10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020 - INDUSTRY REPORT AND FORECAST - Orckestra
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INDUSTRY REPORT AND FORECAST 10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
INDUSTRY REPORT AND FORECAST “THE CUSTOMER IS ALWAYS RIGHT.” THAT ADAGE STILL HOLDS TRUE TODAY As an omnichannel retailer, your shoppers’ evolving needs and expectations will continue to challenge your status quo, but will also present unexpected opportunities for greater efficiency and growth. This can be hugely beneficial if you have the right tools in place. We encourage you to keep this in mind as you consider these 10 major trends changing omnichannel retailing in 2020. Orckestra 2
10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
01/ VALUE-BASED CONSUMERS
ARE VOTING WITH THEIR WALLETS
Before putting their money down, customers in your physical and virtual aisles are
asking questions like:
How does the manufacture of this product affect the environment?
How does this product impact the community that made it?
What are the manufacturer’s values?
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10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
To ignore consumers seeking to buy socially responsible products is to lose out on a
major sales opportunity. Consider these survey results by Nielsen, a global sales
research and analytics company:1
81%
of global respondents say that it is “extremely”
or “very” important that companies implement programs
to improve the environment
73%
of global consumers say they would definitely
or probably change their consumption habits to reduce
their impact on the environment
30% of global respondents are willing to pay a premium
for products that deliver on social responsibility claims
Nielsen projects that sustainability-minded shoppers will spend up to $150 billion on
sustainable consumer packaged goods by 2021, representing an increase of between
$14 billion and $22 billion, based on three- and two-year combined average growth
rates.
While sustainability claims that drive growth will vary across product categories,
keeping an eye out for products that make well-considered claims based on consumer
insights will help lift your top line.
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10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
02/ SHOPPERS EXPECT A SEAMLESS AND
CONSISTENT EXPERIENCE FROM ONE
DEVICE TO ANOTHER
When your customer Diana moves from shopping on her phone during
her coffee break to shopping on her laptop in the evening, she wants to pick up
exactly where she left off.
It’s important to meet this expectation because a consistent brand experience
increases trust among your shoppers, thereby increasing your sales conversions
and customer loyalty in the long term.
Consider the following findings based on 10 billion payments processed by Ayden,
a global all-in-one payments platform:2
Omnichannel Omnichannel Single-channel
shoppers spend shoppers spend shoppers spend
30%
more per purchase
4X
a year with
2X
a year with
the same retailer the same retailer
60% in-store / 40% online 80% in-store / 20% online
Naturally, retailers who wish to profit from this trend need an omnichannel platform
that creates a seamless and consistent brand experience across devices and channels.
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10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
03/ IMPROVED PERSONALIZATION
IS CHANGING THE FACE OF RETAILING
Shoppers love personalization. They react favourably and spend more when retailers
present them with related products and value-added upsells. Consider the following
survey results:3
49%
of U.S. shoppers
40%
of U.S. consumers
said that, in the past three months, said that a personalized experience
a brand’s personalized recommendation persuaded them to spend more on a
led them to buy a product they had not purchase than they originally planned
initially intended to buy
Show your shoppers how well you know them. With a unified view of the customer
across all channels, you can provide relevant and helpful information that
features personalized products,
provides recommendations (e.g., special offers, gift ideas, items from wish
lists or abandoned carts), and
proposes shopping services that respond to customer needs.
As artificial intelligence, machine learning, and big data processing tools become
increasingly accessible, these personalization options become easier and less costly
to carry out.
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10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
04/ MOBILE ECOMMERCE
IS HITTING THE GAS
To keep shoppers engaged as they move through their buying journey, their mobile
experience needs to be fast and easy.
