Retailers looking to their direct competitors for inspiration on delivering on expectations are falling behind—they must examine the experiences delivered across all industries if they have any shot of winning the hearts and minds of the consumer. Almost 80 percent of customers report having abandoned a purchase or switched merchants after a poor experience, according to the Forrester and Bloomreach State of Commerce Experience report.
When researching or purchasing online, 72 percent of customers still report facing challenges such as out of stocks, difficulty finding answers to questions, inaccurate search results and inflexible delivery options, the report said.
“Each time a consumer is exposed to an improved digital experience, their expectations for all experiences are reset to a new higher level,” said Brendan Witcher, vice president and principal analyst at Forrester Research in a keynote at Aptos Engage Digital.
“A consumer will look at, let’s say, a banking website or an insurance website or a sporting goods website, but you’re in fashion. That doesn’t matter,” he added. “It’s the things that happen elsewhere. Consumers don’t think about verticals or industries, they think about experiences. I may have an experience at a sporting goods store that I’ll bring to a fashion retailer and say, ‘Why aren’t you doing this?’”
There is still a gap in the thought process of delivering an efficient omnichannel experience, as it appears retailers have the vision but haven’t applied the grunt work necessary to put intent into action. While as many as 92 percent of retailers and brands say their C-suite is aligned with their omnichannel strategy, only 52 percent claim they have the right processes and technologies in place, according to Forrester’s Q1 2020 Omnichannel Panel Survey.
In the keynote, Witcher pointed out that retailers still fail to deliver on omnichannel experiences because stores aren’t designed to be warehouses or distribution centers, and because certain technologies still present challenges to setting up a system, particularly within inventory.
Citing the Omnichannel Panel Survey, Witcher noted that 48 percent of retailers and brands said it was very challenging to set up inventory planning systems to manage cross-channel demand signals and optimize in-store inventory levels, with another 25 percent saying it was somewhat challenging.
Additionally, 35 percent of respondents described knowing how to optimize and properly manage safety stock levels as very challenging, while 31 percent called it somewhat challenging.
On top of understanding inventory, retailers must take into account that store staff are pivotal in ensuring omnichannel operations go smoothly. This poses challenges as well, with 64 percent of respondents saying it is very or somewhat challenging to drive the cultural change for in-store staff to fully support omnichannel capabilities. Another 64 percent admit it is very or somewhat challenging to manage store staff incentives and goals to align with supporting omnichannel orders, such as giving stores credit for online orders.
“Many companies are already incentivizing store associates with support and credit for orders no matter where they happen,” Witcher said. “This really makes a difference because a store associate may want to know ‘Hey, I’m helping out. Why am I not a part of this program?’ It’s really important to include them early so that they’re on board and they believe this is really in the customer’s best interest.”
In-store logistics processes also cause concern, Witcher said. Retailers are still getting used to implementing processes to efficiently accept, pick and pack online orders, and sometimes may be confused as to how to handle returns for items ordered online that are not available at the store.
To deliver a solid omnichannel experience, retailers are also going to have to know how to measure success in order to take the right action. For example, as many as 41 percent of retailers don’t measure in-store add-on sales during BOPIS transactions or ship-to-store order pickups, while 35 percent couldn’t identify the repeat customer rate of those that use BOPIS more than once. Another 24 percent don’t even measure the total cost to pick and pack an order, including labor and materials.
“These are the kinds of things you need to be looking at, understanding and saying, ‘Do we really know what’s going on with our business?’” Witcher said. “If you don’t, you can’t change. You can’t fix. You can’t go in and make sure that your organization is doing things in a way that creates the best profitability at the bottom line.”
The top customer interaction elements of a “good” omnichannel experience come down to a few key best practices, Witcher said. Retailers must deliver on customer service-level agreements, such as the time between when customers place an order and when they receive a pickup notification. On top of that, creating a new website experience will make omnichannel options easy to use. Retailers also must galvanize marketing and advertising support for omnichannel fulfillment services, while customer service and support teams require training about these services and how they work.
Although omnichannel sales have become a major imperative throughout the pandemic, especially as most fashion retailers had stores closed for months at a time, the Forrester/Bloomreach study points out that investment in stores has been cut in half since the pandemic, with only 24 percent of retail and wholesale decision makers planning to increase budgets for them.
But while store investment may decrease, mobile investments will be on the rise. While 45 percent of the respondents sought to increase their mobile app budgets pre-COVID, that number has since jumped to 58 percent since the pandemic hit, underscoring the importance of bolstering resilient digital channels.
In total, retailers and wholesalers anticipate spending the most on digital and e-commerce customer experience technologies due to COVID-19, with 64 percent looking to augment their investments in content, personalization and search—all capabilities designed to enhance the overall shopping experience.