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A Close Up at Enabling Agile Operations for the 2020 Holiday Season

A Close Up at Enabling Agile Operations for the 2020 Holiday Season

Four strategies for enabling flexible retail operations and consumer experiences ahead of a difficult-to-predict buying season

We hope you were able to tune into our Holidays 2020 Toolkit livestream, where PSFK retail innovation experts shared findings from our recent research dive into holiday strategies for a disrupted season. If you missed the stream, not to worry! We have posted the video on our Retail Innovation Week YouTube channel—check it out here.

We also want to bookend the event with a deeper dive into one of the most in-demand questions about seasonal buying this year: how to enable agile operations that can help navigate a somewhat unpredictable climate and further strain on fulfillment operations. Below, we explore four trending strategies our researchers have identified in the full holidays report and touched on in the livestream that are helping brands and retailers respond to the challenge of maintaining all-important flexibility and customer satisfaction:

Dynamic Merchandising — Inventory forecasting using historical data is an expensive and imprecise exercise. Instead, retailers are leveraging digital and physical data such as purchase volume through to individual SKUs and browsing/wishlisting preferences to learn about the nuanced needs of local customers in real-time. Paired with the right operational infrastructure, this allows stores to optimize their merchandising mix to better meet the needs of shoppers, while avoiding dead stock or heavy promotions to move unsold items. 

Few retailers better embody this strategy than Nike’s ‘Live’ concept, which harnesses purchasing data from local members of the Nike Plus app to inform the Live store’s merchandising, with the aim of providing a hyper-locally curated experience. In ecommerce, direct-to-consumer menswear label Cuts takes a slightly different approach to dynamic merchandising, creating a weekly release called The Friday Projects that is dropped over text message to customers who opt in. This method helps the label test consumer interest in new items while offering an insider experience.

Flexible Payments This upcoming holiday season, 32% of shoppers will be spending less on purchases than they did last year. As a way to navigate this reality while also reaching a wider audience, retailers and brands are partnering with next-generation payments providers to give customers a wider range of options to buy now and pay later. Financial products such as split payments and low or no-interest financing plans are increasingly available to customers who don’t have the interest or ability to pay for their entire purchase right away. 

Electronics company Samsung recently made financing its phones and other devices easier by partnering with payments platform Klarna. This collaboration enables Samsung to offer customers installment options like buy now, pay in 30 days; make three even payments every 30 days; and spread out the cost over as many as four years. The three choices correspond to how much shoppers spend, and are available for products ranging from appliances like washing machines to the latest Galaxy phone model.

Last-Mile Warehousing — With reduced in-store traffic and increasing last-mile delivery costs, companies are reimagining local stores as micro-fulfillment centers. These mixed-use centers can fulfill local delivery and curbside pickup orders while also serving customers’ immediate needs on the retail floor. 

In addition to its quickly changing merchandise, Fast fashion giant Zara is known for its speedy and reliable delivery, and its fulfillment savvy is surely to credit. In addition to offering in-store pickup at some of its busiest city-center hubs, a tactic that cuts out certain aspects of the delivery process, the brand also is merging online and in-store stockrooms to effectively enable ship-from-store capabilities, reports the Wall Street Journal.

Density Forecasting — To improve their own operations and customer comfort, retailers are leveraging in-store cameras and digital infrastructure to generate real-time crowd estimates and wait times. These measures manage store density and offer alternative shopping approaches during peak hours or for vulnerable populations. They also help customers have confidence in their ability to access a store and plan their day. 

Web-based mobile app Safe Queue is helping stores organize their waiting lines, a common challenge during social distancing times. Safe Queue eliminates physical lines altogether by transferring them to the digital realm, letting customers within 1000 feet of a location reserve their spot, then alerting them when it’s their turn to enter. Partnering for a similar concept, communications network LinkNYC and data tech platform Foursquare teamed up to display average foot traffic numbers in local New York stores and venues, according to the Morning Brew—a move which helps consumers gauge wait times and plan their route.

For additional deeper insights like this look into agile operations, find out about accessing the full report.