Connected stores: Solving the logistics puzzles of fashion commerce
In a fiercely competitive digital landscape, fashion brands are on the lookout for new ways to get ahead of the competition, reach consumers, and convert them into loyal audiences. One way that brands are doing this is by implementing connected stores.
Connected stores offer consumers a seamless experience across online and in-store shopping, with features such as endless aisles, click-and-collect, same-day shipping, pick up and return in-store, and show store inventory online.
In this article, we’ll run through a few common concepts associated with connected stores and explain the advantages your fashion brand can benefit from by using this strategy.
Why connected stores matter
The rules of physical retail are changing. Physical retail is far from dead – JD Power’s recent survey confirms physical stores still account for 63% of all sales. However, more and more consumers are embracing the convenience and safety of ecommerce. According to the State of Fashion report and survey by McKinsey, engagement with in-store technology can lead customers to spend up to four times longer shopping than customers who simply browse.
Why should connected stores be a key consideration for fashion brands?
Sixty percent of European consumers still prefer shopping for fashion in brick-and-mortar stores because they can touch and browse products. Experience shoppers, who expect stores to offer holistic and personalized shopping experiences that integrate physical and digital elements, spend 40% more in a single visit.
Connected stores help gather mountains of customer insights
Connected stores generate tons of consumer data. IoT solutions, RFID, computer vision, and other technologies combined with offline shopping experiences provide retailers with a constant stream of valuable consumer insights.
Connected store technologies help cater to experience-driven shoppers
The in-store experience should be a priority for luxury players, as their customers expect brand immersion within stores. Experience-seeking fashion shoppers, who use mobile apps to personalize their visits and like it when a brand uses compelling storytelling, expect stores to offer unique experiences, social connections, and entertainment.
Convenience-driven shoppers expect mobile apps that integrate digital and physical shopping experiences. Zara’s customer app, for example, allows shoppers to book fitting rooms, see available stock, find products on the shop floor, and join a virtual queue to complete a purchase. Apps of this type should integrate seamlessly into the customer journey, and their backend technology can be built on existing inventory management and point-of-sale programs.
It is worth noting that some in-store technologies like magic mirrors, connected hangers, and interactive holograms – originally seen as solutions to declining footfall and store engagement – have not really caught on. Their high installation costs and low actual impact on in-store conversion render them largely ineffective.
But rather than focusing on flashy, gimmicky in-store technologies alone, fashion brands should mainly invest in connected commerce tech that addresses the key operational pain points and solutions that integrate seamlessly with in-store customer journeys.
Connected stores help solve the complexities of fashion commerce logistics
Research shows that 20% of customers are dissatisfied with online delivery and returns. Such concerns could be addressed through micro-fulfillment technologies and systems that help to integrate stores into distribution networks. According to Adobe Analytics, BOPIS retail orders have grown 208% amid the pandemic.
Connected store technologies can help to reduce associated costs by up to 90%. With micro-fulfillment, brands can easily process orders from stores, greatly reducing associated costs by up to 90% and adapting to today's quick-commerce environment.
The fashion and apparel industry is the most likely beneficiary of turning stores into distribution networks. This is due to the incredible complexity of fashion products when compared to other types of products.
It’s an untenable assumption that each store should stock multiple products in all its different sizes, colors, and styles. A men’s shirt can have many unique attributes, such as size, color, style, fit, and collar type. Storing multiple items of each shirt is expensive and logistically unreasonable. But shirts are not an exception here – the same level of complexity exists in bras, jewelry, and other apparel products and accessories.
Ecommerce businesses should integrate all sales channels to create a robust fulfillment ecosystem where customers can order online but have it picked, then packed and delivered from a local bricks-and-mortar store – and returned to another store if needed.
How connected stores help streamline supply chain operations
Here are some ways in which connected stores can impact the fashion ecommerce supply chain:
Faster deliveries: Connected stores can help retailers fulfill online orders faster by enabling ship-from-store capabilities. This means that products can be shipped directly from a nearby store to the customer, reducing shipping times and costs.
