How Retailers can Adapt to a Post-Pandemic Retail Environment
"The pandemic has taught the retail industry the importance of diversifying the platforms they utilize to reach their customers. With the majority of retail sales now taking place online, retailers need to continue adapting their online platforms to ensure they work across a range of devices while delivering an immersive and userfriendly experience."
"The pandemic has taught the retail industry the importance of diversifying the platforms
they utilize to reach their customers. With the majority of retail sales now taking place online, retailers need to continue
adapting their online platforms to ensure they work across a range of devices while delivering an immersive and userfriendly experience."
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SML RFID STATE OF RETAIL INSIGHT REPORT PART 1
Adapting to a Post-Pandemic
Retail Environment
The following comments are the first chapter of a report
following a survey that SML conducted in the Spring/
Summer of 2021. Over 500 apparel retail executives and
decision-makers in the US and UK responded, providing
valuable insight into the importance of a New Era in
inventory management and omnichannel order
fulfillment models.
The COVID-19 pandemic, and its following nationwide
lockdowns, hit the entire retail ecosystem on a global scale
that no one could have predicted. The retail industry, already
experiencing disruptions from a transition to e-commerce, was
now faced with the task of pivoting to omnichannel and store
pickup offerings to preserve their customer base and survive
the pandemic.
The retail industry has faced a multitude of challenges over
the past decade, but these were accentuated like never before
in the last 18 months. Rising overheads, shifting consumer
habits, and a growing need to cater to more environmentally
conscious shoppers. Retailers have had to navigate this
evolving landscape and adapt to improve their operations to
remain profitable and relevant.
Part one of this insight report looks at the sector's current
sentiment to growth and the challenges that retailers perceive
to be impacting the industry going forward. The report also
explores how retailers navigated the pandemic and how they
are looking to bounce back. It dives into the avenues that
the apparel retail sector will pursue to reach an increasingly
shifting consumer base while also delving into how the industry
can future-proof itself and prepare for the years to come.
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© 2021 SML RFID is a division of SML Group Limited
2
A Year Like No Other
In March 2020, many non-essential retailers were forced
to suspend operations and, while they opened stores
to varying degrees a few months later, for many, the
challenges related to the pandemic proved too challenging
to overcome. In the US alone, a record-breaking 12,000
stores closed down throughout 2020 due to the pandemic
and the subsequent shift to e-commerce 1 .
Not only were physical retailers negatively impacted, but
there were broader implications across the entire sector. The
global supply chain came to a grinding halt, leaving hundreds
of shipping containers unable to be effectively processed.
Consequently, retailers needed to act quickly once supply
chains restarted to efficiently identify what inventory they had
in transit and begin making decisions on product markdowns
and how to navigate missed selling seasons for apparel and
goods. It is estimated that over 30% of inventory for clothing
and footwear retailers had to be marked down, resulting in
significant financial losses and a heavy operational workload
that a reduced staff number would have had to execute.
30%
of inventory for clothing and
footwear retailers had to be
marked down
What has been the biggest sales channel for you
in the last 12 months?
Brick & Mortar
Home Delivery
Omnichannel (BOPIS and Click & Collect)
36%
42%
22%
In order to remain operational throughout the pandemic, a large majority of retailers needed to shift their resources to support
exploding demand for online and omnichannel fulfillment solutions. Almost half of US and UK retail decision-makers (42%) say
that online home delivery has been their biggest sales channel during the last 12 months. Additionally, 22% of those surveyed
said that omnichannel solutions such as BOPIS (Buy-Online-Pick-Up-In-Store) and Click & Collect had been their main sales
channels throughout 2020. Omnichannel offerings are particularly critical to physical retailers as they act as a catalyst for
driving customer traffic to stores and creating opportunities for additional purchases. However, respondents estimated that
their enterprises have an average of a 28% BOPIS cancellation rate. With increased competition and shifting consumer demands,
the reality is that long-term omnichannel success is not sustainable with cancellation rates that high.
1
https://fortune.com/2021/01/07/record-store-closings-bankruptcy-2020/
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© 2021 SML RFID is a division of SML Group Limited
3
Retail Prepared to Bounce Back
The retail industry remains a resilient sector, adapting
to new technologies and implementing new processes
to keep up with societal and economic shifts to remain
relevant. As an industry, the retail enterprises that succeed
are those that consider the future and meet customer
demands in a variety of avenues to grow engagement and
capitalize on areas to grow sales while reducing friction in
the purchasing process.
38%
of retailers deemed recovering
from the pandemic as the most
significant obstacle to
business growth
Despite a challenging year, 37% of retailers say they are
confident their businesses will grow within the next 12
months, with 23% of respondents claiming that they are
very confident of achieving growth. While a quarter of
respondents (27%) say they are neither secure nor anxious,
there remains a generally positive sentiment toward growth.
When considering the main challenges to business growth,
unsurprisingly, retailers deemed recovering from the
pandemic as the most significant obstacle, with 38% of
respondents stating this. The key is to identify what specific
outcomes correspond to a full recovery and what must be
achieved for retailers to move from surviving to thriving in
a disrupted industry. The path forward for retailers will be
anchored to their ability to deliver frictionless and engaging
customer experiences through various sales channels.
How confident or anxious are you about your
potential business growth this year?
Confident
Very Confident
Neither confident nor anxious
37%
23%
27%
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© 2021 SML RFID is a division of SML Group Limited
4
Obstacles Retailers Face
It is imperative to gain insight into the obstacles retailers currently face to understand how they can best walk out of their
pandemic recovery process and begin to progress in their selling strategies.
