While consumers still make plenty of online purchases, analysts expect ecommerce sales to grow more moderately in the near term compared to the past few years. Meanwhile, consumers return to brick-and-mortar stores and seek omnichannel experiences. Click-and-collect sales from BOPIS and curbside pickup are projected to exceed $100 billion this year.
Retailers increasingly strike balances between direct-to-consumer ecommerce and omnichannel strategies to keep products in stores and in front of consumers. They invest in new storefronts and build strong wholesale relationships.
But there are greater opportunities for leading retailers to integrate their omnichannel experiences and create seamless ecommerce and in-store experiences.
Great Omnichannel Experiences Win Customers
Consumers expect great omnichannel experiences — from fast shipping to buy online, pick up in-store (BOPIS):
- 83% of consumers search elsewhere if they can’t find fast shipping options.
- 92% of consumers shop elsewhere to save on shipping, leading to cart abandonment. BOPIS removes shipping fees.
- 59% of consumers expect BOPIS as a shopping option.
Leading retailers recognize ecommerce and in-store retail are not rival strategies. In fact, BOPIS strengthens omnichannel offerings:
- Generates instant gratification and increased customer lifetime value. 88% of retailers agree in-store shopping delivers instant gratification, and 79% confirm in-person shopping increases customer lifetime value.
- Boosts ecommerce orders and in-store purchases. Shoppers spend more when they use BOPIS: 85% of shoppers make additional unplanned in-store purchases when picking up online orders.
- Reduces peak shipping cutoff constraints. Retailers leverage BOPIS strategies to avoid peak shipping cutoffs and delivery delays.
- Creates fast feedback loops and happier customers. A strong direct-to-consumer channel creates a fast feedback loop for emerging brands. Insights are then applied to both online and in-store experiences.
But challenges remain for omnichannel retailers ahead of peak season. Retailers may not have the optimal distribution networks, store designs, labor pools or technology solutions ready to tackle holiday demand spikes. Traditional fixed networks aren’t designed to expand rapidly to meet customer expectations. No matter what channel consumers choose to shop this holiday season, retailers need to ensure a seamless shopping experience — and that goods hit shelves or go out for delivery fast.
Embrace a New Approach to Peak
Consumers obviously increase spending during peak, yet traditional supply chains remain static and prone to disruption. They rely on fixed infrastructure, existing technologies and constrained labor pools.
Retailers have options. They can mitigate supply chain risks — and meet customer demand — by taking a different approach to warehouse logistics.
Separate logistics from locations: Warehousing and distribution locations constrain traditional supply chains. Organizations purchase solutions through building or leasing physical spaces. Traditional solutions take years to build and are designed for predictability. But predictability is in short supply.
There’s a different approach: Use networks and technology to separate logistics from locations. Retailers can implement logistics programs and place the right inventory in the right place, at the right time — without the constraints of existing fixed warehouse locations. As a result, they create networks that expand or contract — fast.
Solve peak challenges: Leading retailers prioritize networks and technology over fixed assets and leases to solve peak season challenges:
- Increase speed. Select and launch additional storage capacity, retail or wholesale distribution or ecommerce fulfillment in weeks instead of months. Improve inventory placement and throughput with a unified technology platform.
- Reduce cost. Take advantage of transactional costs and add space only when it’s needed. No wasted expense or unused capacity.
- Create scale. Create space close to suppliers, manufacturing facilities, ports and — most importantly — customers. Scale seamlessly to solve problems anywhere. Flexible networks reduce transportation costs, improve delivery speeds and lower holding costs.
The result: a flexible supply chain infrastructure.
Flexibility Wins Peak
Retailers can beat peak challenges and provide excellent omnichannel shopping experiences. Don’t make big, costly bets on fixed assets. Instead, take a program-based approach: quickly and transactionally expand flexible supply chain infrastructure to meet peak demand. Then outpace the competition to win customers and drive sales.
Jordan Lawrence is Flexe’s Director of Logistics Strategy. He brings 14 years of deep industry expertise, spanning manufacturing, distribution, transportation and logistics technology. Previously, Lawrence was Director of Strategic Accounts, and prior to Flexe, he worked in various consulting roles. Lawrence has a Bachelor of Arts in Marketing and Business from East Carolina University.