The dramatic increase in ecommerce volume triggered by the pandemic has had an accompanying impact on retailers’ abilities to provide profitable new forms of order fulfillment, such as buy online pickup in-store (BOPIS), ship-from-store, and curbside pickup, according to the latest report from Incisiv, commissioned by Manhattan Associates Inc. (NASDAQ: MANH).
Data revealed that the pandemic triggered a five-fold increase in ecommerce volume in 2020 compared to the same period in 2019. Amid the significant shift to online stores, many retailers struggled to grow profit margins through order fulfillment, according to the “The New Store Experience Imperatives in High-Touch Retail” report. It also identified the pressing need for retailers to create frictionless customer experiences across physical and digital touchpoints.
“The ecommerce uptick of the last twelve months has necessitated a realignment of how retailers approach leveraging store associates, locations and inventory,” commented Kevin Swanwick, vice president, store solutions, Manhattan Associates. “Associates became pickers and shippers; stores turned into mini fulfillment centers, and in-store inventory was increasingly made available online.”
As the pandemic’s impact continues to accelerate the transformation of brick-and-mortar retailers, the research revealed some key findings for retailers looking to chart a path to success in a post-pandemic world:
“Brick-and-mortar retailers still hold an important place in the evolving retail landscape, and how well brands embrace these changes to the store footprint will directly impact their overall profitability,” said Gaurav Pant, chief insights officer, Incisiv. “We recommend retailers focus on delivering safe, convenient in-store order fulfillment options. Equally important is enabling associates to communicate with shoppers digitally and providing a high-quality, consistent cross-channel experience.”
- Retailers must make store-based fulfillment more profitable. The significant growth in BOPIS, curbside pickup and other modes of fulfillment has squeezed margins. Seventy-nine percent of surveyed retailers say the profitability of orders fulfilled from stores was reduced somewhat or significantly between Q1 and Q2 2020. With 80% of shoppers expecting to increase BOPIS and curbside pickup over the next six months, it’s critical that retailers identify and address the inefficiencies causing this loss to improve profitability.
- Unified customer experience across touchpoints is key. Eighty percent of shoppers said they were likely or very likely to have digital interactions with store associates over the next six months. Yet 54% of retailers don’t currently equip their associates with the digital tools to reach out via email, text or social media, and 81% do not enable store associates to contact a customer about an online order.
- Frictionless experience is critical. The survey found that returning an item ranked as the number two motivator for future store visits by customers, second only to the need for same-day products. However, 60% of retailers surveyed do not allow shoppers to return or exchange an item during checkout, adding an unnecessary obstacle to flipping the return interaction from a loss to a profit.
- In-store inventory management needs to match warehouse accuracy. Eighty-five percent of surveyed retailers ranked inventory accuracy as a top priority to improve BOPIS and curbside pickup options. Retailers faced challenges with in-store inventory numbers that were not nearly as accurate as warehouse numbers.