What's Happening?
A new report from Locus Robotics indicates that physical stores remain the most frequently used purchase channel for U.S. apparel, beauty, and skincare shoppers, despite the rise of e-commerce. The survey of 1,000 U.S. consumers found that 48% used a physical store for their
three most recent purchases in these categories. This contrasts with digital purchasing, which is spread across five channels: brand or retailer websites (32%), online marketplaces (31%), retailer apps (25%), resale or recommerce apps (19%), and social-media checkout (17%). The report emphasizes that fulfillment operations must support both store replenishment and direct-to-consumer (DTC) orders from the same inventory. Store replenishment typically involves larger quantities and scheduled deliveries, while DTC orders require discrete picking and parcel shipment for individual consumers. The challenge arises when both types of orders peak simultaneously, straining resources like labor, inventory, and infrastructure.
Why It's Important?
This finding is crucial for U.S. businesses, particularly DTC brands, as it underscores the enduring relevance of brick-and-mortar retail within an increasingly omnichannel landscape. The report challenges the notion that physical stores are becoming obsolete, instead positioning them as integral components of a comprehensive fulfillment strategy. For DTC brands, this means that solely focusing on online sales may limit their market reach and customer satisfaction. The need to manage both large-scale store replenishment and individual DTC orders from a shared inventory pool presents significant logistical complexities. Companies that can effectively integrate these diverse fulfillment workflows stand to gain a competitive advantage by meeting varied consumer demands and preventing stockouts. This impacts investment decisions in warehouse automation and supply chain technology, as businesses seek flexible solutions that can adapt to fluctuating demand across multiple channels.
What's Next?
Businesses, especially those in apparel, beauty, and skincare, will likely continue to invest in flexible fulfillment solutions that can seamlessly handle both store replenishment and DTC orders. This includes adopting advanced warehouse automation technologies, such as the Locus Origin and Locus Vector robots mentioned in the report, which are designed to support different order profiles within the same operational environment. There will be a continued focus on optimizing inventory management systems to ensure that products are available across all channels, preventing situations where an item is in stock but unavailable to a specific customer due to workflow constraints. Furthermore, the report suggests that stores may take on new roles, such as discovery, pickup, fulfillment, or returns centers, requiring systems that can adapt to these evolving functions. This will necessitate closer integration between physical retail operations and e-commerce logistics.
Beyond the Headlines
The report's insights into consumer behavior, particularly among Gen Z, reveal a deeper trend: shoppers are not choosing between digital and physical channels but are fluidly using both. This 'phygital' approach to shopping, where social media discovery leads to in-store try-ons and subsequent app purchases, highlights the need for a holistic customer experience. The challenge for businesses extends beyond logistics to understanding and catering to this integrated shopping journey. Ethical considerations arise in ensuring equitable access to products across all channels and managing customer expectations regarding availability and delivery. The complexity of managing shared inventory for diverse order types also brings to light the environmental impact of fulfillment, as efficient logistics can reduce waste and optimize transportation. Ultimately, the success of DTC brands and traditional retailers alike will depend on their ability to create a seamless, responsive, and sustainable omnichannel ecosystem that mirrors the modern consumer's dynamic purchasing habits.
