Note: Today’s post is part of our ‘Editor’s Picks’ series in which we highlight recent posts from our sponsors that provide supply chain insights and advice. This article is from Manhattan Associates and examines the changing nature of retail.
Making predictions about the future of retail — or anything — can be a wild ride. However, retail as a whole has gone through a period where the future is being thrust upon it at an alarming rate. As this has happened, many leading indicators have emerged to shed light on what is critical now and what may be around the corner.
One place to look is the stores. The pandemic has forced retailers to push their limits. Contactless payment methods like pay-per-link have exploded. The sudden demand for in-store fulfillment of online orders increased processing and shipping costs, leading to delivery delays as carriers were pushed beyond their limits. Omnichannel systems, or lack thereof, have been tested daily. And at the height of the pandemic, much of that happened without a single customer showing up at the store.
Later, the same demand was compounded by the sudden surge of curbside pickups. Then, when stores started to reopen, buy-on-line, pick-up-in-store (BOPIS) orders also exploded. Stores have quickly become hubs for online shopping returns.
All in all, the changes that could have happened in a few years happened in a few months. Consumer expectations for service and speed have grown just as rapidly, and there’s no reason to think they won’t continue to rise in the near future.
In terms of interactions between brands and their customers, the status quo has been constantly changing. In fact, 97% of retailers expect BOPIS and curbside pickup to stay the same or increase.
How Retail is Changing
Even before 2020, stores had started serving multiple purposes. They were no longer a separate, isolated channel, but rather part of the overall brand experience. For some consumers, stores can be the start of a shopping journey. For others, it may be a place to take orders or make returns. Today, stores are an integral part of the omnichannel experience, playing a different role for each person.
Despite many recent changes, one thing has remained clear: people have not stopped coming into the store. As consumers shop online more than ever, 48% of American adults say they buy products or services in-store at least once a week, and 51% say they do so more often than that. This is because the stores offer extraordinary convenience through proximity, knowledgeable staff and new smooth services.
Will retail survive as we know it?
It is a certainty that the retail trade will survive. It’s almost as certain that retail, as consumers have known for decades, is forever changed. The rise of omnichannel, the rise of online shopping, and the explosion of new fulfillment options have forced retailers to adapt quickly. For those with legacy technology, operational adjustments occur despite their solutions rather than because of them. That’s because these solutions were designed for the retail business as it was, not the retail destination.
As a result, brands are rethinking the best ways to serve customers who have grown accustomed to new omnichannel conveniences. There is a critical interplay between online experiences and in-store experiences. But the technology of yesteryear is incapable of linking these two channels. While store teams have performed admirably, scrambling to meet new demands, reliance on outdated technology means the experience and profitability have taken a hit. The only way to maintain profitability and deliver the experiences increasingly demanded by customers is through a modern unified omnichannel platform, where point of sale, order management, customer engagement and… execution are linked and work together.
Here are some interesting statistics:
- An increase in the volume of online orders fulfilled in stores led to lower profitability for 79% of retailers
- 72% of retailers plan to increase in-store space dedicated to fulfilling online orders
- 91% of shoppers miss shopping in stores, and “leaving the house” is one of the top three motivators for future store visits
- 100% of shoppers miss the instant gratification of in-store purchases.
Will retail stores exist in the future?
Gone are the days when stores were a single, isolated sales channel. The physical store must now serve several purposes. New omnichannel services are likely permanent fixtures in retail, as shoppers like to be able to buy and return items where, when and how it’s most convenient for them. To build customer loyalty, it will be necessary to continue to offer these amenities. And to maintain margins, true omnichannel solutions are now essential. Success depends on embracing new realities with machine learning technology that delivers customer insights and services that facilitate seamless, seamless experiences at every point of interaction.
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