October 9, 2020
As the world moves online, bricks-and-mortar retail is struggling to keep up. In the U.K. alone there are over 10,000 fashion-related searches online every minute and shoppers now look and purchase new clothing whenever and wherever they are inspired. A post-pandemic world and the risk of a second national lockdown in the UK threatens the industry further. In the age of digital, Dropit CEO Karin Cabili still believes in the power of bricks and mortar, and how by working together it can truly thrive.
Founded in 2016, Dropit is a multichannel digital platform for brands and consumers that offers a more flexible and sustainable delivery solution through its multiple B2C andB2B services ranging from coordination of handsfree delivery for shoppers, to software and strategies that turn retail and shop locations into distribution points to rapidly solve stock fulfilment challenges.
Retail is a part of Karin’s DNA. Growing up within a family of retail experts gave Karin a unique aerial perspective of the retail fashion supply chain. Despite many of her peers advocating for digital, Karin’s experience of bricks and mortar at a time when the world was going online has allowed her to see ways in which the industry can thrive by unifying the two. From the very beginnings of production to shop floor sales, Karin was fascinated by learning how consumers engage with products and stores across the globe. Her passion for bricks and mortar grew, leading her to knock on the doors of top retail executives to understand the challenges they faced. After spending time listening to their strategies for dealing with the growth of e-commerce, Karin set about creating a product that enables retailers and shopping malls to meet their shared customer expectations, offering brands not only a solution to their logistics challenges but an opportunity to thrive and evolve within a shared network.
Understanding nuances across the whole supply chain in this way, Dropit can see where and how an industry that in the UK employs 2.9 million people and generates £394billion sales needs to change in order to evolve.
Karin believes 2020 could hail a new era for retail. Below, she shares her thoughts.
The retail fashion supply chain is an interesting area that employs so many and I feel a great responsibility towards it. With the spotlight continuing to shine on the current economic situation and recession, retail’s rapid response to consumers and their ever-changing behaviours could not be more important. With more shoppers staying local, Europe and the UK’s most renowned shopping districts are struggling in the absence of office workers, local shoppers and tourism. London’s West End footfall was down 75% in May compared YoY and 63% in August. Retailers are coming up against factors that wouldn’t have historically affected a consumer purchasing decision, such as wearing a facemask and risk of virus contamination, adding further challenges for them to navigate.
Looking further back, the appearance of online channels have also long caused retailers issues. Consumers today expect an item to be in stock and delivered quickly. In order to meet these demands, retailers have been forced to produce far more inventory than they can sell to ensure that all of their retail locations and online facilitation warehouses are fully stocked. Dealing with a complicated stock allocation guessing game, retailers are forced to pay high shipping costs in order to deliver products from their warehouses to their customers as quickly as possible. Because both online and offline channels require inventory at all of their points of sale and distribution, brands end up manufacturing 30%-40% more inventory than they can sell every year. That adds up to a huge monetary waste for the brand and can have a devastating effect on the planet.
“Dealing with a complicated stock allocation guessing game, retailers are forced to pay high shipping costs in order to deliver products from their warehouses to their customers as quickly as possible.”
In addition, because of high return rates from online shoppers, items returned late in the season return to warehouses well after the season has ended. This forces brands to heavily discount the items or offload them to outlet stores, making little to no profit. This has only been heightened since Covid, with many retailers having dived straight into markdown since reopening in July in order to shift a backlog of stock.
Viewing the industry with a ‘supply chain perspective’ Dropit looks at the entire process of retail. From sourcing materials, to production, to the consumer journey, be that high street or shopping mall, ending with how product lands in the consumer’s hand. Old systems from the early days of e-commerce are still in place in most businesses and these old fashion legacy infrastructures and technologies are working against each other and the modern demands of retail today.
The year 2020 marks a new dawn for retail. Dropit aims to help retailers by creating a shared platform in which a retailers’ already established systems can work together in order to drive individual revenue for a bricks and mortar retailer or shopping centre and in turn, helps to nurture and revive the industry. One of the principles that Dropit was founded on is understanding the value of the network effect; being a part of a retail community in order to optimise processes and costs and give a better shopper experience. Dropit solves a retailer’s challenges by providing easy to implement fulfilment from store solutions and a consumer experience service.
These services that Dropit offer are innovative, unique and simple to implement as they use API to seamlessly join up smart sourcing, logistics, and customer experiences. This approach, connecting all elements within the supply chain, creates a shared economy that benefits many. By encouraging retailers to champion the network effect and see the value in community over competition, Dropit’s ambition is ultimately to ensure the survival of bricks and mortar retail.
Two of Dropit’s main products; ‘Dropit Fulfillment’ and ‘Dropit Handsfree’ are clear examples of how its restorative, innovative multichannel platform works with established systems within a retailer’s infrastructure to achieve success.
‘Dropit Fulfillment’ is a product that enables stores to act as distribution centres by providing an easy to implement fulfillment from store solution. Because this platform enables retailers to use all of their storelocations as digital warehouses and Dropit automatically manage all inventory and delivery logistics, retailers no longer need to produce more inventory than is needed for a given season. This results in huge savings for the brand.
By using smart sourcing, Dropit identifies the store which holds an online customer order closest to the end delivery address, allowing maximum utilisation of stock. Fast and same day and next day delivery is given at competitive prices owing to Dropit’s network of couriers.
“Whilst the physical enjoyment of retail will always be something people long for, retailers need to be open to evolving the shopping experience and work as a community...”
Already rolling out prior to Covid-19, ‘Dropit Fulfilment’ is a service that helps shield retailers and potentially unused stock from the effects of another lockdown by effectively turning brick and mortar stock rooms into local distribution points to rapidly and efficiently facilitate orders. ‘Dropit Handsfree’ allows retailers to incorporate another level of convenience for shoppers. Looking to the high street or shopping centre consumer experience, insights captured by Dropit’s data analysts’ reports that shoppers feel more comfortable visiting stores and enjoying dining and leisure facilities when they no longer have the hassle of carrying bags. The app-based service enables users to ‘drop as they shop’, giving shoppers greater flexibility in how they spend their day and journey choices, while providing a safe, secure and affordable shopping experiences. A one day Dropit pass on the app allows shoppers to have unlimited
drops in unlimited stores, combining in one convenient and affordable delivery with minimal contact. Whilst the physical enjoyment of retail will always be something people long for, retailers need to be open to evolving the shopping experience and work as a community towards the one goal of creating accessible, safe and convenient environments for the consumer.
In a post-COVID world, the need for these types’ retail experiences has never been greater – and this will be the standard expected by consumers. Using ‘Dropit Handsfree’ means not only can shoppers avoid public transport and choose to walk, cycle or drive, but they no longer need to be weighed down by bags or worry about store to store bag contamination. As a result, Dropit is finding that shoppers using the Dropit app tend to shop for longer and spend 4.5 times more money per customer. With more brands coming together to offer this service, or utilising their physical stores as distribution centres, access to the consumer and in turn sales can be greater for all.
It is not good enough for retail to merely survive, it needs to flourish. While we can’t predict what lies around the corner, we can certainly prepare. The next few months will prove difficult for retail, but could it also be the making of an industry in much need of an overhaul? By innovating the system, retail will survive and if individuals in the sector can work together and operate as a shared economy, everyone can benefit from every component within the ecosystem.
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