock Inventory: Do you know your in-stock position on key items online and in store?
      • Site Search Performance: Are your customers finding what they are looking to buy?
    3. Keep yourself protected: Lastly, and not so glamorous: are you monitoring fraud performance metrics and addressing issues?  With more first-time customers amid surging online sales during the COVID-19 pandemic, fighting ecommerce fraud is harder than ever.  Do you have reporting visibility in place?

We are here to help with your digital diagnostics and the development of your omnichannel roadmap and execution plan. Don’t forget to leverage FitForCommerce’s resources.

Written by: Kathy Kimple, Chief Retail Offier