When asked about the main obstacles, almost half (48%)
of retailers said a key challenge to serving customers was
frequently out-of-stock items. Additional challenges identified
were health and safety measures resulting from COVID-19
(32%) followed by 24% of retailers having an unclear view of
inventory, 21% taking too long to find items, and 14% having
the wrong items in store. Retailers are telling us, and consumer
experiences validate, that the most fundamental challenge
in retail is to understand what you own, where it is in your
enterprise, and if it is truly available to fulfill customer orders in
various channels, including stores and e-commerce.
Delivering a satisfying customer experience is crucial for
establishing brand loyalty and maintaining a healthy sales
pipeline. We have seen in the past that regularly out-of-stock
items or having the wrong products in-store leads directly to
customer dissatisfaction and can deter them from shopping
with a particular retailer again. No matter the level of customer
service in a store or how well designed a retailer’s online
presence is, they cannot deliver a positive customer experience
or generate sales if the expected inventory is unavailable.
Which of the following are the main challenges
of serving your customers?
Frequently out of stock items
Health and safety measures as a result of COVID
Unclear view of inventory
It takes too long to find items
Wrong items in store
Outdated Processes
Lack of effecient omnichannel solution
Poor customer service
48%
32%
24%
21%
14%
15%
11%
11%
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© 2021 SML RFID is a division of SML Group Limited
5
Future-Proofing Your Business
With Long-Term Omnichannel
Solutions
As the retail sector navigates uncertainty around COVID
variants and fluctuating case numbers in different
geographic regions, specific processes and technologies
that were adopted during the pandemic will continue to
be used in the industry. With more consumers returning
in-store, retailers must review current customer service
processes and practices and use learnings from the height
of the pandemic to continue to inform future decisionmaking.
Honing in on growing avenues of sales will be
critical for continued long-term success.
When asked how retailers could better serve their customers,
43% of respondents say that having real-time visibility of
stock levels would be one of the most critical factors in
delivering an optimum experience. Of those surveyed, 37%
say they would like to invest in technology that enables a
clearer view of inventory, and 34% would invest in technology
that allows them to find items quicker, with 31% looking to
invest in more staff training.
With e-commerce and online retail experiencing such
significant uplift in the past year, retailers should expect
to invest in ways to refine their fulfillment of these online
orders and enhance their omnichannel solutions. Not only
do these solutions keep up with changing consumer habits
by providing more fulfillment options, but they also enable
retailers to future-proof their businesses should there be any
further lockdowns or supply chain disruption from COVID
variants or other outside factors.
When asked how confident they would deal with a future
lockdown, 39% of retailers said they are prepared. However,
17% of respondents claimed they were either slightly or very
anxious at the prospect of another lockdown. These retailers
need to consider implementing the right tools and solutions
to ease this anxiety and better equip them for any future
uncertainties.
55% of US and UK retailers surveyed said they currently have
a BOPIS offering, with a third of respondents (34%) saying
they would invest more in BOPIS and Click & Collect solutions.
An additional 13% state they want to invest and improve their
current omnichannel offering, and 29% want to improve their
current e-commerce platforms. The pandemic has taught the
retail industry the importance of diversifying the platforms
they utilize to reach their customers. With the majority of
retail sales now taking place online, retailers need to continue
adapting their online platforms to ensure they work across
a range of devices while delivering an immersive and userfriendly
experience.
43%
of retailers say that having
real-time visibility of stock levels
is critical in delivering a better
customer experience
17%
of retailers are anxious for
another lockdown
What avenues are you going to take to
future proof your business?
Invest more in BOPIS and Click & Collect solutions
34%
Invest and improve current omnichannel offering
13%
Improve current e-commerce platforms
29%
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© 2021 SML RFID is a division of SML Group Limited
6
The retail market remains resilient as the industry acquaints itself with this new era. While the past year has been
a challenging one for many, there have been critical lessons learned that can be leveraged for future growth and
profitability. Sentiments around the prospect of growth are high, and retailers have identified pre-pandemic processes
that can be adapted and refined to better align with a true omnichannel vision that allows each unique channel to drive
customer engagement.
Consumer behaviors have changed permanently. Retailers must adapt by considering not just product assortment and price,
but also the most convenient fulfillment options that can be done effectively. Having multiple channels that operate in union and
complement each other will be the driving force required to meet consumer demand and retain market share.
Driven by technology such as item-level RFID, retailers that had implemented the technology and solutions were able to
recover and strive forward rapidly as compared to competitors that had not adopted the technology. Item-level RFID solutions,
tags, and software solutions have proven to improve their real-time visibility of stock, locate items faster and deliver a truly
enhanced BOPIS and omnichannel experience. Retailers that fail to act to address their underlying inventory discrepancies and
their impact on omnichannel selling will face the prospect of falling further behind in serving consumers with best practices..
Part 2 of SML’s ‘State of Retail’ industry report will take a deeper dive into how retailers have implemented technological
advancements in order to address inventory management challenges. Due to be released in late 2021, the report will explore
how retailers have approached a shortage of staff while trying to roll out or enhance their omnichannel strategies.
For more information contact: info@sml-rfid.com
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© 2021 SML RFID is a division of SML Group Limited
7
POWERING
BRANDS OF
TOMORROW
About SML
With a presence in over 30 countries, SML Group is the global end-to-end RFID and brand identification solutions provider,
delivering proven results and rapid ROIs to brands in the new era of retailing. We offer innovative Inspire and EcoInspire
labeling and packaging products, high-performance RFID tags, and encoding services across industries. Our proprietary
software Clarity® is the only item-level RFID solution that is engineered and deployment-proven for vertical retailers and brand
owners with stores. As an invaluable partner of brands, SML is committed to developing tech-driven solutions that power brand
transformation and prosperity.
SML RFID @SMLRFID www.sml-rfid.com
info@SML-RFID.com
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© 2021 SML RFID is a division of SML Group Limited
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