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Mastering Omnichannel Buying Journeys With Predictive Analytics

0aaaSean Kendall TetraVXTo compete with Amazon, Walmart has invested heavily in automation. Just recently, the company recruited a fleet of autonomous floor scrubbers and more than doubled the number of conveyor belts in its shipping processes.

But automating operations is unlikely to give Walmart stores a significant leg up on Amazon. Although increasing efficiency and reducing costs have a place in retail, those strategies do little to encourage customer engagement and loyalty.

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Omnichannel Returns Are No Longer Optional

0aaaRob Zomok InmarAs online sellers find themselves deluged with returns, it’s understandable that, because of the resultant logistics burden, the prevailing perception of the situation would trend toward the negative. The truth, however, is that returns are neither a necessary evil nor indication of customer dissatisfaction.

They are a critical element of a new online sales cycle that is seeing shoppers employing a “buy and try” approach to acquiring the products they want and expecting sellers to fully enable their behavior. And while there’s no changing shoppers, what sellers can do — now — is shape their supply chain to optimize the customer experience and maximize buyer satisfaction.

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Retailers: Here’s Why It’s Time To Be ‘All In’ For Omnichannel Inventory

Chris Shaw ManhattanFor retailers, the pressure to provide an omnichannel shopping experience is inescapable. Many companies have gone to great lengths to adapt systems and processes to meet omnichannel demand and deliver a high-quality shopping experienceacross channels. While only four or five years ago cross-channel retail was considered innovative, today it is table stakes — no longer a “nice to have,” but a “must have” for retailers to remain competitive. And as consumers’ expectations for shopping continue to evolve, the importance of successful omnichannel adoption — and the urgency with which that adoption must take place — is heightened.

Most retailers have invested in omnichannel in some capacity, but many brands have taken a piecemeal approach, with targeted investments or platform upgrades to enable specific functionalities. However, the retail industry is nearing an inflection point: brands that don’t go “all-in” on omnichannel will see a negative effect on sales, and those that fully adapt their systems and processes to the new omnichannel way of doing business will be much more likely to retain and grow market share.

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Mass Merchandisers Poised To Thrive During The Final Stretch Of Back-To-School

Prime Day and e-Commerce may have defined the start of the back-to-school (BTS) season, but brick-and-mortar retailers — particularly omnichannel mass merchandisers — are poised to grab their fair share as the start of school approaches. Parents are expected to spend $14.5 billion in the weeks following Aug. 1, according to data from Deloitte; that’s more than half of the $27.8 billion in spending predicted for the entire season.

Shoppers plan to spend approximately 56% of their total BTS budgets in-store, a total of $15.7 billion across the entire season, according to a survey by Deloitte. In comparison, 29% of the average budget will be spent online, accounting for $8.1 billion. The remaining $4 billion is undecided and will be split between both channels, with online expected to hold an edge.

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ICSC Study: ‘Halo Effect’ Shows Physical Stores Boost Online Sales…And Vice Versa

A single online or in-store transaction is rarely an isolated occurrence. Usually, it stems from, and leads to, a series of transactions, emphasizing the role of the “halo effect” — how a purchase in one channel directly impacts the purchases in another. Retailers must take this halo effect seriously when planning future stores or even reducing store counts, according to a survey from the International Council of Shopping Centers (ICSC). The study, titled The Halo Effect II: Quantifying the Impact of Omnichannel, revealed:

  • Shoppers that spend $100 in store and then buy online at the same retailer within a 15-day period average a net spend of $267; and
  • Shoppers that spend $100 online and then buy in-store at the same retailer within a 15-day period average a net spend of $231.

ICSC analyzed more than $31 billion in consumer spending with consumer insights firm 1010data during 2016, 2017 and 2018 at retailers across several categories, including apparel, beauty, discount and traditional department stores, home goods and emerging digital native retailers.

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Study: 33% Of In-Store Purchases Start Online — And 25% Of Online Purchases Start In-Store

It shouldn’t surprise anyone that online activity influences consumers’ brick-and-mortar purchases, but the traffic isn’t all one-way. While one in three in-store purchases start online, one in four online purchases start in-store, according to the Month in the Life of a Shopper 2019 report from The Hershey Company. Additionally, the average shopper makes a combined 60 online and offline trips per month across 17 retailers — so capturing a larger share of these trips means maximizing the value proposition in both channels.

“First and foremost, it's important to evaluate how you're performing across the core tenets of what we've defined as the shopper value equation: spend, time and experience,” said Tony Mardegain, Director, Retail Snacking Experience Team (ReSET) at Hershey in an interview with Retail TouchPoints. “What is your unique place in shoppers' lives? What are the areas where you're already doing well? Can you lean in further?”

