Enterprise software vendors are forecasting a sunny outlook for cloud-based technology tools as retailers look for ways to handle the substantial shift from brick and mortar to e-commerce shopping habits, two of the sector’s biggest players say.
The nation’s sporadic vaccine rollout will eventually encourage some consumers to return to retail storefronts, but much of the Covid shift online will prove to be permanent, according to a research report by SAP SE and The Economist Intelligence Unit.
New online shopping habits will likely decrease more for older cohorts (9% for Baby Boomers and 6% for Gen Xers) than for the younger demographic (4% for Millennials and Gen Zers), the study found. But with estimates showing up to 40% total e-commerce growth in 2020, much of the increase is locked in. The mix of products in digital shopping baskets will also change, as consumers have learned to rely increasingly on online shopping for both essential and nonessential items, SAP said in remarks released at the recent National Retail Federation (NRF) virtual trade show.
In response, many retailers have accelerated their plans to shift processes from manual to digital, as they create or strengthen tools like e-commerce websites, mobile apps for smartphones, in-store order management systems (OMS), and consumer databases.
“Last year, I pulled my three-year road map into one year so we could provide offerings like home delivery, curbside pickup, and contactless shopping,” Art Sebastian, vice president of digital experience at the midwest convenience store chain Casey’s, said in an interview.
With 2,200 stores in 16 states, Des Moines, Iowa-based Casey’s sells a bundle of goods that includes not only c-store staples like groceries and fuel, but also fresh pizza made in on-site kitchens. The impact of the pandemic sent ripples through the chain’s catalog of inventory, as hungry, homebound customers drove a 20% jump in annual pizza sales and began buying larger servings of other foods, changing from single serving to family-sized chip bags and from 20-ounce soda bottles to 24-packs, Sebastian said.
The company shifted its nascent digital transformation effort into overdrive, working with software vendor SAP to use the Commerce Cloud package in SAP’s S/4HANA enterprise resource planning (ERP) platform, Hybris e-commerce platform, and Gigya tool for managing customer identities and profiles.
Additional initiatives included a store employee enablement program that gave workers digital tools like apps for in-store picking, shelf inventory management, and text-based customer communication. “We think of each store operating like a miniature fulfillment center, even though it’s only 5,000 square feet,” Sebastian said. “But that’s what you have to do when you have a day’s worth of supply on the shelf that was designed to meet the needs of customers walking in, and you add demand from phone orders and our mobile app.”
Another ERP vendor in the sector describes some similar patterns, as Austin, Texas-based Oracle said today that the pandemic has changed the way people shop, making it critical for retailers to better understand demand and move merchandise accordingly.
The company pointed to its Oracle Retail Merchandising Cloud Service (ORMCS) product as a potential solution, saying it provides retailers with a unified foundation to manage and control critical merchandising activities, such as purchasing and distributing goods, fulfilling orders, and processing and closing out invoices to ensure accurate financial data.
“The past year has been one of the most challenging in retail history. Retailers had to throw out the playbook and adapt to everything from complete in-person shutdowns to unexpected surges in certain products,” Lara Livgard, senior director merchandising, analytics, and enterprise, Oracle Retail, said in a release. “Seeing our customers realize the benefits of our merchandising solutions faster than ever in this environment is validation of the innovations we are delivering in the cloud.”