In a year when literally every day meant finding solutions to unprecedented problems, innovation has been a constant theme.
In terms of the fastest growing retailers in 2020, however, perhaps the most impressive is their ability to successfully — and rapidly — turn stores into micro-fulfilment centers. “Necessity being the mother of invention or innovation,” says David Marcotte, senior vice president at Kantar.
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“But they did an incredible job of rapidly retooling their companies to be able to pick and put together orders inside and be able to ship them. A lot of this [was] basically attributable to clouds and apps. If you went into a supermarket company, they were doing delivery direct from the store to homes, but there was no section of the store dedicated to it. It was basically a fold-out table and somebody holding up a smartphone. Even when looking at third-party delivery services, it’s a very small terminal inside the store.”
This innovation could be described, he says, as “uberization, which is the realization that you can make an app do more than one thing. You can use the same app for the user, and the provider, and for the logistics, and finance and everything else. The app is quite capable of doing multiple things.”
Other than that, he says, innovation largely fell into the category of whatever was needed to keep the store open and going. “And that included online.”
As time went on, he says, logistics issues defeated a lot of innovation.
What might find footing going forward, however, is store-within-store concepts and synergies between noncompeting companies. “The bottom line is that almost every retailer reduced the SKUs in the store,” he says. “Either accidentally or on purpose. They couldn’t get the product, or they decided to discontinue a whole manufacturer in a section. So, there’s a lot more space in the stores.”
For as much thought as there was early in the pandemic about spreading people out and changing store layouts, he says, it didn’t really happen. “Very few companies actually remerchandised their stores to do any of these things,” he says. “But there is a realization now that there’s a fair amount of dead space in the stores, so what should we do? There’s a self-awareness that certain departments are not really carrying their weight. Should I still be in that business?”
The challenge, however, is that if stores are to be remodeled, there isn’t the labor —or the building materials — to do it. “You’re back to rather mundane, block-and-tackle issues,” Marcotte says. “They’re slowing down what you can do … . We’re all exhausted.”