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Let’s Get Phygital! Winning the Digital Shelf: STEPS 1 & 2

Are you up on the latest trends and practices in Phygital – the blending of online and in-store channels to deliver a seamless, connected shopping experience wherever and whenever the consumer chooses to engage? In today’s dynamic omni commerce environment, making sure your organization is approaching all business aspects with an eye toward Phygital is critical to outpacing the competition and accelerating growth. To keep you on the forefront, here are some tips and insights to support your brands in connecting with the shopper.

Step 1: Item Set-up and Maintenance

When thinking about how to make your e-commerce business grow, many people’s minds go to sophisticated paid advertising campaigns.

Advertising your products and your brand is fundamental for growth, but there is a more essential way to gain better traffic and conversion rates, and it’s also a must-have for successful marketing strategies: rich and tailored product information. You may think you have this already under control, but product content is much more than a SKU, a price and a product title.

Many do not realize that digital success starts with item setup.

In times past, item setup would be done in the fastest way possible to get the item salable, and this often translated to providing as little information as possible.

In today's environment, item setup is incredibly critical for viewability to shoppers. As shoppers move from retailer to retailer online, they often focus on what is most important to them as they filter through available items. The more information you supply and the more robust the attributes you include, the more likely your product is to appear in their search.

If information is missing, your product will not be included in searches or filtering. As an example, if someone is searching for “fragrance-free face wash,” but that information is not supplied as part of the item setup and product information, it will not appear as a shopper selects “fragrance-free” as a filter for face wash.  It also matters which categories the product is assigned to and where shoppers will be able to find it.

Also, make sure you have a clear keyword strategy that links your product information to your sponsored search. Keyword strategy is highly important to building your performance flywheel to accelerate growth. Carefully assess: What is your audience searching for? How are they searching for it?

In the end, ensuring you are giving item setup and product information all the love it needs will be worth the investment and will pay dividends in perpetuity down the road.

Step 2: Availability
What’s the real-time availability of your product at the local store? And through online ordering for immediate delivery? Did you know, a Forrester study found that over a third of U.S. consumers would reconsider visiting a store if its in-store inventory isn’t available online?!

Also, consider:

Nearly 3/4 of shoppers agree it’s important or very important to be able to view inventory information for in-store products

Close to 1/2 confirm inventory online before going to the store 

90% use their Smartphones to check inventory and gain other product information before shopping now that online and in-store retail activity are no longer siloed

In-store, shoppers are able to  use geolocation through retail apps to access product availability status

The underpinning of the Phygital world is a highly consistent, seamless experience for the consumer across channels, whether online, on a mobile app, or making an in-store visit. At every point. Every time. And that includes item On-Shelf Availability (OSA) – one of the biggest challenges in Phygital. Whether you’re dealing with forecasted surges in peak buying seasons or unforeseen surges caused by viral TikTok or Instagram moments, you’ve got to have product available wherever the consumer wants it, whenever they want it.  

And we’re not just talking about “in-stock.” If your product is showing as “in-stock” but is still in the warehouse, in its shipping crate in the back of the store, or damaged in transit, it’s not truly available. So your consumer is disappointed. Their expectations haven’t been met. And they don’t think twice about turning to a competitive product (or retailer) to fill the gap you’ve created.  

Poor OSA negates sales and hurts the relationship with your consumer. But there are other significant impacts: 

  • You may lose your digital or physical shelf space or a position in a hard-earned display or organic search 

  • You may significantly decrease your visibility to future customers. For example, Amazon shows only those products on top results that have sufficient stock. By the time you’ve replenished your inventory, potential customers have switched to purchasing a competitor’s product.  

  • You may jeopardize your relationship and access to major retailers. With Walmart, for example, you impact your Marketplace status; inventory management contributes directly to your customer satisfaction scores. Poor On Time in Full (OTIF) and Supplier Quality Excellence Program (SQEP) performance will result in costly fines and penalties. 

To improve OSA in the Phygital world: 
  • Get rid of siloed systems that are hampering your ability to connect and correlate inventory data. Take a unified approach to omnichannel inventory management. Assess current processes and platforms to ensure you can track and manage real-time sales and availability across all omnichannel distribution points and support omnichannel fulfillment and replenishment, from eCommerce and in-store, to call center and mobile, to buy online pick up in-store (BOPIS). 

  • Embrace pilots and test-and-learn opportunities to advance supply strategies. Introduce modernized supply chain technologies that support eCommerce as well as traditional retail supply chain channels or that help merge and combine the two. 

  • Review product packaging and shipping procedures, and make sure you’re working with the right distribution partners to consolidate freight and meet on-time delivery goals. 

  • Use RFID tagging to help with inventory counts.Invest in the capability to digitally label products to meet retailer requirements. 

  • Make sure you’re collaborating with both retailers and internal cross-functional partners (supply/marketing/sales strategy/finance) to develop accurate forecasts and resolve any supply chain interruptions with a sense of urgency. Prioritize production on specific SKUs and/or proactively take advantage of the data that’s offered to help better manage your inventory. For example, Walmart is now requiring all suppliers to subscribe to its Luminate data service, which provides eCommerce data in one consolidated report and a view to sales wherever they occur. (See separate article in this issue for details.) 

  • Understand logistics requirements by channel:For example, requirements to ship direct-to-consumer are different than delivering to a retailer. It can be challenging to find a logistics partner who is excellent at meeting requirements for every channel, so you may need specialized partners for different channels. 

  • Keenly focus on improved supply and demand forecasting, with end-to-end transparency and risk monitoring to avoid shortages and overstocks and ensure business continuity both for routine and seasonal businesses. 

  • Make use of the granular data now available through Retail Media Networks.Ensure you have experienced analytical talent and advanced tools for improved forecasting and to ensure you’re meeting key replenishment metrics. 

  • Make investments in people/process/technology or tools to ensure the most accurate information is flowing between manufacturer and retailer. You want to improve demand forecasting to avoid shortages and overstocks throughout the omni commerce channel to ensure business continuity and maximize sales. 

It’s also important to note that even if you have OSA, it is critical to know your retailer's rules around when you show up available for sale…or when you disappear.  For instance, you could fall under a certain threshold at which point your item is no longer viewable for sale online.  Those few remaining items may be saved for in-store shoppers, making it appear that you are either out of stock or that your items aren’t there or saleable when searched.  Likewise, your products may have distribution in a subset of the retailer’s stores and not the entire chain. Work with your merchant or your retailer’s digital team to understand what is possible in terms of how you can be viewed by the widest audience possible by having a ship-to-home or drop-ship option when physical availability is not possible. 

Providing consumers with a frictionless experience requires an enterprise-wide Phygital approach and actionable strategies.

Stay tuned for Steps 3 & 4.....


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