ADOPTING A HYBRID BUSINESS MODEL IN THE RETAIL INDUSTRY

Hybrid business models in the retail space blend traditional, brick-andmortar operations and aspects of e-commerce, such as buy online, pick up in store (BOPIS).

Stores have seen a massive increase in the number of customers using BOPIS and those making purchases from digital and physical stores. It was becoming increasingly popular before the pandemic, especially for food and beverage retailers, to offer mobile ordering services and other convenient shopping options. COVID-19 merely accelerated the pace at which these options were offered.

Fighting for a customer’s attention is becoming increasingly hard, especially with all modern consumers’ options, from which store to shop at to what brand they want to buy.

Brick-and-mortar stores can no longer rely on foot traffic to keep revenue coming. It’s becoming increasingly necessary for retailers to incorporate some aspects of e-commerce into their business models.

How Hybrid Models Benefit Retailers

Several benefits make hybrid retailing a solid choice for most retailers, but this business model may not be effective for every brickand-mortar store. Here are some ways hybrid models benefit stores and their customers.

Strengthens the Customer's Post-Purchase Experience

Although customers' post-purchase experiences are sometimes overlooked, they can provide retailers with plenty of insights about their hybrid store's performance. For example, if most customers doing BOPIS return their items due to damage, retail managers can stress the importance of handling packages carefully to their employees.

A top priority for any retailer is to reduce the number of returns coming back into the store. Hybrid models allow customers to mail products back using online shipping labels or make in-store returns. This degree of flexibility helps the company and its employees.

Tech Integrations Drive Efficiency

Another benefit of hybrid business models in retail is that employees can reach higher levels of productivity and efficiency. Hybrid retailers rely on digital technologies — such as a good point of sale (POS) system and an e-commerce platform — so employees throughout the supply chain can benefit from automated tasks.

Modern retail platforms can leverage artificial intelligence- (AI) and machine learning- (ML) based solutions to take over monotonous tasks or those prone to human error. Gaining more supply chain visibility allows for better management, which is critical in the retail sector.

Provides Customers With More Options

Customers have a few options to choose from when engaging with retailers in a hybrid shopping environment. BOPIS, having a complete shopping experience or visiting a store and ordering products online to be sent directly to their doorstep are some examples.

These options accommodate techsavvy customers and those looking to avoid long checkout times in a brickand-mortar store. Brands that offer their customers many purchasing options can build brand recognition and loyalty more easily.

How to Implement a Hybrid Retail Model

Here are some tips retailers should consider if they want to or are considering adopting a hybrid model in their stores.

Give Customers the Freedom to Choose

The retailer must give customers plenty of purchase options with a hybrid model. Another way to meet customer expectations, especially in the e-commerce space, is to allow them to purchase multiple sizes, colors or products with free returns. Take the lingerie brand SOMA, for example.

The company allows customers to purchase bras with a risk-free return policy. People can even wash their undergarments before returning — these policies go the extra mile to keep shoppers satisfied and returning.

Offer Flexible Payment Options

Another way to implement a hybrid model is to accept several forms of payment from customers.

Things like Apple Pay, Google Pay, PayPal, Venmo and other financial services are now accepted at major retailers and big box stores. Retailers looking to go hybrid should follow suit.

Provide Customized Shopping Experiences

Every customer, no matter what retail store they're shopping at, wants a customized experience. There are a few ways to incorporate customized shopping experiences on an e-commerce platform, including:

● Creating offers based on specific user behaviors while browsing

● Personalizing email marketing campaigns

● Offering upsells and cross-sells

● Showing products that align with a customer's geographic location

Companies can track metrics, such as items sitting in a customer's online cart, product pages visited by a user and other insights.

Leveraging Hybrid Models in an Evolving Retail Landscape

The retail world is constantly changing. Retailers must be willing to adapt their business models based on the changing needs of the industry and their consumers. Companies should determine if a hybrid business model is right for them and if it will prove beneficial in the long run.

Emily Newton

Emily Newton is the Editor-in-Chief of Revolutionized Magazine. She has over six years covering stories about warehousing, logistics and distribution.