2019 attracted a whirlwind of change for retail as a result of rapid e-commerce innovation. E-commerce earnings are set to reach almost $26.1 trillion at the end of 2020, and consumers are becoming more unpredictable in their ever-changing customer expectations. We saw long-standing brands like Payless and Barneys document for bankruptcy and newcomers reach unicorn status with billion-dollar valuations.
Here are five trends we’re watching out for.
Finding A Balance In Speed, Price And Experience With Smart Orchestration
Last year, Amazon and Walmart raced into the bottom with one-day delivery while many retailers struggled to balance delivery rate, transport costs and client expectations. This season, FedEx and UPS announced they’d slap additional surcharges on bulky parcels, forcing retailers to rethink transport strategies to acquire larger items to customers.
In 2020, manufacturers will utilize their logistics networks and supply facilities to their benefit, connecting infrastructure to efficiently combine loads. Others might opt for clever orchestration–utilizing automation to upgrade or downgrade carrier service levels, keeping customer delivery promises.
One-Day Delivery Will Overrule Sustainability
Since e-commerce grows and clients need things quicker, it is now hard for retailers to combine packaging and transport. According to a 2019 survey we conducted over 2,500 American customers, the demand for fast delivery climbed more than any other factor since 2018. To make things worse for the environment, we discovered that 95.6percent of shoppers were not willing to trade speed for package consolidation.
While retailers like Amazon can afford to invest in carbon-neutral emissions vehicles to offset speedy shipping, smaller retailers will be forced to choose whether they want to pursue the fast and free shipping race which Amazon started. Rather, Enright suggests that it’s crucial to understand customers rather than following trends around speed. When there’s indeed a need for speed, it’s possible to incentivize sustainable satisfaction alternatives for people who desire them.
AI: Retail’s Competitive Advantage
In 2020, we will see supply chain teams realize the claims of AI, garnering insights on the best way to enhance KPIs like on-time functionality and price to serve. This season, through development and technology in automation, retail supply chains will evolve from being a cost center to an investment for their entire organizations. McKinsey & Company (via SupplyChainBrain) even jobs that companies will gain” between $1.3 trillion and $2 trillion each year in economic value by using AI within their supply chains.”
While many retailers utilize spreadsheets to patch data jointly, AI can make it a lot easier to surface real-time information needed to do it.
Cracking The Omnichannel Code
Access to AI and automation enables brick-and-mortar retailers to proceed smoothly across stations. As physical and digital converge, retailers need to deliver a completely integrated shopper encounter to acquire. According to research conducted by Forrester and IBM, 94 percent of retailers consider omnichannel satisfaction to be”a top or high priority.” Meanwhile, 7 in 10 shoppers are unlikely to make another purchase from a new after having a poor delivery experience.
With visibility into real-time information along with the power to connect datasets, brands can more easily maneuver between channels and silos, impacting end-to-end forecasting, in-store pickup and much more. Amazon has obtained a leap into the physical world, setting Amazon Go in 2019, utilizing technology to join its customer information across channels and allowing Amazon users to bypass checkout. Amazon’s 2017 purchase of Whole Foods has contributed the newest hundreds of outlets where customers can pick up online orders and take advantage of Prime discounts.
The Changing Face Of The Storefront
With population shifts and urbanization, the store will look different in 2020. Stores will end up showcases, providing services that are immersive. Innovators such as Ikea are concentrated on this now, creating urban centers for clients to browse, benefit from in-store services and send items directly to home delivery. We are going to see more brands emphasize experiences over selection in a search to produce high lifetime value (LTV) brand advocates.
Additionally, stores are an increasingly essential asset for swift, low-cost order fulfillment. They provide an efficient solution to centralized warehousing, where shipping can be more costly than using local sockets as de facto distribution depots.
We are going to see more retailers leverage supply facilities to provide efficient solutions for clients and flip unused back-of-store space into automatic, hyperlocal mini-fulfillment facilities, after Target’s lead. Store-to-store delivery and ship-from-store house delivery can help stores maximize their potential.
As they offer experiences for shoppers, stores will also hone their buy online, pickup in-store (BOPIS) plans for clients who need hassle-free order pickup. Start looking for more self-service lockers or towers and curbside delivery services to add yet another dimension to store fulfillment.
One Thing Is Certain: The Customer Will Win
With retailers racing to match Amazon in rate and cost, it’s critical to handle expectations across the customer travel. By making accurate promises and investing in the tools that keep the retailers will leapfrog their competition.
In case the past couple of years have indicated anything, it’s that an evolving supply chain benefits all consumers. With the increase of competition and technology, consumers can require more out of their retailers. Not to fear: With so much information, insights and technology, 2020 is annually old empowerment for retail distribution chain leaders. The capability to create smarter, data-driven decisions creates predictable experiences that customers demand. People who succeed will have the ability to retain customers while efficiently managing costs, leaving everyone else in the dust.