Retail is heading into a new era according to Stefan Spendrup, VP, Northern and Western Europe at SOTI.
The shopping experience is changing. With the threat of recession, global cost of living crisis and inflation near a 40-year high, customer attitudes are changing. According to the Office for National Statistics, in January this year, food inflation alone hit 16.7%. As a result, businesses and suppliers are facing more scrutiny than ever, battling an environment of constant change and adaptation.
However, it is no longer simply about keeping up with customer expectations but battling to stay ahead of the competition in a period of significant turbulence for the industry. And in this arena, deliveries could be the key to success.
New era, new issues
There are two fundamental parts to the online shopping experience: deliveries and returns. Data from our recent retail report suggests that it is these two areas which are undergoing the most change. Firstly, supply chains are struggling and the knock-on effects of this have been felt across the board. According to the report, 58% of consumers globally reported that items are now more expensive, with 34% saying there has been an increase in wanted items not being available. As a result, customers are having to look elsewhere, meaning the competition for businesses to solve these issues is becoming a growing concern.
Furthermore, the report shows that 31% of consumers reported delivery times being slower than usual, with 28% saying delivery charges are more expensive.
Whereas big retailers such as Amazon seem to be fighting their way through increasing delivery times by now offering specific ‘before 1pm’ delivery slots, this is not something that can be implemented for all. Increasing delivery times means there has been an increase of shoppers choosing to order online and pick in in-store. Statistics from the report published in 2022 showed that 27% of customers would choose this option. Now, in 2023, this figure lies at 34%.
In-store or online?
There has also been a significant increase in the number of shoppers who are choosing to shop in-store rather than online. In 2022, 38% of shoppers said they will continue to shop in-store. In 2023, this has nearly risen to half, with 48% of shoppers now stating this. Such figures show that whilst it is still important for retailers to provide a seamless online shopping experience, in-store shopping must not be put on the back burner. There is clearly a growing preference for shoppers to visit stores in person, and this is an alternative that must be catered for by businesses.
Both options must be efficient, effective and give shoppers more control over their experiences. Only by doing this will companies remain ahead and stay the top choice of their customers.
Improving true omnichannel integration
Capitalising on the opportunities presented by more customers returning to shops relies on investment into store and distribution centre hardware. With retail workforces more widely dispersed than ever before, ensuring that tech infrastructure and company devices are geared up to deliver seamless customer experiences is vital. For instance, in this omnichannel environment, ensuring that customers can make in-store returns of products ordered online, or that loyalty rewards can be redeemed both online and in-store, is crucial.
Research from our distributed workforce report suggests that retail businesses are already making strides to invest in the hardware that in-store colleagues need to deliver better experiences for customers. Indeed, well over a third (35%) of retail businesses have said that the number of devices – including smartphones, SaaS apps, scanners, etc. – rolled out across their sites has increased in the last year.
Integrating these devices, and ensuring better connectivity, however, could be hampered if the sector does not improve on the digitisation of its processes. Our research found that despite improved investment in new tech, nearly 60% of processes within retail businesses were still manual and paper-based, not only limiting the potential of channel integration but potentially also putting customer data at risk.
Streamlining the supply chain
Another aspect that is make or break when it comes to more integrated experiences is the supply chain. Businesses must ensure their supply chain is running smoothly for both their online and in-store shopping experiences to be performing at their best and maximum capacity.
In order to help issues relating to in-store shopping experiences, our findings show that consumers would like retailers to deploy more mobile device technology. This is for three key reasons: to speed up the shopping and checkout processes for customers, to give buyers a choice of how they want items fulfilled, even when buying in person, and to offer real-time availability information.
A transparent experience
The latter relates to transparency within the supply chain. Responses such as these highlight the need for businesses to be open with consumers throughout the shopping experience, whether this is in relation to deliveries or availability. By ensuring the customer remains fully up-to-date with the latest information throughout, businesses will significantly improve the all-important customer retention and those who do it best will remain ahead. Improving and then maintaining customer experience is now more important than ever for businesses and by ensuring transparency with both in-store and online shopping processes, they will be able to manage this.