The past 14 months have had a significant impact on economic development as well as on people’s behavior. The exact extent of the devastating effects of the crisis on Germany's inner cities is still unforeseeable. Social distancing and mandated store closures during the lockdowns have particularly forced retailers to take new paths. Unlike the previous online trade, which is facing an unstoppable flood of orders, brick-and-mortar retail had to try new models to offset losses – with mixed success. These companies are still at the beginning of their development. The solution is likely to be found in more strongly connecting brick-and-mortar retail and online business in an Omni-Channel approach. Only in this way can customer desires be fulfilled and the consumer journey sustainably improved and made more transparent.

Is Now the Time for Flagship Stores?

In the past 12 months, customer shopping behavior has increasingly shifted towards online shopping. For this reason, more and more retailers have expanded their portfolios to include an online shop. Customers benefit from the convenience of having almost everything delivered to their homes easily, but this is often not very sustainable. Since they only know the goods from pictures, many order their items in various versions. As a result, the number of returns has increased alongside the larger order volumes.

One way towards Omni-Channel after the pandemic could be so-called flagship stores. The principle is simple: retailers have a small local stock of their goods in the store, where customers can inspect, try on, and choose the items. Once the choice is made, the retailer orders the goods from the warehouse and has them sent to the customer’s home.

If the goods still do not meet the customer’s expectations, they can be returned both in-store and online. This creates more convenience for both sides. The customer can see the color, fit, and model on-site and specifically choose one. This sustainably reduces the number of returns. In return, retailers do not have to store large inventories locally but can keep them in the warehouse. This saves store space and costs.

Click & Collect Is Not the Ultimate Solution

“Click & Collect” allows retailers to keep their doors open even during pandemic times. However, customers often criticize the lack of communication and transparency with this model. While the combination of ordering online and picking up in-store is a step towards Omni-Channel, it is not yet fully developed.

The solution would be a hybrid approach, where customers can choose how they want to purchase, receive, and return their goods. This, however, requires system updates on the retailer's side – ensuring that goods flows can be recorded both locally and online. This would already be the biggest step since the training effort for staff would be minimal. Employees would continue to work with the same cash register system and could still handle all processes during the entire consumer journey. A hybrid return management system used in this way also allows for more flexibility. On one hand, the consumer experience is positively shaped by better communication and increased transparency, resulting in higher customer satisfaction and loyalty. On the other hand, retailers have more opportunities to deploy their staff profitably and generate more sales through higher customer satisfaction.

Complete Transparency Is No Longer Optional

In terms of customer satisfaction, complete transparency from retailers is becoming increasingly important. End customers demand real-time transparency of the logistics chain – both in delivery and return processes – in their consumer experience. To ensure this, modern IT platforms must be implemented to digitally map and manage these processes. Digital return management, in turn, creates better communication with the customer, as they are given all the information they need for a possible return from the start. Additionally, retailers can better understand the desires of their end customers and see if a return can be avoided under changed parameters, such as a granted discount. Transparency and automation, also in communication, reduce costs in customer service and contribute to a lower return rate, also in terms of sustainability.

The combination of brick-and-mortar retail and online trade in Omni-Channel can thus sustainably positively influence the consumer journey. This increases both customer loyalty and revenue. A part of this Omni-Channel can be a digital return platform, which can also reduce revenue losses that retailers who still rely on insert returns can only dream of.