It’s no surprise that today’s consumers are increasingly leveraging digital platforms, but new research from retail insights firm Incisiv, in collaboration with Blue Yonder and Microsoft, reveals that a whopping 93 percent of all shopping journeys now start online, up from 81 percent in 2020—making a seamless and intuitive omnichannel experience critical.
But ever-evolving shopper needs make it increasingly challenging for omnichannel brands and retailers to meet and exceed their expectations, thus foundational capabilities are required to address these expectations, reveals the firms’ new 2023 Omnichannel Experience Index. The absence of these capabilities has a negative impact on not only digital performance KPIs, but also revenue and shopper satisfaction.
“Retailers across sub-segments adopted digital capabilities at an accelerated pace over the last two years. The speed of digital transformation might appear to have slowed a bit on the frontend as retailers take a step back and shore up the capabilities to enable a seamless truly omnichannel experience,” said Gaurav Pant, chief insights officer at Incisiv, in a news release. “However, shopper preferences are a moving target, and retailers must continue to continuously transform to meet expectations, especially as customer retention is getting increasingly difficult.”
“A re-imagined omnichannel operating model aligned to evolving consumer needs will ensure retention. We conducted this study to help retailers understand how they compare to their peers, as well as identify high-impact improvement opportunities for digital transformation,” Pant said.
Key findings of the report include:
Inventory visibility is a must for shopper retention. Shoppers want to know exactly what products and services are available to them. Forty-six percent of shoppers check stock availability online before making a purchase and 55 percent want to browse products online to see what’s available in nearby stores. The index found that 36 percent of retailers in the leader category provide real-time inventory status, while 67 percent of retailers assessed have inventory status callouts (e.g., selling fast, in-stock, out of stock, etc.).
Offering a complete flywheel of online and store-based fulfillment is now table stakes. The report found that 56 percent of shoppers have abandoned their carts due to concerns about delivery time. The index also found that 75 percent of shoppers expect their purchases to be delivered within two days or less, thus transparency about delivery timeline is vital. Displaying the delivery timeframe provides much-needed clarity to the shopper. However, only 9 percent of retailers show order dates per destination code on the product listings pages.
Cost and payments
Loyalty in online shopping is low and shoppers’ expectations are at an all-time high. The report found that 45 percent of online shoppers defect for better deals and 79 percent value unlimited free delivery programs. Consumer electronics retailers (40 percent) are most likely to offer free delivery. However, industry average adoption for free shipping on all orders is low at 11 percent.
Post-sales service, including retailers’ return policies and engagement practices, directly contribute to shopper loyalty. The report found that 95 percent of shoppers will remain loyal to a retailer with a self-service return process and 49 percent of shoppers actively check retailer’s return policy before purchasing to seek convenient options. Even further, 86 percent of shoppers will pay 15 percent more for a seamless customer service experience. The index found that 62 percent of retailers now offer the ability to initiate returns online, up from 51 percent in 2021.
“Retailers must curate omnichannel experiences that can keep up with the ever-evolving demands of shoppers,” said Erin Halka, senior director, Solution Strategy – Commerce at Blue Yonder, in the release. “Shoppers are loyal to retailers that provide their ideal experience, therefore digital transformation in retail isn’t slowing down. In order to retain their shoppers, retailers must continue advancing their omnichannel capabilities and offer a full-service experience so they can stay ahead of the competition.”
Incisiv recognized 20 retailers and brands as “Leaders” in the report. Leaders offer the richest omnichannel experience maturity across the four key areas of the index.
“To win at the four key findings of this index, retailers need to unify their consumer and operational data that resides in disparate applications … by enriching their data with additional data sources, providing access to insights across organizational silos,” said Shelley Bransten, corporate vice president, Global Retail & Consumer Goods Industries at Microsoft, in the release.
Incisiv’s 2023 Omnichannel Experience Index is based on insights from its proprietary digital maturity benchmarking methodology. The insights span 115 retailers, 104 digital capabilities and seven industry segments. Each retailer’s returns capabilities and experience were assessed using an observational methodology.