Improved inventory management: Connected stores provide real-time visibility into inventory levels across all channels, helping retailers optimize inventory levels and reduce waste.
Better demand forecasting: Connected stores can help retailers predict future demand for products, enabling them to adjust inventory levels and production schedules accordingly.
Improved product visibility: Connected stores can provide customers with real-time visibility into product availability and location, reducing frustration and improving the customer experience.
Increased transparency: Connected stores provide retailers with greater transparency into the supply chain, allowing them to identify and address bottlenecks and inefficiencies.
Improved sustainability: Connected stores can help retailers reduce waste and optimize their supply chain, leading to more sustainable business practices.
Is a connected store strategy the right way forward for your business?
When deciding which stores to use for ecommerce fulfillment and what fulfillment model to pursue, you should consider the brand’s size, density, ecommerce activity, physical store locations, and customer demand.
Due to the high cost of their prime physical locations, luxury brands can’t devote much of their retail space to fulfilling orders. While mass-market players cannot afford to pick and pack orders manually, stock optimization algorithms can still be used to predict where to fulfill orders at the right time.
Mass-market brands can only benefit from implementing automated ecommerce order fulfillment if their order volume is high enough and they’re located in a dense, urban area. Still, inventory optimization software can be useful when handling returns, regardless of order volume. Depending on the source, approximately 30 to 40% of ecommerce sales are returned, and the rate can be as high as 50% in some apparel markets.
Stores as fulfillment centers
A customer's in-store experience is not the only aspect of shopping in a physical store that can benefit from a digital upgrade. Leading players are also adopting technologies that allow stores to become microfulfillment centers. By partnering with retailers to fulfill online orders, brands can maintain adequate stock levels across distribution and store networks and ensure fast delivery. Same-day delivery has a 50% higher conversion rate than two-day delivery.
In order to adapt to quick commerce and ultra-fast delivery expectations, mass-market players are turning physical stores into microfulfillment centers, which ship orders they have in stock, either through buy online, pick up in store (BOPIS) or buy online, ship from store (BOSFS).
Despite this, many stores still manage store inventory manually, and in-store inventory isn't incorporated into their ecommerce stock. Stock optimization technologies can help speed up and automate a store's value chain. Let’s now have a look at some of the key concepts associated with connected stores serving as extensions of a fashion brand’s delivery chain.
The endless aisle concept allows retailers to expand their product offerings beyond the limitations of physical store space. By leveraging endless aisles, retailers can display their entire product range using the retailer's in-store kiosk. The customer can buy a product and then pick it up as soon as it arrives at the store – or get it shipped directly to the doorstep.
Endless aisle is a retail strategy that allows customers to access a virtually unlimited selection of products, even if those products are not physically present in the store. Here's how it works:
Customers browse a retailer's in-store kiosk or mobile app to access an extended catalog of products that may not be available in the physical store.
Customers can then place an order for the desired product, which is fulfilled either through the retailer's ecommerce platform or by a third-party vendor.
The product is shipped directly to the customer's home or can be picked up in-store at a later time.
There are several benefits to implementing endless aisles in brick-and-mortar fashion stores:
Wider product selection
Store space is a limited and precious commodity – endless aisle allows retailers to offer a wider selection of products than they could physically stock in their stores, which can help attract customers who are looking for specific items. This is an especially important benefit for fashion brands – garments are typically offered in multiple sizes and color variants, so the chances of the physical store not having a particular size/color/model combination in stock is not uncommon.
Thanks to endless aisles, shoppers are never left empty-handed, and the store can increase the conversion rate.
Improved customer experience
Endless aisle saves customers time and improves their experience by allowing them to access products (or sizes) that are not available in the store.
Endless aisle can help reduce instances of stockouts, where a desired product is out of stock in the physical store, by providing alternative ways for customers to access those products.
Endless aisle can help retailers differentiate themselves from competitors by offering a more comprehensive selection of products.
Eton Shirts, a luxury, global menswear brand and long-time client of Centra, launched their first endless aisle in 2020 with the goal of combining the service of knowledgeable Eton sales professionals with an unlimited assortment available 24/7.
