We’re only in the infancy stage of this new hybrid retail era, but brands are already reaping the benefits. Yet technology isn’t always foolproof. While it’s proven to be our greatest asset for future development, it can be our greatest foe when implemented incorrectly. Read on to see how these two scenarios play out with Nordstrom’s reduction of BOPIS and Anthony’s Pizza’s next level advancement, in this edition of the weekly dispatch.
Nordstrom Rack has decided to decrease the use of in-store fulfillment as they work through inventory issues that have caused an influx of order cancellations.1
Back in 2019, the subsidiary to Nordstrom launched an omnichannel strategy that included BOPIS (Buy Online, Pick-Up In-Store), to handle an increase in online orders and reduce customer churn.
Unfortunately, ongoing inaccuracies with inventory management have led to disruptions with order pick-ups. Difficulty locating products within stores have resulted in a high volume of online cancellations, along with heavily discounted inventory, resulting in lower profit margins than initially forecasted.
Reducing store-based fulfillment is a necessity as Nordstrom Rack regroups, with considerations for introducing minimums for free ship-to-store delivery. While the retailer works on improving fulfillment issues, they’ve set their sights on optimizing their supply chain efforts to provide a more enjoyable experience for their customers and an easier workflow for employees.
Lids, the athletic headwear retailer who recently launched their e-commerce site early this year, has just announced their new flagship location, in Jamaica, Queens, NY, also known as ‘hat mecca’ within the United States.2
With the success of their online launch early this year, the limited-edition product drops will now be available every Friday in-store.
In-store shoppers will have one hour to purchase before the merchandise becomes available on their e-commerce store. An additional collection called “Queens Store Exclusives” can only be purchased at the Queens location.
Main goals for Lid’s new flagship location will be to offer exclusive promotions of new designs and collections, as well as celebrity collaboration pieces and community led projects.
This new initiative is part of a larger strategy for the athletic retailer of more than 1500 locations. The short-term projects include an extensive redesign of their stores to align more with their sports minded consumer base, and a new store expansion goal across North America and Europe.
After two years of testing a new AI technology to assist with phone orders, Anthony’s Pizza, a subsidiary of BurgerFi International Inc, has announced plans to implement a full-scale launch to all 60 locations situated throughout the East Coast.3
The virtual ordering assistant, equipped to mimic a human voice, is also designed with conversational intelligence. The technology, created and owned by ConverseNow, was engineered specifically for the restaurant industry to help lower operating costs, increase phone order productivity, and provide a speedier and optimized customer experience.
Anthony’s Pizza, who receives a significant portion of their sales through phone orders, volunteered to be a part of the early testing of this new technology. Since the implementation, the Italian eatery’s phone orders are fully managed by voice-engineered AI.
Their efforts mark a major shift within the hospitality sector at large, with voice AI now being adopted by 50% of restaurants across the country.4
Ian Baines, CEO of BurgerFi International Inc., said in a statement, “There’s no question that automation is the future, which is why Anthony’s was an early adaptor of this technology. With ConverseNow’s technology, Anthony’s is taking the system to the next level for faster service and an improved customer experience.”
According to a study conducted by the National Retail Federation and Appriss Retail, 2022 will see more than $816 billion in returned merchandise. However, retail sales remain on an upward trajectory and the average rate of returns remains flat at 16.5% vs last year’s 16.6%.5
The data also revealed that the e-commerce return rates seem to be stabilizing, a first-time occurrence since the study began back in 2019. This year’s online return rate of 16.5% is a decrease from last year’s 20.8%. Fraudulent returns also remain a consistent problem for retailers, with the study showing that for every $100 spent, $10.40 is fraudulent.
Here is a breakdown of the report:
Steve Prebble, CEO of Appriss Retail said in a statement, “… Retailers must look for ways to individualize the returns process through data-driven insights. This will minimize the risk of accepting fraudulent returns while enhancing the customer experience for loyal shoppers.”