John Pincott, Managing Director, EMEA
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Exceeding the expectations of the digitally demanding consumer

26th May 2016
John Pincott, Managing Director, EMEA
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Today’s retail landscape is evolving like never before, with new technologies impacting the way in which customers not only choose, but expect to shop. Consumers today are digitally savvy, and the pervasiveness of cloud-based technologies and mobile devices means they expect to find products when and where they want and receive them in a way that is most convenient; because they can.

While retailers have traditionally used consumer fickleness and a desire for the lowest price as an excuse for a fall in business or lack of return in sales, research suggests that in fact, digital and omnichannel services have a huge role to play when it comes to customer loyalty. According to Kibo’s Digitally Demanding Consumer report, which surveyed more than 3,000 consumers across the United States and the United Kingdom, 95 percent prefer some form of omnichannel service when shopping. Eighty percent of consumers prefer to buy online and ship-to-home, while 67 percent research products online before visiting a store.

One of the most startling trends however, is the erosion of consumer loyalty. Over half of consumers (60 percent) would purchase elsewhere if their preferred method of delivery wasn’t available, even from a retailer that they felt loyal to. Moreover, two-thirds say they are less likely to buy from retailers unable to confirm product availability online, while another third would leave retailers unable to offer click-and-collect.

With plenty of choice over product and channel, today’s digitally demanding consumers have less of an attachment to specific brands.  Mid-sized retailers should take note, particularly if they wish to compete with online giants such as Amazon. The stakes have been raised and consumers have no problem shifting their loyalties to another retailer that can serve them better. Millennials are especially willing to jump ship, as they are almost twice as likely as older generations to be more loyal to a brand or retailer which enables them to purchase items online and pick-up locally in-store.

Effective fulfilment
The fact that 60 percent of shoppers would switch retailers if their delivery option wasn’t available is testament to rising expectations. In fact, a quarter of Brits not only prefer, but expect click-and-collect next day as standard. What’s more, one-third prefer to use same-day delivery yet they don’t expect to pay for it, calling into question its sustainability as a business model.

Fast, free shipping is so important that consumers are prepared to purchase more so as to not have to pay for it. For example, one in seven UK shoppers admitted they have bought extra items to ensure they qualify for free shipping, but have then returned them.

Strategies to cater to the digitally demanding consumer
To effectively compete in today’s rapidly evolving retail landscape, it is critical that retailers cater to the demands of the digitally demanding consumer. Shoppers are less bothered about where the product ships from, whether that is a warehouse across the country or a retail store close by, provided it arrives quickly. In response, the innovative and competitive retailers are those that are adapting accordingly with a mix of the below strategies:

Ship from store: If the fulfilment location is far from the customer, then shipping times will inevitably be delayed. More often than not, brands use distribution centres (DC) to fulfil online orders yet store locations are in fact 47 percent closer to customers than warehouses. By using store locators rather than warehouses as fulfillment centres, retailers can decrease delivery times, reduce shipping costs and ultimately, improve the customer experience.

In-Store pickup: Customers are continually proving their preference for in-store pickup, with one-in-three brits indicating they would abandon a retailer unable to offer it. For retailers this is great news, as this eliminates high shipping costs altogether. Not only is it convenient for consumers as they receive their products on the same day they placed their order, but for retailers this drives footfall into their stores.

Mobile- and tablet-based point-of-sale systems (MPoS): MPoS is an effective tool for digital engagement while consumers are instore. Providing sales associates with mobile devices for accepting payment creates a more frictionless purchase path, while empowering associates to establish a more personal and engaging in-store experience. Apple was among the first to let customers pay in the aisle, eliminating the need for long queues and paper receipts.

While the benefits of offering digital services are undeniable, doing so may seem a challenge for some retailers. One of the key inhibitors is not having the technology systems in place so as to profitably manage these new digital services and fulfilment options. Auditing your current systems and processes is essential, and from there, brands can identify areas where improvements can be made. Once problems have been identified, then it is a matter of streamlining and deploying the right technology for the business.

For retailers just beginning their omnichannel journey, inventory look-up is a good place to start. This allows your customers to see real-time inventory while shopping online before locating where a product is available at a store most convenient to them. Getting up and running with inventory lookup requires very little staff training and is fairly simple. After that, retailers can look at addressing the other key, yet simple, components such as ship-from store and click-and-collect.

The secret is that with a clear process and a flexible, modern technology solution, any retailer can exceed the expectations of the digitally demanding consumer. As the lines between online and offline retailing are not only blurring, but disappearing altogether, it becomes ever more critical for retailers to use agile, enterprise-class order management systems in order to deliver a seamless and efficient shopping experience. Doing so, will not only improve the customer experience but will give retailers the confidence that their digitally savvy shoppers will remain loyal, as they have no reason to look elsewhere.

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