They use the endless aisle kiosks every day to showcase their products and help customers order custom shirts. It helps customers search and shop for shirts that aren’t available in the Eton Shirts store.
How to choose an endless aisle tool
Overall, endless aisle is a useful retail strategy that can help retailers improve the customer experience, increase sales, and stay competitive in a rapidly changing retail landscape. When selecting an endless aisle tool, consider the following factors:
Compatibility with mobile devices
Retailers providing customer-facing ordering kiosks in their stores must ensure that the relevant information can be accessed from mobile devices. Today’s customers rely heavily on them, and when they want to check up on an order, they'll likely prefer to do it on their mobile device. Offering endless aisle solutions that enable orders and returns to be processed on mobiles gives clients more convenience when shopping.
Don’t test the patience and tech-savviness of your shoppers. Your endless aisle should make it simple to place orders – it should offer intuitive touch controls and an easy-to-use interface.
Fulfillment of store orders
Customers expect comfort and convenience when paying for their purchases. Whether they want to buy online and pick it up in store (BOPIS), buy in-store and have it delivered to their home (BOSS), or finalize their purchases across any number of available channels, store fulfillment solutions make it possible.
Ease of integration
A successful endless aisle retail system must have the ability to integrate with other systems easily to retrieve real-time inventory data, access product information, and perform other functions.
Configuration and customization
There is no one perfect endless aisle solution for every business, since each is unique. With customizable and configurable software tools, retailers can customize the solution to fit their unique needs, and even add their own company branding to add some professionalism to the solution.
Real-time stock levels
Endless aisle should integrate with your ecommerce platform to sync inventory and other data in real time, providing customers and salespeople with 100% accurate information at all times.
Same-Day Ship-From-Store is a retail strategy that involves fulfilling online orders from a physical store location and shipping those orders directly to customers on the same day. This strategy is increasingly adopted by fashion retailers as it helps cut down on shipping times and costs. This option can also help retailers manage inventory by using their stores as mini-warehouses.
Here's how Same-Day Ship-From-Store typically works:
Customers place an order online, either through the retailer's website or mobile app.
The order is then fulfilled from a nearby store location, where the item is picked, packed, and shipped to the customer on the same day.
The customer receives their order within a few hours or by the end of the day, depending on the retailer's delivery options.
Nudie Jeans partnered with Centra to build an ecommerce business integrating all sales channels, ultimately creating a new kind of fulfillment ecosystem where customers can order online but have the product delivered from a local brick-and-mortar store. As a backup, the item is reserved at the main warehouse if no local stores can fulfill the order. Then, if needed, the product can be returned to the store. The ultimate goal is to deliver products in a quicker and more sustainable way.
This operating model creates a healthier, more holistic business that does not feed on itself in an act of commercial cannibalization, and it also delivers a huge service and sustainability win.
In summary, there are several advantages to using the buy online, ship from store strategy for both customers and retailers:
Same-Day Ship-From-Store allows customers to receive orders much faster than traditional shipping methods, which can take several days or even weeks.
Improved customer experience
Same-Day Ship-From-Store can help retailers improve the customer experience by offering faster delivery options and providing more flexibility for customers who need their purchases quickly.
Reduced shipping costs
Same-Day Ship-From-Store can help retailers reduce shipping costs by fulfilling orders from nearby store locations rather than from a centralized warehouse or distribution center.
Reduced inventory costs
Same-Day Ship-From-Store can help retailers reduce inventory costs by using existing store inventory to fulfill online orders rather than keeping separate inventory for online sales.
Same-Day Ship-From-Store can help retailers increase sales by offering faster delivery options and reducing instances of abandoned carts due to long shipping times.
Same-Day Ship-From-Store is a useful retail strategy that can help retailers improve the customer experience, reduce shipping and inventory costs, and increase sales.
Show store inventory online
Showcasing store inventory online provides customers with real-time access to product availability, allowing them to make informed purchasing decisions. This option also allows retailers to optimize inventory management by leveraging data on product demand and availability.
Stores display store inventory online to give shoppers real-time information about product availability at physical store locations on the retailer's website or mobile app.
