Office Outlet deliver endless aisle using tradeit
When they acquired Staples UK, Office Outlet also acquired £56m worth of stock. As a new business, it didn’t make commercial or economic sense to have such a large stock holding, so they set about successfully lowering it to £12-14m. Not only that, they didn’t want to support and service the huge stores that Staples UK had been operating, so also reduced the average store footprint from 20,000 ft² to 5,500 ft². Whilst these moves helped the business becoming leaner and more agile, it was important they weren’t at the expense of sales.
In reducing their stock holding, and significantly scaling down the size of stores, they risked not being able to fulfil orders. It’s frustrating for customers and an obvious barrier to sales when products aren’t in stock, hardly ideal for a new retailer trying to grow their business and build their brand. To combat this, they set themselves the lofty ambition of trying to convert every single customer who entered a store with purchasing intent, recognising that this would mean smarter replenishment of stores, but more importantly, the clever deployment of technology to help bridge those potential stock gaps.
Staples UK’s ecommerce business was not part of the acquisition and their till system was 20 years old, so there was no suitable, online or in-store technology already in place to develop or expand, which would help convert these in-store customers. Having launched their ecommerce site using tradeit last March, their longer-term plans recognised the need to leverage technology which would help merge their online and offline channels, and develop a customer centric approach. As such, the initial online launch was quickly followed by services including Click & Collect, Click & Reserve, Web2Print, B2B accounts and a real-time online store stock checker, with rapid fulfilment from store stock to follow. It was this existing relationship with Red Technology, and the capabilities of tradeit, that led them to use their endless aisle functionality in stores to help bridge these stock gaps too. As Office Outlet’s Group IT Director explained,
“Being able to design the system with Red was crucial and tradeit is the foundation on which all our omni-channel services are built. It meant we could tweak what they already had and tailor it to our exact requirements. That’s just not something you’re going to get off-the-shelf.”
As the system runs using their existing ecommerce platform, it’s very simple, cost-effective and intuitive for staff to use. If you walk into any Office Outlet store you’ll find proactive sales associates, armed with tablets, ready to give customers instant, accurate, and up-to-date product information and availability. This makes it easy for them to find stock on a customer’s behalf, both in stores and from online inventory. If an item they want is out of stock in store, then staff can instantly place an online order for it and have it delivered directly to any address, or to any Office Outlet store for collection, the following day (at the latest). And, in order to comply with PCI-DSS regulations, payment is taken via in-store PDQs so staff never have access to customer card details or passwords.
Managers from every store received a hands-on demonstration of the technology at an internal IT conference, and they in turn educated in-store staff. Despite initial reservations, once they understood the benefits, feedback has been extremely positive. Orders placed using endless aisle are assigned to store sales targets, rather than web sales, so there is no conflict. Customers are happy and precious sales opportunities are not lost. It’s a win, win situation.
A trial was launched in December in 10 stores, and on the first day of trading, over £3,000 was taken using endless aisle - that’s additional revenue, not cannibalised from other channels. When this is extrapolated across all stores it will account for roughly £30,000 each day, which when spread across the year equates to almost £10m per annum. Not a bad return for their initial investment in technology and training! In fact, those estimates have already been adjusted upwards in light of the service exceeding the initial forecasts, meaning they are expecting it to account for far more than the £10m predicted. They’re also now converting over 60% of in-store customers too, which again is almost unheard of! As store staff get more familiar with the system and it expands to B2B customers, these figures will grow further still.
“We now effectively have 93 distribution centres to fulfil any order, to anybody, from anywhere, by the next day. I can’t emphasise enough how it’s affected our viability and profitability. We’re breaking new ground for UK retailers, nobody is offering the scope of services we are and to deliver them all within 9 months of launching is unprecedented.”
Group IT Director, Office Outlet
Whilst the main objective of the project was to reduce stock holding but still convert all store visitors with purchasing intent, there have been other benefits too. They’ve seen an increase in conversions, brand new customers, footfall, and data capture in stores whilst positive feedback and ratings have also surpassed all of their main competitors on the popular review sites. Significantly, despite the reductions in store size and stock holding, they’re approaching the nirvana of almost 100% availability thanks to endless aisle and their other services. Whilst many retailers are struggling, Office Outlet have shown that using technology to enhance their customer experience is making a real difference to their bottom line.
The project has now been shortlisted for the Retailing Technology of the Year award at the National Technology Awards 2019. See the shortlist.
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