Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In Transit Personnel.
The creative director of Louis Vuitton, Kim Jones, in a recent interview with Fashionista, described his role as 90 percent politics (management) plus logistics, and only 10 percent creative, conﬁrming what retail supply chain professionals already know: retail is a ﬁerce, fast-paced and dramatic business.
Brand loyalty aside, a complex system of goods movement, from fabrics to showroom, takes a sharp, strategic and straightforward leader, Jones says. He points to the importance of employee retention and cost of attrition. He also recommends others do as he says he has done: call out management habits that stifle good morale and commitment.
Of course not all brand, retail chain or product leaders have the power to demand performance and reward people to the extent—or with the freedom—that Jones has, but the point is that great leaders stand out from the crowd.
Take, for example, Canadian e-commerce sensation, Roger Hardy, of SHOES.COM, who established the highly successful online Coastal Contacts business from his basement. After 15 years, an IPO and years trading on the NASDAQ, he sold the business for $450 million. During that time, while building his brand, he developed a keen understanding of the unique geography and demographics of the Canadian market. Unlike rival US online shoe store Zappos, which declared failure to successfully support Canada, SHOES.COM, led by Hardy, found an early e-commerce sweet spot in Canada and made sure to take advantage of it.
Hardy, who is considered a visionary, has built a reputation for hiring innovative people with strong technology skills. This has allowed him to develop a compelling online retail offering while meeting domestic logistics challenges head on, such as border congestion. He has also learned to effectively maintain the availability of transportation and distribution services in Canada, and that’s no easy task.
Many Canadian retailers are still just moving slowly toward the type of “omnichannel” offering Hardy was actually able to develop early on in his career.
Meanwhile, Canadian consumers are starting to increase their spending online, putting further pressure on the traditional retail business. And access to digital marketing, product reviews, research and purchasing details are also contributing to every part of the consumer spend, while changing consumers’ buying habits in a variety of ways.
Online shopping is only one part of the new reality. While folks are still going out to shop, some in fact are researching products they plan to buy online or elsewhere. The millennial, mobile and social customer base does not have the same loyalty as baby boomers.
The other serious challenge is that while today’s consumer has more information at his/her disposal on a range of products, features and selections from all locations, the Canadian consumer doesn’t have access to the variety of goods or services as an American.
Still, Hardy has talked about a yet-to-be-released idea to boost the customer experience. He plans to develop an electronic sock that can read the exact form and configuration of one’s foot to quickly meet exact size specifications.
Such flashy, yet unique, offerings have been proven to bring immediate sales increases—as long as the products are reliable. Buyers don’t want cookie-cutter solutions; they want creative, accessible, beyond-the-boundaries experiences. Therefore, customer expectations on the delivery side are much tougher, since they consist of fragmented requests and small-size shipments and purchases anytime, for any place.
Online retailers have the advantage of collecting important data on the buying habits, preferences, locations and demands and can use this data to market and strategically combine products. However, it is critical the value of the product is matched with the experience of receiving the goods on time, with the proper packaging and precise requests that make logistics tricky.
Flexible delivery and accessible tracking details, reporting any changes to availability, along with an easy return service; these are a huge test for many online retailers and those in the omnichannel space.
Additional trends include in-store digital access to inventory information, with more marketing and product feature information. Stylish stores and precision digital shopping experience are key examples of a successful retail logistics scenario. All of these improvements will help to ensure the physical presence of a store matches the online sophistication, and keeps customers—and their friends—coming back over and over.
But if you don’t get the logistics right, forget about satisfying customers, no matter how great your stores and products are.