Here's how it typically works:
Customers browse a retailer's website or mobile app and select the items they want to purchase.
During the product selection process, the website or app displays real-time information about the availability of the selected items at nearby store locations.
Customers can then choose to purchase the item online and have it shipped to their home, or they can choose to pick up the item in-store if it is currently in stock.
There are several advantages to using the Show Store Inventory Online strategy:
By displaying real-time inventory information, retailers can help customers find products that they might not have been able to find otherwise, which can lead to increased sales.
Improved customer experience
Show Store Inventory Online can help retailers improve the customer experience by providing accurate and up-to-date information about product availability.
Reduced inventory costs
By allowing customers to purchase items from nearby store locations, retailers can reduce inventory costs by consolidating orders at the store level.
Show Store Inventory Online can also help retailers offer faster delivery options by allowing customers to pick up their orders in-store rather than waiting for shipping.
Showing store inventory online is a useful retail strategy that can help retailers increase sales, improve the customer experience, reduce inventory costs, and offer faster delivery options. It gives shoppers a comprehensive view of a store's inventory, allowing them to see what else is available and make more informed decisions about whether to visit the store. However, it may be more time-consuming for customers who are not sure what they are looking for.
Find in store
"Find in store" is a service that allows customers to check the availability of a product at nearby physical stores of the brand. Customers can search for a product online, and if it's out of stock or not available for online purchase, they can use the "Find in store" feature to see if the product is available at a physical store. This allows customers to quickly and easily locate products and purchase them in-store, improving the customer experience and reducing the likelihood of a lost sale.
"Find in store" is useful when a customer knows exactly what they want and only wants to confirm that it is available at a nearby store. However, it does not provide any information about the store's inventory beyond the specific product being searched for.
When implemented within an omnichannel ecommerce platform, the "Find in store" service provides real-time visibility into inventory levels across all channels. By integrating online and offline inventory data, retailers can provide customers with accurate and up-to-date information on product availability, improving customer satisfaction and loyalty. The "Find in store" service is also beneficial for retailers, as it can drive foot traffic to physical stores and increase the likelihood of additional sales.
The apparel brand Nudie Jeans enables Ship From Store for selected markets, which, when available, is indicated in the delivery options.
BOPIS, BOSS, and BORIS
Buy Online, Pickup In-Store (BOPIS), Buy Online, Ship to Store (BOSS), and Buy Online, Return in Store (BORIS) are all variations of the connected store concept. BOPIS allows customers to purchase items online and pick them up in-store, BOSS allows customers to have their online orders shipped to a physical store, and BORIS allows customers to return items purchased online to a physical store.
BOPIS, BOSS, and BORIS are all retail strategies that involve the integration of online and offline sales channels to provide customers with a more seamless and convenient shopping experience. According to Adobe Analytics, BOPIS retail orders have grown 208% amid the pandemic. JD Power’s recent survey confirms physical stores still account for 63% of all sales made.
BOPIS (Buy Online, Pick up In-Store)
BOPIS (Buy Online, Pick up In-Store, sometimes referred to as click and collect) is a retail strategy that allows customers to place an order online and pick it up at a physical store location. Some retailers may offer additional features or variations of BOPIS or Click and Collect services, such as curbside pickup or designated pickup lockers, but the fundamental concept remains the same.
Here's how the process typically works:
Customers browse a retailer's website or mobile app and select the items they want to purchase.
During the checkout process, customers can choose the "pick up in store" option and select a store location for pickup.
After the order is placed, the retailer prepares the items and notifies the customer when they are ready for pickup.
The customer then goes to the designated store location, presents their order confirmation or ID, and collects their items.
Advantages of BOPIS include:
BOPIS allows customers to shop from the comfort of their own home or mobile device and pick up their purchases at a time and location that's convenient for them.
BOPIS orders are typically prepared and ready for pickup within a few hours, making it faster than waiting for shipping or visiting a physical store to find items in stock.
BOPIS can be a cost-effective option for both customers and retailers. Customers can save on shipping costs and avoid minimum purchase requirements, while retailers can reduce shipping fees and inventory costs by consolidating orders at the store level.
