If there is one truth about today’s retail environment everyone can agree to it’s that the traditional way of commerce is obsolete. Consumers are re-wired with high expectations that blur channel distinctions, merge touch points into a continuous interaction and redefine the shopping process by demanding more options at every step. Consumers are no longer willing to be “sold to;” instead, they trust social networks, Web sites and other influencers when making buying decisions.
The challenges this creates for retailers is compounded by the astounding pace at which this transition has occurred. A recent consumer survey by Sterling Commerce, an IBM Company, revisited several questions from a 2007 questionnaire of consumer expectations surrounding the cross-channel shopping experience, and the results showed consumers’ expectations have increased in all areas of the order lifecycle:
- 87 percent expect to track an order from any channel (up from 56 percent).
- 74 percent expect to modify an order from any channel (up from 65 percent).
- 61 percent expect to complete an order from any channel (up from 55 percent).
Additionally, the survey found that expectations for a seamless cross-channel experience demonstrate consumers’ desire for retailers to simplify the shopping experience. For example, more than 60 percent believe that being able to use their mobile phone while shopping mobile devices to verify product availability at a particular store location is important or very important. The survey also found:
- 53 percent of respondents consider it important or very important for a retailer to be able to maintain a cross-channel order history of a customer’s purchases.
- 83 percent of consumers believe in-store return of an online purchase is important” or “very important.”
A comparison of these consumer cross-channel expectations with a recent Sterling Commerce survey of over 200 IT decision makers within the retail industries reveals that retailers are unprepared to meet growing consumer expectations. Highlighting the growing gap between consumer expectations and retailer preparedness, the survey found:
- Only 42 percent of retailers have the capability to check store in-stock availability via mobile phones.
- Only one in ten retailers feel they currently excel at cross-channel integration.
- Less than half (46 percent) of retailers offer the capability to track an order from any channel.
- Six out of ten retailers claim they cannot yet provide cross-channel order history.
- 43 percent of retailers don’t allow in-store returns of online purchases.
As another example, 54 percent of retailers don’t offer the option to order online and pick-up in store, and 29 percent of those retailers do not plan on offering an option like this. Yet, the consumer survey showed this is a major priority for consumers, with 91 percent surveyed saying they would take advantage of this option if it were available.
For retailers to meet the rapidly changing expectations of today’s consumer, they must start to engage with consumers across the full lifecycle of the shopping experience, placing the consumer at the center and connecting with them where and how they prefer to buy. In essence, retailers must engage in Smarter Commerce, orchestrating a unified experience integrating the complete lifecycle – from marketing and sales to order processing and fulfillment. Retailers must focus on insight, strategy and engagement to create a smarter shopping experience that addresses consumer expectations, like locating out-of-stock items and being able to have it shipped, held for pick up, or transferred to the customer’s “home” store – something 59 percent of consumers expect but only 50 percent of retailers offer.
Retailers need deep insight into customer behavior and needs, as well as the ability to anticipate and predict and take immediate action. This insight, in turn, helps retailers develop and continue to refine their customer value strategy, enhancing, extending and redefining value as viewed by the customer. To address the disparity between what retailers are currently prepared to deliver and what consumers expect, it’s important for retailers to listen, and critical for them to respond with initiatives that synergize the entire lifecycle of the customer experience – not just the buy component, but the market, sell and service components too.
Jim Bengier is a seasoned retail supply chain executive, with over 25 years of experience within the apparel, footwear, and electronics categories. He has spoken at Retail Executive Summits and participated in National Retail Federation (NRF) round table sessions. He also is a member of the Council of Supply Chain Management Professionals (CSCMP), NRF International Trade Advisory Committee Policy Council and Strategic Supply Chain Council, and the Supply Chain and Logistics Forum. As global retail executive for Sterling Commerce, an IBM Company, Jim is helping clients solve complex challenges, bridging the gap between consumer expectations and retailer preparedness.