Today's consumer is a digitally savvy shopper who expects to find and receive the products they want, when they want them. Armed with a slew of online resources that, thanks to mobile devices, can be accessed from anywhere, consumers have created a technological evolution that's changing the omnichannel retail world as we know it.
As online and offline channels merge into a seamless whole, what are the characteristics of the new consumer, and what do retailers need to understand and respond to? Kibo’s 2016 Consumer Trends Report surveyed more than 3,000 consumers across the United States and United Kingdom to get a better picture. And the most critical trend to emerge? Consumer loyalty is rapidly eroding.
Due to the explosion of choice brought about by the internet and shoppers’ love of mobile, today’s digitally demanding consumers have less of an attachment than ever to specific retail brands. In fact, more than half of the respondents (60 percent) to the survey said they would purchase elsewhere if their preferred method of delivery wasn’t available.
Consumers now carry no qualms about ditching their brand loyalty in exchange for the right price point or shipping offer. The bottom line is that when a consumer finds a competitor offering a better deal or faster shipping, they don’t hesitate to jump ship.
How Important is Fast Fulfillment?
This six-in-10 statistic serves as a stark reminder of how important delivery options are to the tech-savvy consumer. Furthermore, though many shoppers now expect fast shipping, they’re not willing to pay for it. According to the report, one-third of consumers expect same-day delivery for free.
Fast, free shipping is so important that consumers are prepared to play the system to their advantage if it saves them some money. For example, one in seven U.K. shoppers and one in nine U.S. shoppers admitted they have bought extra items to ensure they qualify for free shipping, and then returned them.
Putting it brutally, that’s more than 10 percent of shoppers prepared to deliberately con retailers out of money to get a better deal for themselves.
How Should Retailers Respond to This Erosion?
Retailers must take note: the type of fulfillment scenarios consumers want are changing rapidly. Shoppers don’t care where the product ships from, whether that be a warehouse across the country or a retail store in their county, provided it arrives quickly. To address this consumer demand, forward-thinking retailers should implement two essential omnichannel fulfillment options: ship from store and in-store pickup.
- Ship from store: Shipping times are directly linked to the distance from the fulfillment location to the consumer. By using store locations rather than warehouses as fulfillment centers, retailers can decrease delivery times and shipping costs. On average, store locations are 47 percent closer to customers than warehouses, and nearly half of those locations are located within 300 miles of the shopper. With ship from store, you keep in-store inventory turning, lower shipping expenses and increase customer satisfaction.
- In-Store pickup: Customers are continually proving their preference for in-store pickup, including a full one-third in the Consumer Trends Report who said they're less likely to buy from retailers unable to offer in-store pickup. This is great news for retailers, as in-store pickup is the ultimate solution to high shipping costs. Consumers receive their products on the same day they placed their order, and retailers don’t pay shipping expenses while simultaneously driving traffic into their stores.
If omnichannel fulfillment options such as ship from store and in-store pickup are so beneficial to both retailers and consumers, then why aren’t these options more widely embraced? The reason is because most retailers don’t have the technology systems in place to profitably run these new fulfillment methods.
The secret is that with a clear process and a flexible, modern technology solution, any retailer can turn itself into an omnichannel success story. For example, using an enterprise-class, cloud-based order management system will allow you to easily implement ship from store and in-store pickup (among many other things).
As the lines between the online and in-store journey blur for many consumers, using powerful and nimble technology like an enterprise-class order management system will offer the best possible shopping experience and give loyal customers no reason to look anywhere else.