Retail perspectives, pt. 5: transition to agile commerce solutions

The impact of COVID-19 is seen across all facets of life. This crisis has especially been pronounced for the retail industry with many businesses forced to close their doors in the short term and move their business to new platforms and channels. With no clear line of sight to a resolution to the epidemic, retailers are looking to rapidly transition their businesses from traditional operating models to intelligent, intuitive, and agile commerce solutions.

Over the past month we have explored a range of factors that retailers can use to chart a course in this tumultuous time. This is the final installment of our retail perspectives blog series on best practices for the retail sector in which we have covered customer experience, supply chain disruption, and protection against fraud. We will look at what factors retailers need to be aware of in defining a new customer journey and what resources are available to help them adapt their business to restart and grow their practices.

A prevailing need for digital commerce

Before COVID-19, e-commerce was already on a significant growth trajectory. Over the past 15 years we have seen a consistent shift of customer buying behavior towards digital platforms, with e-retail projected to demonstrate a significant year-over-year growth in 2020. Social distancing and shelter in place directions left people with little options but to shop online for their wider needs. This has in turn driven a massive increase in online sales with e-commerce sales increasing by 209 percent in April 2020 alone, according to ACI. The unprecedented increase in demand for online shopping is set to persist in the immediate future with many shoppers stating that they will not return to shopping from physical stores once restrictions are lifted.

This dramatic increase in digital commerce engagement has left many retailers struggling to meet customer needs due to inflexible and disconnected retail solutions. According to the Capgemini Research Institute, in a digital-first environment, operational agility, flexibility, and consumer engagement assume huge significance. This means that digital commerce systems need to enable retailers to meet customer demand across a variety of channels and delivery options, and be able to pivot in lockstep with changing customer habits.

Adapting to customer needs

Microsoft Dynamics 365 Commerce enables businesses to enhance their commerce capabilities by delivering intelligent, unified, and streamlined shopping experiences for customers. By unifying customer journeys across e-commerce and physical stores, businesses can rapidly adapt to customer needs and ensure business continuity in a difficult selling environment. The headless commerce engine in Commerce enables business to connect new and existing infrastructure solutions to enable true omnichannel shopping scenarios. This is especially important in helping business quickly adapt to new social distancing needs like contactless shopping, buy online and pickup in store, or curbside collection.

Ste Michelle Wine Estates shifted to Commerce early in 2020 and had to rapidly transform their business processes to serve customers during these difficult times. They shifted from traditional face-to-face sales in their tasting rooms to a digital motion, thereby ensuring business continuity along with prioritizing the safety and well-being of their employees and customers.

Delivering beyond digital transactions

The rise in digital engagement also means that brand relevance and differentiation has never been more important. Retailers that have historically counted on their in-store experience to ensure customer loyalty now have to pivot and drive differentiated experiences on digital channels as well or risk losing customers to discount-oriented online competition. Personalization is key to ensure you are delivering relevant and curated messaging to your customers across marketing efforts and throughout the shopping journey.

As discussed in part two of our blog series, having a real-time view of customers is integral to delivering great shopping experiences across all channels. With Microsoft Dynamics 365 Customer Insights natively integrated into Commerce, businesses can gain a holistic view of customer interaction across channels to deliver more personal journeys. Complemented with intelligent recommendations in Commerce, we can provide customers with relevant recommendations online and empower store agents to deliver individualized shopping experiences through clienteling tools.

A new role for physical stores

Even with the immediate impact on physical stores due to social distancing, we anticipate that majority of shoppers will return to in-store shopping habits. The number may not line up with what we have had experienced before as business have to adjust to social distancing requirements and many customers growing accustomed to digital shopping habits. According to Capgemini Research Institute, 59 percent of consumers worldwide said they had high levels of interaction with physical stores before COVID-19, but today less than a quarter (24 percent) see themselves in that high-interaction category. In next six to nine months, 39 percent of consumers expect a high level of interaction with physical stores—clearly below the pre-COVID levels. With this, many retailers are rethinking how in-store experiences could complement the broader shopping journey of customers along with supporting demand fulfillment needs. Beyond scenarios like curbside collection, retailers are looking to stores as distribution centers to lower the cost of digital demand fulfillment and limit the amount of dead stock currently in stores. The distributed order management system in Commerce helps to save retailers money by allowing for intelligent stock routing for order fulfillment. Coupled with Microsoft Dynamics 365 Supply Chain Management, retailers can gain real time insight into stock and streamline their demand fulfillment systems.

Dr. Martens helps support their business operations and growth plans with Microsoft Dynamics 365.

“We’ve implemented virtual warehouses, giving us visibility of stock as a whole, but also stock per channel. This, combined with our new automated overnight store replenishment capability, means we’re able to get the right products to the right stores in a very short lead time. This is directly contributing to our growth and helping all teams to meet business targets.”—Jackie Reid, Program Lead, Project Reboot, Dr. Martens

Where to get started

Microsoft is helping customers across a range of industries rapidly adapt to new business needs driven by the current crisis. We are currently offering customers the option to partake in a Commerce in a Day session with partners that will stand up a prototype site for retailers to get a better sense of the solution. In addition to this, we are facilitating rapid deployment programs with our partners to ensure quick and quality deployment of e-commerce sites for retailers to get back to business.

Watch our virtual fireside chat: Best Practices for Thriving in the Retail Industry Today

Register to watch on demand with Microsoft experts to learn about best practices from the retail sector, including how to mitigate fraud risk, control operational costs, gain visibility into your end-to-end supply chain management, and leverage increases in e-commerce activity. Learn from Microsoft’s partnerships with global retailers on how to protect revenue first, setting up your organization for growth in the new economic environment.

Hosted by Alysa Taylor, Corporate Vice President, Business Applications and Global Industry Microsoft and Shelley Bransten, Corporate Vice President, Global Retail and Consumer Goods, Microsoft.

We also recommend

  • Contact us to find out how you can get a partner to create a prototype website in a day.
  • Learn more about Dynamics 365 Commerce, Dynamics 365 Customer Insights, Microsoft Dynamics 365 Fraud Protection, and Dynamics 365 Supply Chain Management.
  • Tune in to the Connected & Ready podcast series:
    • The future of sales is digital with Mary Shea—Host Gemma Milne is joined by guest speaker Mary Shea, a principal analyst serving B2B marketing professionals at Forrester Research. Hear Mary’s perspectives on the art of making meaningful connections during challenging times, the acceleration of digitization, and the advantages of AI technology.
    • Going direct to consumer – part 1 with Na’ama Moran—Host Gemma Milne is joined by Na’ama Moran, CEO of Cheetah, for a conversation about making the shift from B2B to direct to consumer, the importance of iteration, and how working collaboratively with your supply chain partners can drive success for everybody.
    • Rebuilding your business online with Richard Wang—As businesses have had to make the switch to contactless shopping almost overnight, they are finding new ways to connect with their customers. In this episode of Connected & Ready, host Gemma Milne is joined by Richard Wang, CEO of Coding Dojo, to discuss how volunteer coders have helped small businesses move online, the trends they’re seeing, and how business owners can stay focused to launch quickly and enable business continuity.