BOSS (Buy Online, Ship to Store)
BOSS (Buy Online, Ship to Store) is a retail strategy that allows customers to place an order online and have it shipped to a physical store location for pickup. Here's how it typically works:
Customers browse a retailer's website or mobile app and select the items they want to purchase.
During the checkout process, customers can choose the "ship to store" option and select a store location for pickup.
After the order is placed, the retailer ships the items to the designated store location, and notifies the customer when they are ready for pickup.
The customer then goes to the store location, presents their order confirmation or ID, and collects their items.
Advantages of BOSS include:
BOSS allows customers to shop from the comfort of their own home or mobile device and have their purchases shipped to a physical store location that's convenient for them.
BOSS orders are typically fulfilled within a few days, depending on the retailer's shipping options and the location of the designated store.
BOSS can be a cost-effective option for both customers and retailers. Customers can save on shipping costs and avoid minimum purchase requirements, while retailers can reduce shipping fees and inventory costs by consolidating orders at the store level.
BORIS (Buy Online, Return In Store)
BORIS (Buy Online, Return In Store) is a retail strategy that allows customers to return online purchases at a physical store location. Here's how it typically works:
Customers initiate a return request online, either through the retailer's website or mobile app.
The retailer then generates a return label and instructions for the customer to return the item to a designated store location.
The customer then goes to the store location, presents the return label and item, and completes the return process.
Here are some of the advantages of using BORIS for both customers and retailers:
BORIS offers customers the convenience of returning online purchases at a physical store location, rather than having to ship the item back. This can save time and effort for customers who may not have easy access to shipping materials or may prefer to interact with sales associates in person.
Improved customer experience
By offering an additional channel for returns and exchanges, BORIS can help retailers improve the customer experience and build loyalty. Customers appreciate the flexibility and convenience of being able to return items in person, which can lead to repeat business and positive word-of-mouth recommendations.
BORIS can help retailers reduce costs associated with online returns, such as shipping fees and processing costs. By consolidating returns at physical store locations, retailers can also reduce the amount of inventory that needs to be shipped back to centralized warehouses or distribution centers.
Increased foot traffic
BORIS can help drive foot traffic to physical store locations, which can lead to additional sales opportunities. Customers who come to the store to return an item may be more likely to browse and make additional purchases while they're there.
Improved inventory management
BORIS can help retailers improve inventory management by providing real-time information about returns and exchanges at the store level. This can help retailers better understand customer preferences and demand patterns, which can inform inventory ordering and allocation decisions.
Overall, BORIS is a useful retail strategy that can help retailers improve the customer experience, reduce costs, drive foot traffic, and improve inventory management.
How to choose a BOPIS, BORIS or BOSS tool?
Choosing a BOPIS, BORIS or BOSS tool for your ecommerce platform requires careful consideration of several factors.
Connected store solutions
Cloud-native point-of-sale platforms like Sitoo nad Front Systems can integrate with a headless ecommerce platform like Centra to help brands deliver omnichannel customer journeys. This means leveraging techniques such as endless aisle, self checkout, BOPIS, BORIS and BOSS. With real-time data across all sales channels, retailers can sell and fulfill everything anywhere and handle returns everywhere.
The tool should integrate seamlessly with your ecommerce platform, point of sale system, and inventory management system to ensure that orders are accurately fulfilled, and inventory levels are updated in real-time.
The tool should offer the features that best meet your business needs. For example, if you have a high volume of returns, you may want to prioritize a BORIS tool with advanced return management features.
The tool should be easy to use for both customers and staff, with intuitive interfaces and clear instructions.
The tool should be scalable to meet the needs of your growing business, with the ability to handle high volumes of orders and inventory data.
The tool should have robust security measures in place to protect customer data and prevent fraud.
The tool should be cost-effective and offer a good return on investment, taking into account the potential benefits of increased sales and customer loyalty.
The tool should come with reliable technical support and training resources to ensure that it is implemented and used effectively.
Overall, when choosing a BOPIS, BORIS, or BOSS tool for ecommerce, it's important to assess your business needs and prioritize the features and capabilities that will best support your operations and customer experience.
