Consumers are driving some of the biggest changes to e-commerce in decades. When it comes to choosing retailers, consumers are prioritizing convenience and a seamless shopping experience. If retailers want to remain competitive, they need to deliver Total Commerce - that's the concept of being present wherever your customers want to shop. Retailers need to be present in multiple shopping environments, like marketplaces and social channels, and reconfigure their business operations to deliver a frictionless, convenient shopping experience across all touchpoints.
A recent study asked retailers where they are in this e-commerce transformation and what they have prioritized in their business transformation strategy. The research found that online retailers are embracing e-commerce, seeking more control over their supply chain processes and paying attention to consumers' interest in sustainability. Here are three key takeaways your business needs to succeed in the new age of commerce:
E-COMMERCE IS NOT AN OPTION
Unsurprisingly, a global pandemic and series of supply chain disasters impacted how consumers shopped the past two years. While things were already trending towards an increase in online shopping pre-pandemic, there were still plenty of retailers who managed without an online presence. When in-person shopping was no longer an option, having an online presence was no longer a nice-to-have, it was a necessity. Retailers were quick to catch on, according to a survey by Linnworks.
The retailers who succeed in this area are those that can translate the convenience of shopping in-store to an online environment. Consumers expect retailers to be accessible wherever and however they want to shop: websites, online marketplaces, social channels, etc. Wherever consumers are spending their time, they expect effortless shopping experiences in these channels. Since the onset of the pandemic, 52% of retailers reported adopting an online marketplace and 49% said they adopted a social media storefront/marketplace, according to Linnworks research. Yet only 14% were managing these channels from a single platform. To be competitive, it’s essential for retailers to transform their operations to be able to sell in multiple channels while delivering a seamless, convenient shopping experience across all touchpoints – which may require a reconfiguration of their business operations.
This also meant shifting their physical storefronts/retail space to serve as e-commerce fulfillment and distribution facilities during the pandemic; 83% of retailers report having done this and for many, this was a permanent change, according to Linnworks research. Nearly half of retailers report using their physical sites as showrooms, with most space serving as a fulfillment warehouse for e-commerce purchases. This strategy enables customers to continue shopping online while offering them the convenience of picking up in-store, or getting to view the product before they buy. Being able to track inventory across multiple channels and locations will be critical for success in 2022.
WHEN IT COMES TO THE SUPPLY CHAIN, THE MORE CONTROL THE BETTER
The fact is supply chain issues aren’t going anywhere. In 2021, nearly all retailers found themselves at the mercy of Mother Nature and a handful of ports waiting for their goods to arrive. According to Linnworks’ latest survey, 88% of respondents said supply chain issues negatively impacted their customer service and 76% have lost sales and revenue. This led to a handful of retailers shifting to managing these processes completely in-house or outsourcing to a third party logistics provider.
While there may be little retailers can do to directly address some of the global supply chain issues, much of the work involved in delivering Total Commerce focuses on optimizing the performance of key processes that impact a retailer’s ability to create an optimal customer experience. Controlling as much of their supply chain as possible –from product discovery right through to the product landing on the shopper’s doorstep and the return process – will be key in managing customer experience moving forward.
To facilitate, many retailers have transformed their back-end processes and logistics to be able to deliver on these expectations while keeping control of their business operations. Examples of this include consolidating and automating their inventory/warehouse management, chartering their own delivery transportation, and partnering with local last-mile delivery services.
Getting your shipping and fulfillment solution right is imperative, not only to drive business efficiencies in inventory management and stock holdings, but also to maintain and grow your brand through delivering great customer experiences via reliable delivery and fulfillment operations. The change may be a bumpy ride, but having a centralized platform with a single view into the business can be key to maintaining smooth operations.
Debatably, the most challenging aspect of this new age of commerce for retailers will be shifting business practices towards sustainability. Retailers’ role in climate change has been an issue that’s gained attention with 89% reporting to have seen a dramatic increase in consumers' interest in corporate sustainability practices, according to Linnworks research. Less than half of retailers report currently running sustainable operations. However, it is in the plans: 53% say they plan to make changes towards sustainability in the next one to five years. Those who already run sustainable operations say they prioritized ethically sourced product ingredients/materials, working with sustainability-focused vendors/partners/suppliers, or increasing the share of electric vehicles in the supply chain. Consumer behavior, in combination with global disasters, drove rapid changes in e-commerce adoption and supply chain processes. The industry will be watching closely to see if that kind of consumer pressure is capable of causing major changes to corporate sustainability practices on a large scale over the next few years.
Jason Stuckey is the United States General Manager of Linnworks, a leading commerce automation platform for the world’s major brands and retailers to manage their omnichannel inventory, orders and fulfillment from a single dashboard, while providing deep insights across operations. Jason is responsible for the strategic direction, management, and planning for Linnworks e-commerce software. He works each and every day to help brands stay on top of a multichannel e-commerce world.