Innovation drives consumer markets and purchasing habits. When Amazon moved away from books and began to embrace other household items, shoppers found a new alternative to big-box retailers that weren’t available before. Unsurprisingly, e-commerce took off at a run and hasn’t slowed down since. If anything, that pace has only quickened due to the global pandemic as more and more consumers turned to online shopping to purchase goods during the lockdowns.
While this is great for companies like Amazon and Alibaba, which thrive in their digital presence, companies that have failed to adapt have failed spectacularly, many of which have closed their doors for good. Given that there is such a distinct division between companies that have embraced innovation and those that haven’t, the remaining traditional brick-and-mortar retailers are faced with a very clear decision, evolve or succumb.
The path has already been laid out, it is just a matter of paving that path for their customer base to follow.
Fortunately, retailers won’t have to reinvent the wheel. The path has already been laid out, it is just a matter of paving that path for their customer base to follow. Omnichannel marketing is the marriage between brick-and-mortar and e-commerce retail strategies. Tailoring an omnichannel experience for their customers—while not necessarily easy—could be the defining factor between continued success or fading into obsolescence.
Why Retailers Need a Holistic Strategy
“Total e-commerce sales for 2020 were estimated at $791.7 billion, an increase of 32.4% (±1.8%) from 2019. Total retail sales in 2020 increased 3.4% (±0.4%) from 2019. E-commerce sales in 2020 accounted for 14% of total sales. E-commerce sales in 2019 accounted for 11% of total sales,” according to data taken from the U.S. Census Bureau.
Of course, there is the question of, “Why bother?” If e-commerce has been growing so quickly, why not cut out the overhead and just go fully digital? That is a fair question. It’s all about customer expectations and demand. Clothing is a perfect example. Yes, you can order clothes online, but it’s typically a better experience when you’re able to physically shop for clothes as it means you can try them on and see what fits before making a purchase. This means the customer will have a more positive experience overall and be more inclined to make purchases in the future. A purely digital format lacks the ability and even with award-winning customer service and an impossibly easy return process won’t necessarily make up for it.
There’s also the need for instant gratification. Some shoppers aren’t content to wait for their purchases to arrive, especially when considering the state of the parcel logistics network in the United States, where delivery dates are becoming increasingly sporadic. Some shoppers are willing to pay a degree more for their purchase just to be able to walk out of the store with it today rather than waiting for it to ship.
Offsetting Costs Is The Key To Omnichannel Success
E-commerce has its own set of costs which can be painful for smaller operations. Fulfillment, packaging, and distribution are just some of what retailers will need to contend with when building a strong omnichannel marketing solution. Depending on what’s being sold, there is also the need to consider reverse logistics, and how to process return and damage claims. In the case of Amazon, the company churns out so much profit in a given year, that it’s easier in most cases to just send out a new product rather than processing a return. Smaller companies just don’t have the extra capital lying around to soak the product loss.
Smaller companies need to be smarter about how they conduct their operations.
Smaller companies need to be smarter about how they conduct their operations. In order to build a successful and more importantly, sustainable omnichannel strategy, companies will need to evaluate and optimize their supply chain. Shipping costs in particular can be ruinous if not carefully managed plus minimizing delivery times will also drive customer success, which is every businesses goal.