Many consumers are returning to pre-pandemic shopping habits, including in-store purchasing. Facing stalled revenue, some online sellers are looking to open physical stores or partner with brick-and-mortar brands. But those brands, having experienced the revenue boost and cost savings of ecommerce, are looking to bolster their online presence. Many are closing stores and reducing staff.
In 2023 and beyond, the key to merchant success is a robust omnichannel strategy.
Brick-and mortar Struggles
Some physical retailers have lost sales to ecommerce. One example is Bed Bath & Beyond, which just filed for Chapter 11 bankruptcy. In the past 18 months, the company suffered from empty store shelves and poor financial and merchandising decisions.
According to several analysts, Bed Bath & Beyond’s demise is mostly attributable to its slow adoption of ecommerce, even during the pandemic. Customers migrated to merchants with a better online shopping experience — more products, lower prices, faster shipping — such as Amazon, HomeGoods, Target, Walmart, and Wayfair.
Bed Bath & Beyond will soon close all its stores and 120 Buy Buy Baby shops.
Conversely, Best Buy has prioritized ecommerce. It has started eliminating hundreds of store jobs across the U.S. as it embarks on a cost-cutting effort that includes shifting its business online, according to a Wall Street Journal article earlier this month. Store workers specializing in selling complex products such as computers and smartphones are the focus of the current layoffs.
A Best Buy spokesperson stated, “… we’re evolving our stores and the experiences we offer to better reflect the changes in customer shopping behavior, as well as how we organize our teams.”
In 2012, the company had 1,056 U.S. stores. In January 2023, it had 925. Closures include 70 large-format facilities. Best Buy had more than 90,000 workers in the U.S. and Canada in January, down from nearly 125,000 in early 2020. The company expects overall sales to decline this year compared to 2022.
Consumer Preferences
“The State of OmniChannel Retail” is a September 2022 report from Bazaarvoice, the shopper engagement platform, addressing the results of a global survey of 6,000 consumers and 400 retail executives. Most retailer respondents in Australia, Canada, and the U.S. said they offer a successful omnichannel experience. Retailers in France and the U.K. said they had not mastered the right balance.
Successful merchants stated that customer feedback is critical in designing a good omnichannel experience. They also acknowledge that implementing omnichannel is expensive but a necessity.
Sixty-six percent of consumer respondents prefer a hybrid online and in-store shopping experience. Twenty-five percent prefer in-store only, while 8% shop online only. Germans are the most enthusiastic about hybrid shopping at 75% of responses. Americans had the lowest preference for it at 61%.
Globally, by product category, electronics had the highest percentage of online-only preference at 42%. In contrast, the food and beverage category has the lowest preference for both online-only and hybrid, with 73% wanting to shop in-store.
Incentives for shopping online are access to home delivery (60%) and the ability to conduct direct product searches (58%).
Research is important to omnichannel consumers. The report states that “brands need to understand the ROBO (research online, buy offline) economy” to thrive.
- 41% of shoppers research products online but purchase in-store.
- 63% use their phones in-store to research and check for competitive pricing.
- 48% of in-store shoppers research online before going to stores.
- 74% of online buyers research a product before buying.
- 76% of online buyers purchase from retailers, not directly from brands.
In short, consumers want to shop both in-store and online. Merchants who ignore this preference face headwinds or worse.
via https://www.aiupnow.com
Marcia Kaplan, Khareem Sudlow
