The evolution has been spectacular. A couple of decades of digital innovation has upended thousands of years of simple business-customer transactions.
The birth of ecommerce has transformed the business world and shopping world. But that was just the beginning. eCommerce is not the end but the means of new and improved ways of shopping and providing customer experiences.
eCommerce enabled businesses to build multichannel experiences for consumers, in which each channel (the store, the website, email, phone) was a separate pathway towards helping consumers buy what they wanted.
But with deeper evolution of the technology around ecommerce, and the greater complexity of not only creating better user experiences but managing them and making them agile enough to pivot towards new developments in products and consumer behavior.
One of qualitative changes was to take these disparate channels of a brand that acted as individual pathways to purchase and integrate them into a unified pathway in which each channel communicates with the others so that whether a consumer visits its website, calls customer service, or communicates to the brand on social media, a brand’s customer-facing staff are equipped with a singular source of user data to help them.
Comprehensive digital solutions such as Salesforce Commerce Cloud have helped the leading brands and retailers provide omnichannel experiences for their customers.
This omnichannel drive that once separated great consumer experiences from the rest is fast becoming a necessity for all businesses as the expectation. There is a thick book of statistics that demonstrate the strengths and expectations of omnichannel:
- 90% of customers expect consistency across channels yet only 61% find it easy to switch between channels.
- Omnichannel strategies are capable of increasing year-on-year customer retention by 91%.
- 64% of consumers expect to receive real-time assistance across any channel they’re using.
- Omnichannel shoppers have a 30% higher lifetime value than shoppers who use only one channel.
This year, and into the beyond, the highest-performing brands and retailers will all build a strong omnichannel experience, as ecommerce’s share of total retail makes massive strides.
Forecasting what the commerce environment will look like in a post-pandemic world, we can see that the industry that is set to make the furthest strides forward is the sports and leisure industry. We saw ecommerce make up 19% of total pre-pandemic retail sales, which is set to hit 38% post-pandemic – an increase of 19%
This is followed by the mass merchandise industry that is set for an increase of 12%, and then both the home improvement industry and the apparel industry are expected to see increases of 11%.
“The reason that omnichannel is critical for retailers in 2021 is because the customer demands it,” said Jess Huang, a partner at McKinsey & Company. “The customer is omnichannel. In fact, they don’t think about channels at all. They just think about shopping and buying. So to meet your customers where they are, you have to be omnichannel.”
A survey by McKinsey & Company found that among North American retailers, most of them expected their ecommerce sales to make up 25-50% of total sales among some categories.
The difference between selling something in-store and selling something online has undergone a process of convergence. For customers, “will really see the brick-and-mortar store as a part of the shopping journey,” according to Raj De Datta, CEO of a digital experience platform. “They will have done their research online. They will have comparison-shopped online.
“They will have, perhaps, consulted an app. They will show up in the store. They may research more, and they may or may not buy there. Then they will go home and continue the purchasing process.”
Old strategies of separating out the channels of a business belong in the bin if the plan is to reach maximum potential. “Our digital platform is the front door of our store,” said Craig Menear, CEO of The Home Depot. “Customers are taking us down that path — purchasing online and using online platforms as the start of the shopping experience, even if it ends in the physical world.”
The effects of this trickle down to how supply chains function. In the traditional setup, it’s common for retailers to purchase orders weeks and months in advance, orchestrating them to their warehouses, yet neglecting to think about next-day deliveries and immediate in-store pick-ups.
Adapting supply chains is one way to become more competitive. This would imply expanding fulfillment capabilities like drop shipping, automating parts of the process, shipping from inventory in transit.
One of the strong performers in omnichannel is grocery chain Kroger, who announced 20 new delivery centers across the country, as well as investing in automation tech to collect the products assigned for deliveries – their robots can actually pluck 50 products up in under 5 minutes.
According to its CEO, Kroger is expecting to receive ecommerce sales north of $10 billion by 2023, in which their investment in tech and its supply chain is playing a big part.
As Jess reminds retailers, they will need to “build the data and analytics capabilities that are necessary to underpin all of the new ways of working.”