But many shopping storefronts are not optimized for mobile devices. Shoppers who
want to proceed to checkout on a mobile site must tap through an average of three
pages of form fields.4
The good news is that mobile wallets, which store a shopper’s credit card information,
are making life easier for shoppers. Studies have shown that retailers with a mobile
wallet option see orders grow by 14% and conversion rates grow twice as fast as their
non-mobile wallet counterparts.4
Orckestra 710 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
Another step toward a fast and easy mobile experience is the rise of the progressive
web app (PWA), which is a native app and web app hybrid. PWAs have the following
qualities:5
Reliable Fast Engaging
They load instantly, They respond quickly They feel like a natural
even in unreliable to user interactions app on the device
network conditions
A PWA can sit on the user’s home screen and offer a full-screen shopping experience.
If desired, it can even drive user engagement by sending push notifications.
Orckestra 810 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
05/ CUSTOMER SERVICE
IS BECOMING MORE PROACTIVE
When customer experience is what you build on to differentiate your brand, customer
service can’t be regarded as a cost centre.
Instead, it needs to be seen as a driver of wallet share, customer retention, and
customer delight. In a Microsoft survey of 5,000 people from Brazil, Germany, Japan,
the United Kingdom, and the U.S.:6
54%
of respondents said
66%
of 18- to
66%
of global respondents
they had higher 34-year-olds said said they actively used
expectations for they had higher three or more channels
customer service today expectations for customer service
compared to a year ago compared to a year ago
Given this context, omnichannel retailing allows your customer service and marketing
teams to do the following:
+ Notice purchase patterns that provide you with opportunities to cross-sell or upsell
+ Assess and address any latent problems your customer may be experiencing
+ Provide helpful services or product recommendations that complement your
shoppers’ purchases
+ Notify customers immediately about errors or problems
+ Automate tasks that the shopper would normally have to carry out manually, such as
scheduling appointments or making payments
+ Go the extra mile to improve a shopper’s experience
Orckestra 910 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
06/ PHYSICAL STORES ARE DELIVERING
NEW SHOPPING EXPERIENCES
Because online shopping is easy and convenient, you need to give your customers
equally compelling reasons to visit your stores. Here are some suggestions.
CREATE SPECIAL EVENTS
Shoppers are drawn to special retail events. Consider these findings from a National
Retail Foundation survey:7
58% of shoppers said they were interested in going
to special events
87% said they would go to a store for a sale or early/exclusive
access to products
80% said they would go for a product demonstration
Consider how the following events could increase your store’s traffic: pop-up shops,
VIP parties for your most valued customers, craft workshops, cooking classes,
expert-led demonstrations on wine, beauty, fitness, nutrition, renovations, or fashion,
and more.
Orckestra 1010 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020 Showcase products and promotions that are only available in-store Through your site and communications, ensure that your customers know that some items/experiences are only available in-store: + Stock products (e.g., seasonal items) that are only available in-store + Offer services via partnerships with third-party providers (e.g., spas, travel agencies, culinary schools, tech service providers, etc.) that complement your product offering Make sure that shoppers discover something new with each visit Keep your stores looking fresh by playing with your layouts and refurbishing displays every so often. Orckestra 11
10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
07/ IMPROVING THE RETURN
ON RETURNS
With “hassle-free” returns and free shipping being such an integral part of many
retailer value propositions, returns have become both a huge headache and a drain on
profitability.
The cost of returned packages in the U.S. is tricky to estimate, but in 2017, it was
pegged at $381 billion, and is expected to reach $550 billion by 2020. That’s a 44%
increase over four years.8
These figures don’t include restocking costs, inventory losses due to obsolescence/
devaluation (e.g., fashion and seasonal items), the expansion of your staff and
warehouse space, and the set-up of teams to work on reverse logistics.
To minimize the impact of returns, retailers are resorting
to the following tactics:
+ Discreetly raising the qualifications for free shipping
+ Implementing processes to combat fraud (e.g., enforcing a stricter return policy
during the holiday season)
+ Setting up new technology to reduce the possibility of returns (e.g., software that
ensures a better fit for apparel)
+ Using their physical stores as points of return and exchange for their online
customers (thus reducing shipping costs while creating opportunities for upselling
and cross-selling)
Orckestra 1210 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
08/ SOCIAL MEDIA PLATFORMS
WANT TO HELP YOU SELL
Traditionally, social media platforms were engines for raising awareness, driving
traffic, and offering customer service. However, people like to shop where they hang
out. After all, that’s where their purchase intent and excitement are highest.