ReSET advises against a one-size-fits all approach, but the start of every retailer’s journey is recognizing that overall, 87% of all purchases start online — an environment where shoppers will quickly abandon a retailer if they can’t find what they’re looking for.

“Navigation helps consumers browse the digital and physical shelf,” said Mardegain. “Category management fundamentals like aisle flow, usage occasion and brand placement are applicable both online and in-store. Transposing aisle flow and shelf organization from the physical world to digital environments is key to creating a seamless experience.”

Make Shopping Seamless, Or Customers Will Move On

The similarities between e-Commerce and brick-and-mortar still hold for impulse purchases made without research beforehand. Shoppers see the retailer they are purchasing from, not the individual channels they are using, even when their journey doesn’t involve multiple touch points. Companies need to keep their teams connected to ensure a consistent pay point experience across the entire business.

“Shoppers aren't going to pick up their favorite snack at the end of a shopping trip, be it online or off, if what they are looking for isn't there,” said Mardegain.

The need for a seamless environment continues after the time of purchase as well. Retailers should encourage reviews by making the process quick and simple, regardless of where the purchase was made. User-generated content is an important part of the overall decision-making process in both channels:

  • 56% of shoppers read reviews before making an online purchase; and
  • 46% of shoppers read reviews before making an in-store purchase.

Making it easy for shoppers to write, read and share reviews helps improve engagement for returning customers, and encourages newcomers to check out retailers they haven’t used before. Conversion rates are nearly 30% higher when sites contain user-generated content.

In-Store Displays Benefit From Online Practices

One area that is particularly important in-store but still involves e-Commerce is presenting memorable displays. They must be designed with the shopper at the center, combining categories to create a coherent and memorable experience rather than focusing on promoting certain goods.

“We draw a lot of inspiration from our owned Hershey's Chocolate World retail locations, and they have seen success building displays around occasions, like ‘hot cocoa sipping’ in the winter,” said Mardegain. “There are food items on the display, but there are also fuzzy socks, blankets, fun stirrers and more. In this case, you are building a full experience for the shopper and inspiring them to have fun and build connection with their families.”

This is an area where brick-and-mortar retailers have room for improvement: only 24% of shoppers rated their usual stores highly on the metric of “retailer I look forward to shopping at.” Mardegain suggested that these retailers take a cue from their e-Commerce counterparts, and build out displays based on recommendations that go along with the centerpiece product.

Retailers also can benefit from increased collaboration with manufacturers. The combination of insights derived from retail loyalty programs and manufacturer marketing data can help retailers set up their stores and web sites in a way that maximizes their impact.

“Unlocking growth in this competitive marketplace is going to take next-level collaboration, including insights and data sharing,” said Mardegain. “We’re investing in deeper snacking insights to position our retail partners for success. Understanding how and why consumers snack is shaping our innovations in products, packaging, services and shopper experiences.”

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Study: 66% Of Retailers Say Inaccurate Inventory Data Creates BOPIS Inconsistency

Retailers are well aware that an omnichannel approach to both the customer experience and their internal systems is now a basic business requirement: 94% of retailers already have, or plan to implement, a single unified commerce platform within three years, up from 81% in 2017, according to the 2019 POS/Customer Engagement Study from BRP.

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Balance Convenience And Experience To Create The Ultimate Holiday Destination

Despite the growing dominance of mobile, shoppers still enjoy shopping in-store. What’s changed, however, is their expectations around the brick-and-mortar experience, according to a pair of studies by GPShopper. Some shoppers highly prize stores’ convenience — the ability to quickly find an item, pay for it and go. Others respond to experiential retail; they are more willing to linger and browse until they find what they want. Retailers can adjust their stores’ layout, staffing and services to address both ends of this spectrum.

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Getting Physical: Three Tips For Bridging Online And Offline Experiences In The New Year

0aaaCarl Tsukuhara OptimizelyRecently Wayfair and Casper joined the likes of fellow e-Commerce brands Amazon, Everlane, Glossier and many others that are all experimenting with, or opening permanent, brick-and-mortar stores. However, with many traditional retail stores closing shop in the last year, it's even more imperative to integrate offline and online channels to provide a consistent experience across all touch points.

These digitally-born businesses are in a battle with Amazon to retain customers by offering a great in-store experience at a reasonable cost, all while avoiding the mishaps Build-a-Bear and others recently encountered. In fact, while 87% of consumers say they expect an omnichannel experience, only 7% of retailers actually provide the ability to shop seamlessly across all channels.

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