Stores need e-commerce, yet e-commerce needs stores. It’s complicating the business from merchandising to fulfillment, and building a seamless omnichannel experience
Here is a look ahead to the Retail trends in 2020.
1. The purpose of stores changes
Both direct-to-consumer brands and legacy retailers are re-evaluating the purpose of a store.
Casper, in 2018, announced it planned to open 200 stores across North America. Prior to that its foray into physical retail had been through partnerships with Target and West Elm. Warby Parker now has more than 100 stores and Bonobos has more than 60. All told, digitally native brands are set to open 850 stores in the next five years, according to a report from Real Estate firm JLL.
It’s become necessary for survival. According to Ray Hartjen, marketing director at RetailNext, DTC (Direct-to-consumer) brands are pressured into opening brick-and-mortar locations because the cost of customer acquisition when operating solely online is so high.
At the same time, legacy players, especially those in malls, are finding it necessary to shrink their store footprints. Store closures in 2019 exceeded 9,000 in the U.S., far surpassing openings, according to Coresight Research. As consumer habits evolve, companies are searching for ways to evolve their stores to best serve customers’ needs.
2. BOPIS packs a punch
While “buy online, pick up in-store” (BOPIS) services aren’t new, they will continue to help the bottom line of those retailers that can deliver on logistics and speed.
This past holiday season shoppers took advantage of BOPIS services in order to save money. Additionally, 49% of consumers stated that in-store pickup is quicker than at-home delivery. That’s an advantage when delivery is going through a time of upheaval. In December, for example, Amazon banned third-party sellers from shipping Prime orders with FedEx Ground or Home, citing a “decline in performance.” In a move that highlighted those woes, FedEx announced that the company would cut air freight capacity after a 50% margin loss.
BOPIS services may benefit traditional brick-and-mortar retailers, by cutting down on last-mile expenses and turning stores into a competitive advantage over online retailers, including Amazon. In a November interview with CNBC, Target CEO Brian Cornell noted that the retailer’s costs drop 90% when customers utilized BOPIS.
3. 2020 is The Year of Omnichannel
In the last 10 to 15 years, many organizations have viewed each marketing channel as completely distinct from any others. There was often an explicit segmentation between offline and online. For these brands, it was frustrating that their ability to understand the customer experience was scattershot and inconsistent. Therefore it was challenging to develop a cohesive view of the customer. Worse than that, customers don’t like this state because, if they interacted with the brand via multiple channels, each time they reached out was like the first contact all over again.
These old ways are about to change. The move to omnichannel has been building for the past few years, and in 2020, an Omnichannel approach to the customer experience is the gamechanger. This approach is the full integration of data, customer policies/experience, and systems across all modes of customer interaction. Moving to an omnichannel perspective may be the most important project for improving the customer experience.
Omnichannel delivers substantial benefits to both brands and customers and offers so much differentiation that organizations quickly gain critical competitive advantage.
One of the core benefits is that omnichannel is an optimal way to generate a comprehensive set of customer data. The effective use of this data is essential to improving customer experience and making successful changes to their engagement.
From the customers’ perspective, there is less frustrating than having to use different channels depending on what task they want to accomplish. In addition, having to re-enter information when switching from phone to online leads to a negative experience. In much the same way that the business wants a consistent customer view, customers themselves want consistent interactions with the brand.
Deploying an omnichannel strategy is also a critical component that supports the business’s overall desire to become a modern, digital, data-driven organization. Businesses that are effectively using analytics can integrate more of their customer journey data into other broader business analytics activities, therefore, implement more well-thought-out strategies.
Source: CIO, Retail Dive