February 9, 2017
With the emergence of Amazon and Alibaba, ecommerce giants have been re-shaping the online retail landscape. This has forced traditional brick-and-mortar retailers like Target and Nordstrom to overhaul their ecommerce leadership in attempts to be competitive online.
Is this the right move?
We won’t know how this plays out for a few years. There’s no clear cut answer to determine what traditional brick-and-mortar retailers must do to compete with ecommerce giants.
As the saying goes, Rome wasn’t built in a day…and neither was Amazon. It took Amazon decades to achieve its current status. Does that mean it’ll take brick-and-mortar brands decades to bring competition? Not necessarily, but it will take time and multiple phases of development.
Go endless aisle online
Testing out new ideas is critical to the success of ecommerce sales. For now, traditional brick-and-mortar retailers can copy what has made online giants successful in recent years — endless aisle.
What is endless aisle? It’s the concept of retailers offering consumers the ability to see and purchase from a robust catalog of products online. By taking the first step to implement an endless aisle ecommerce model, retailers can turn themselves into one-stop-shops, increasing their appeal to consumers and helping them remain competitive.
How is an endless catalog offering achieved?
Retailers have audiences. Suppliers have products. By partnering with suppliers, retailers can offer more products and deliver them through drop shipping or a ship-to-store option.
When a customer purchases an item from a retailer’s online store, the product is either owned by the retailer or one of their retail trading partners. If the item is owned by the retailer, the retailer fulfills the order as usual. If it’s owned by a retail trading partner, the supplier fulfills the order and drop ships it to the retailer’s customer (on behalf of the retailer).
Increased product offering
There are many benefits to an endless aisle strategy. The biggest selling point is being able to offer a wider variety of products to consumers. The more products you offer, the easier it becomes for customers to purchase what they’re looking for through a single transaction, increasing the chances of a repeat customer. Little by little, customers will have your brand top of their mind when considering their shopping list, which builds brand loyalty and increasing your profits.
Revenue growth
Increasing your product offering can also help improve sales. Once a customer has chosen a product, you can target them and offer other items that they may catch their interest. Think of this like offering impulse goods (chewing gum, for example) at the register during in-store checkout — but you can do it at a much larger scale.
Product viability testing
Unfortunately, not all products sell. You or one of your buyers might believe something is a sure hit, the average consumer may not bite. To protect yourself from overcommitting to a certain product, you can use your supplier partnerships and an endless aisle model test its viability on your online store without needing to purchase, stock or store it. Once you’ve determined if a product is a big seller, then you can commit to carrying it in stores or buying in bulk from a supplier, thus reducing the risk of owning large quantities of a non-viable product.
Simplified inventory management
Storage costs and inventory management are always a hindrance to a retailer’s bottom line. An endless aisle model allows retailers to be more selective of the products they carry in their stores and store in their warehouses. Less managed inventory reduces costs and time spent on inventory control. It also means spending less on labor in stores and warehouses.
Reduced number of lost sales
Nothing is more dreaded to an online shopper than seeing a “sold out” flag on an item they want to buy. If a consumer can’t find a product in your store, they will go to another retailer to purchase the item. Endless aisle can help reduce potential lost sales by allowing consumers to purchase an item on your online channel and have it drop shipped to them by another supplier.
These are only a few of the benefits of offering an endless aisle shopping experience to your customers. The concept is easy, but there’s is a lot of work that goes into enabling it. When you’re ready, we’re here to help. Contact us to learn more!