Ross Perot Jr. of Perot Companies and Hillwood argues the coronavirus will change future real estate projects.
The coronavirus pandemic has steered a new wave of the digital revolution, pushing many large retailers to deliver on high demands and meet new consumer expectations.
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INDUSTRIAL REAL ESTATE DEMAND SURGES AMID PANDEMIC E-COMMERCE BOOM
When JOANN Fabrics, the nation’s leading craft and fabric retailer, and its chain of around 865 stores had a 300-400% increase in demand for mask-making supplies, the company revamped its e-commerce system to keep up with holiday volume orders and prepare for a potential new generation of shoppers. Like most retailers, JOANN's experienced a major shakeup from March to April when states required non-essential businesses to shut down. Those public health order effectively closed 60% of JOANN's stores to customer traffic. At the same time, the fabric retailer’s main channel of orders flipped from in-store sales to online from regular customers and hospital networks in need of mask-making materials.
Customers complained that the fabric store had been the only place they knew to get all the raw materials to make masks or help provide PPE, according to Varadheesh Chennakrishnan JOANN Stores chief information officer..
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“We were not set up from an online solution or order management to actually cater to that kind of a holiday volume,” Chennakrishnan told FOX Business. “Our platform could not perform to the online traffic surge, which required us to improve and increase our capacity.”
From a fulfillment standpoint, JOANN's needed more locations that could enable shipping online orders from stores. Around 95% of the company’s online orders are shipped from stores, while only 5% of orders are from distribution centers with a remaining portion as drop shipments.
In immediate response to the surge, JOANN’s delayed order fulfillments for about 10 days and worked to scale up the system’s store capability by increasing the number of stores that could accommodate shipping. In a speedy transition, JOANN’s went from having less than 100 stores that could ship online orders to around 260 stores.
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In order to step up its buy-online-pick-up-in-store service and enact curbside delivery, JOANN’s enlisted IBM’s Sterling order management platform to beef up its e-commerce presence. IBM’s cloud-based system helped to orchestrate orders, leverage more stores as part of its fulfillment network and resolve the website and management system issues, from processing high volume orders at the same time to connecting with third-party solutions to basic browsing.
“The buy-online-pick-up-in-store and curbside pickup has become a very critical thing to enable,” Jeanette Barlow, IBM vice president of offering management, told FOX Business. “We are seeing this as a permanent shift in retailers’ revenue sources.”
Although JOANN’s offered buy-online options before to the pandemic, the store introduced curbside pickup as a pandemic-related means to survive store closures. Stores are now open, but consumer habits have already changed because of the restrictions put in place because of coronavirus. Curbside pickup will remain an option for customers who do not feel comfortable going into stores, and those who have acclimated to a new level of retail convenience.
“There is a whole classification of consumers that are being exposed to these convenience models like buy-online-pickup-in store or ship from store that didn't necessarily have experience with them before,” Barlow said. “In value retailers, that wasn't something they had ever expected.”
JOANN’s will continue to develop smart technology that will enhance the customer experience by tracking customers to ensure a more seamless order to pick up process. In addition, it will work on making distribution centers more productive for shipments.
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August 21, 2020 at 05:49AM
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JOANN Fabrics pivots e-commerce strategy to meet new customer demand - Fox Business
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