It was a great couple of years for the ecommerce industry as sales skyrocketed during the pandemic. However, with the pendulum swinging back to pre-pandemic levels and the reopening of physical stores, the retail sector has started readjusting itself. Retailers are starting to worry about their returns from the investment that was made to set up their ecommerce platforms. Adding to the existing pressure, high inflation is driving up costs, while increasing interest rates and the looming recession are lowering consumer spending. A survey released by Dye & Durham Ltd. found that 30% of Canadians believe they are already in a recession and 53% believe they are imminently entering a recession. If the industry tracks in the same manner, it is now more important than ever for retailers to strategize and find ways to sustain and promote profitability.
Retailers need to remember that consumers are in the driver’s seat of their shopping experiences and the right way to shop is whatever, wherever, and however the customer prefers. An accelerated omnichannel transformation is the need of the hour.
The most ideal way for retailers to move forward is to understand consumer shopping behaviors and adapt their offerings accordingly. While shoppers are making their way back to brick and mortar stores, ecommerce has penetrated parts of the population that had never been online before, and a complete reversal is unlikely. Consumers are now looking for an integrated and complementary experience that allows them to blend both physical and online retail spaces easily and seamlessly. Here are some of the trends that will allow businesses to remain profitable in this evolving retail environment.
Sustainability is the buzz
High attrition, higher tech infusion
Having the right amount of inventory at the right time and in the right place - and having that visibility across scattered stores and warehouses - is more important than ever. Inventory unification through an omnichannel order management system allows businesses to break the silos between all their inventory sources, and merge online and physical inventories creating a “sell from any channel, fulfill from any location” approach. This, in turn, promotes omnichannel sales growth, fewer markdowns, the ability to move inventory quicker, and a reduction in the time and cost in fulfilling orders.
Sustainability has moved up the agenda this year. Despite the inflated prices, 66% of US adults and 80% of young US adults (age 18-34) are willing to pay more for sustainable products, according to the Business of Sustainability index by Green Print. Consumers are highly concerned about the environmental impact of the products they buy and have modified their purchasing decisions to buy eco-friendly products. Keeping in mind consumer sentiment, the retail industry needs to take conscious steps towards sustainability in every aspect of the business. It could mean using energy efficient equipment, switching to sustainable packaging alternatives, partnering with suppliers who are committed to sustainability, and so on.
According to McKinsey, half of the US frontline retail workforce are considering leaving their jobs. Their reasons include lack of flexibility, uncompetitive compensation, inadequate growth opportunities, among others. Retailers need to provide motivation in order to avoid burnout in their employees. Investing in advanced technologies that will free up employees’ time can make their jobs more attractive while also providing learning opportunities. Simplification and the removal of monotonous tasks can help improve productivity and lower the attrition rate. A dedicated fulfillment app puts powerful and efficient order fulfillment capabilities right in the palm of your store associates’ hands. In addition to turning your stores into hyperlocal fulfillment centers, it empowers your in-store team to process orders better and faster while creating a simpler, more efficient experience for stores and warehouses.
On the verge of a downturn with recession headwinds, there is still opportunity in this changing market for retailers to gain market share by being the first movers in the industry. Stakeholders in the retail industry have provided a clear indication for the need of accelerated omnichannel transformation in order to offer a complementary and seamless shopping experience for consumers. In order to lead the way in 2023, retailers need to remember that consumers are in the driver’s seat of their shopping experiences and the right way to shop is whatever, wherever, and however the customer prefers.