Want to Read More?
Paid BizTimes subscribers get unlimited access to all Insider content and much more. Learn more in our Insider FAQ.
Already an Insider? Log In
Or click here to purchase a paywall bypass link for this article.
Think of any retail industry trend on the rise prior to 2020, and it was more than likely accelerated by the COVID-19 pandemic.
The rise of e-commerce and digitization is perhaps the most obvious. A preferred mode of consumption for many shoppers, it suddenly became the only mode as non-essential retailers were forced to temporarily close their doors.
Consumer-facing businesses, ranging from mom-and-pop restaurants to big-box chains had to rely on digital engagement and online sales through e-commerce sites, mobile apps and social media platforms. Many companies have invested heavily in digital tools and new store technology to meet consumer expectations that prioritize convenience, health and safety. To that end, new fulfillment options such as curbside pick-up have become the norm for most retailers and are expected to stick around.
Industry-wide digital acceleration has also set the tone for businesses gearing up to launch in a post-pandemic environment. New brick-and-mortar concepts aren’t entering the market with in-store business as their sole revenue stream, even if they could be profitable under that model. Retailers need to have their e-commerce game figured out from the jump.
2A Wine Merchants, a new wine shop and tasting room opening soon in Milwaukee’s Historic Third Ward, is an example of this trend in action. Its e-commerce site will allow customers to place orders for in-store and curbside pick-up. Owner Rob Levin said it was a necessity for his business based on how accustomed people have become to the ease of ordering at the click of a button.
E-commerce also allowed retailers such as Milwaukee-based Purple Door Ice Cream and Waukesha-based Pat’s Ribs Place to begin shipping pints of ice cream and jars of barbecue sauce across the country during the pandemic.
However, digitization has also put pressure on retailers to offer an experience in-store that shoppers can’t find online. That’s what New Berlin-based Burghardt Sporting Goods has aimed to do with its new sports performance center that opened earlier this year for local sports leagues. The company expanded its business model because operating as a retail store, selling hard goods that shoppers can easily order online, didn’t seem viable in the long run, said owner Brian Burghardt.
National retailers aren’t immune to competitive pressure, largely driven by e-commerce giant Amazon. Menomonee Falls-based Kohl’s Corp. has made massive investments in technology and digitization to keep up. The company recently opened its sixth fulfillment center, in Etna, Ohio. The 1.2 million-square-foot, next-generation facility was built in an effort to meet growing online sales demand. With automation and technology, the operation was designed to be three times more productive than Kohl’s traditional e-commerce fulfillment centers.
Kohl’s has seen digital sales increase over the past decade from 4% in 2010 to 40% of total business in 2020. Amid the COVID-19 pandemic last year, digital sales jumped 16% over 2019.
The Kroger Co., the parent company of Milwaukee grocery store operator Roundy’s Inc., is also moving toward a smarter supply chain. The Cincinnati-based grocery chain is building an automated customer fulfillment center in Pleasant Prairie. It is one of 20 facilities Kroger will open in the U.S., in partnership with U.K.-based online supermarket company Ocado. The building will rely on robotic and manual processes to select products for delivery. Products will be stored, selected and delivered to residences with vans headed straight from the fulfillment center.