Connected stores are changing the face of retail by providing customers with a seamless shopping experience across online and in-store channels. By leveraging technology and their existing physical stores, retailers can expand their product offerings, provide faster shipping and pickup options, and optimize their inventory management. As the retail landscape continues to evolve, connected stores leveraging strategies like BOPIS, BOSS, and BORIS
will undoubtedly play an increasingly important role in how retailers reach and engage with customers.
Frequently asked questions
Are connected commerce and connected stores the same thing?
Connected stores and connected commerce are closely related concepts, but they differ in some important ways. Connected stores are focused on enhancing the physical store experience (in a single sales channel), while connected commerce is focused on creating a seamless and cohesive shopping experience across all channels (multichannel).
Connected commerce is a broader concept that encompasses all sales channels and touchpoints in the customer journey. It refers to the overall strategy of using digital technologies (personalized recommendations, real-time inventory tracking, and streamlined checkout processes) to create a cohesive shopping experience across different online and offline channels.
Connected store is a concept that refers to physical retail locations equipped with digital technologies (e.g. interactive displays, mobile apps, and digital signage) to enhance the customer experience. The goal of connected stores is to create a seamless omnichannel shopping experience by integrating the physical and digital worlds, helping deliver a unified and consistent experience for customers, regardless of where they choose to shop.
Brands can deploy connected store strategies and adapt mobile-based technology to the expectations of two distinct consumer profiles: those seeking convenience and those seeking experience.
What are some common challenges associated with implementing connected store technologies?
Implementing connected store technologies can be a complex process, and there are several common challenges that retailers may face:
Integration with legacy systems: Connected store technologies need to integrate with existing POS systems, inventory management systems, and other back-end systems. This can be challenging if those systems are outdated or don't have the necessary capabilities.
Data management: Connected store technologies generate large amounts of data, and retailers need to have the infrastructure and expertise to manage and analyze that data effectively.
Privacy and security: Connected store technologies collect and transmit sensitive customer data, such as payment information and purchase history. Retailers need to have robust privacy and security measures in place to protect that data from unauthorized access or theft.
Staff training: Connected store technologies require staff to be trained in new processes and systems, which can be time-consuming and may lead to resistance or errors.
Cost: Implementing connected store technologies can be expensive, and retailers need to weigh the costs against the potential benefits.
Connectivity: Connected store technologies rely on a reliable internet connection, and retailers need to have backup plans in case of outages or disruptions.
Overall, the implementation of connected store technologies requires careful planning and execution to overcome these challenges and maximize the benefits of the technology.
How can connected stores help fashion retailers improve their inventory management?
Connected stores can help fashion retailers improve their inventory management in several ways, including:
Real-time inventory tracking: Connected stores can provide real-time visibility into inventory levels across all stores and channels, allowing retailers to make informed decisions about restocking and optimizing inventory levels.
Automated inventory management: Connected store technologies can automate the process of inventory management, including restocking and replenishment, reducing manual labor and errors.
Predictive analytics: By analyzing sales data and customer behavior, connected stores can provide insights into which products are likely to sell well and which may need to be discounted or moved to clearance. This can help retailers optimize inventory levels and avoid overstocking or stockouts.
Demand forecasting: Connected stores can help retailers predict future demand for products and adjust inventory levels accordingly. This can reduce waste and improve profitability by ensuring that products are available when customers want them.
Product visibility: Connected stores can provide customers with real-time visibility into product availability and location, improving the customer experience and reducing frustration due to out-of-stock items.
Connected stores offer fashion retailers a wealth of data and insights that can be used to optimize inventory levels, reduce waste, and improve profitability. By leveraging connected store technologies, retailers can improve their inventory management processes and provide a better shopping experience for their customers.
How do connected stores impact the supply chain for fashion ecommerce?
Connected stores can have a significant impact on fashion ecommerce by improving the speed, efficiency, and transparency of the supply chain. It can help fashion ecommerce retailers streamline their supply chain and improve the customer experience, leading to increased customer loyalty and profitability.