Social media platforms are seeking to cash in on this behaviour by becoming more
transactional. The research firm Gartner analyzed 424 brands and discovered the
following:9
60% of brands had adopted social commerce features within
the last 12 months
More than
50%
were using Facebook’s Shop Now button, which links
visitors directly to the brand site or a landing page
41% had taken advantage of Instagram’s
shoppable content options
17% were using Facebook’s equivalent service
These social commerce tools are still very much in the toddler stage in Western
countries. Meanwhile, many features that we’re familiar with in Facebook and
Messenger were implemented first in China’s WeChat.10 This app, the fifth most used in
the world, shows social commerce sales via revenue-sharing growing at a 33%
quarterly rate.11
Gartner urges brands to experiment with these social commerce features and push
platforms to add on-site buying options as well.9
Orckestra 1310 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
09/ SIMPLIFY YOUR RETAIL
LIFE WITH AI
You don’t need to hire experts in systems design, machine learning, or big data
processing to profit from artificial intelligence (AI). As we noted in the discussion of
our third trend (personalization), AI is now easily accessible for any number of
labour-saving tasks and will be used by an increasing number of retailers.
Consider these findings from an IBM survey of 1,900 leaders in retail and consumer
products across 23 countries.12
85% of retail
79%
and of consumer
79%
of retail and consumer
products companies products companies
expect to be using
intelligent automation
plan to be using intelligent automation
for customer intelligence
for supply chain planning by 2021
by 2021
Retail and consumer products executives anticipate
that intelligent automation capabilities
will help increase annual revenue growth by up to 10%
Orckestra 1410 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020 As an example, let’s look at the creation of product content. Online inventories have vastly expanded the number of SKUs that retailers can offer on their virtual shelves. These products cannot be sold unless they have appropriate content describing their attributes (e.g., colours, sizes, specifications, features, etc.). Most often, this data comes from vendors who may offer product content of varying quality or terminology. As a result, retailers must sort through, organize, and tag mountains of product content data. With AI and its machine-learning capabilities, you can accelerate the process of efficiently tagging and categorizing products. Using text-based classification tools, you can train various AI models to simplify your product categorization and content creation. Orckestra 15
10 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
10/ CUSTOMER NEEDS DEMAND
NEW FULFILLMENT STRATEGIES
Customers want convenience. Omnichannel retailers need to respond by offering
convenient pickup or delivery options that keep customers happy.
Omnichannel retailers with the right order fulfillment system can offer delivery
options such as:
Ship-from-store
Ship-to-store for when the store selected for pickup does not have the inventory
Buy online/pickup in-store (BOPIS)
Reserve online/pickup in-store
Same-day pickup or delivery
Shipping with varying options for speed and cost (e.g., express, two-day, free)
For example, the number of shoppers using the BOPIS option (a.k.a. “click-and-collect”)
continues to grow every year and reached 55% in 2018.4 That’s not surprising,
considering that BOPIS benefits both shoppers and retailers.
For your customers, BOPIS offers all the convenience of online shopping. Since
shoppers pick up their own items, they never have to worry about potential delivery
delays.
BOPIS also relieves you of all last mile delivery logistics and costs. Furthermore, once
shoppers are in your stores, they are more likely to buy other items and increase their
total order value.
Orckestra 16INDUSTRY REPORT AND FORECAST
RIDING THE TRENDS TO SUCCESS
Given these 10 trends, the challenges of responding profitably to the needs and
expectations of omnichannel customers may seem daunting. It is true that, to continue
to thrive, you can’t ignore the gap between what your shoppers want and what your
existing technology can deliver.
We can help you bridge that gap.
With Orckestra’s suite of omnichannel commerce services, you can fully reap the
benefits of omnichannel order fulfillment without the need for a complex and risky
re-platforming project. Orckestra’s API-first approach allows you to interface with the
OMS and/or ecommerce systems you already have in place so you can get started in
only 90 days.
Our experts are available to help you take the first steps to building your omnichannel
fulfillment strategy.
Contact us today!
Orckestra 1710 TRENDS CHANGING OMNICHANNEL RETAILING IN 2020
References
1. The Nielsen Company. (May 1, 2019). Sustainability Continues to Drive Sales Across the CPG
Landscape. Retrieved from https://www.nielsen.com/us/en/insights/article/2019/sustainability-
continues-to-drive-sales-across-the-cpg-landscape/
2. Ayden.com. (2019). The Unified Commerce Index. Retrieved from https://go.adyen.com/rs/222-
DNK-376/images/UNIFIED%20COMMERCE%20INDEX.pdf
3. Segment. The 2017 State of Personalization Report. The recruitment period was September 8–14,
2017. A total of 1,006 respondents 18 years and older and living in the United States who have
shopped online in the last six months completed the survey. Retrieved from https://segment.com/
resources/
4. Salesforce. 2018 Holiday Readiness Guide. Retrieved from https://c1.sfdcstatic.com/content/
dam/web/en_us/www/documents/e-books/industries/BPG_HolidayReadiness%20Guide-EN-
03AUG2018-EK-FINAL.pdf
5. Google. (2019). Progressive Web Apps. Retrieved from https://developers.google.com/web/
progressive-web-apps/
6. Microsoft. 2017 State Of Global Customer Service Report. Retrieved from https://info.microsoft.
com/rs/157-GQE-382/images/EN-CNTNT-Report-DynService-2017-global-state-customer-
service.pdf
7. National Retail Foundation. (January 15, 2019). NRF Study Says More Online Shoppers Want Free
Shipping. Retrieved from https://nrf.com/media-center/press-releases/nrf-study-says-more-
online-shoppers-want-free-shipping
8. Statista. (2018). Costs of Return Deliveries in the United States from 2016 to 2020 (in billion U.S.
dollars). Retrieved from https://www.statista.com/statistics/871365/reverse-logistics-cost-
united-states/
9. Gartner. (July 5, 2018). Social Platforms & Influencers 2018: Scaling The Walled Gardens. Retrieved
from https://www.l2inc.com/research/social-platforms-influencers-2018?utm_source=email&utm_
medium=email&utm_content=social-platforms-influencers-2018&utm_campaign=email
10. Boyle, P. (2019). The Secret to the Future Growth of Your Ecommerce Channel: Social Commerce.
Retrieved from https://www.bigcommerce.com/blog/social-commerce/#what-does-the-future-
hold-for-social-commerce
11. Chen, T. (2018). WeChat Social Commerce Report 2018. Retrieved from https://walkthechat.com/
wechat-social-commerce-report-2018/#
12. IBM Corporation (2019). The Coming AI Revolution in Retail and Consumer Products. Retrieved from
https://www.ibm.com/thought-leadership/institute-business-value/report/ai-retail-consumer-
products?mhsrc=ibmsearch_a&mhq=ai%20%26%20retail
Orckestra 18ABOUT ORCKESTRA Orckestra is a leading provider of modern commerce solutions, offering a single commerce platform to create and manage the most engaging shopping experiences across the web, mobile and in-store. Built on the Microsoft Azure open cloud, our Commerce Orchestration™ platform establishes a unique central commerce layer that unifies all retail systems and customer touchpoints, and helps enterprise organizations grow their business successfully in the global marketplace. We fuel digital innovation for leading retailers, grocers and branded manufacturers, enabling them to deliver differentiated commerce experiences faster with lower IT burden and operating costs, and maximum revenue growth. CANADA DENMARK 1111, St-Charles Street West, Hoejbro Plads 10, 1. Floor East Tower Suite 255 1200 Copenhagen, Denmark Longueuil (QC) J4K 5G4 SALES: +45 39157600 SALES: 1-877-398-0999 UKRAINE ORCKESTRA.COM Coworking Platforma Leonardo, 17/52 Bogdana Khmelnitskogo Street, Kyiv, Ukraine, 01030
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