It’s an Omnichannel World … But Not So Much in the U.S.
The world of omnichannel retail is about connections. Connecting consumers to products they’re looking for. Building resilient connections between every shopping channel. Working to connect people’s expectations to the experiences they’ll have in-store and online. Retailers that work to build stronger omnichannel connections will win shopper loyalty while staying efficient and competitive, too.
Despite being one of the larger retail markets in the world, the U.S. has room for improvement when it comes to omnichannel capabilities. Last year, we introduced the inaugural Omni-1000 Research: Global. The report outlined points of opportunity for U.S. retailers, specifically in the areas of click-and-collect and inventory visibility. This year, our pool of retailers grew to more than 2,000, with 750 retailers in the U.S. alone. The findings were promising when compared to the conclusions drawn in 2017, however, the U.S. still has ground to make up in omnichannel.
Free Shipping Sells, But at a Higher Threshold
In order to drive online purchases, offset shipping costs, and compete with industry behemoths, retailers offer free shipping with a minimum purchase. No surprises there. However, despite pressures to offer free shipping, the highest minimum orders required came from the U.S., alongside Germany and Austria. Our research found that U.S. minimum purchases average 30 percent more than that of Canadians to qualify for free shipping. The U.S. is unique in its growing trend for some retailers to use free shipping as only an occasional promotion. We don’t see this as much in other countries.
U.S. Trails in BOPIS Adoption
Across the U.S., U.K., Canada, Australia, France, Germany and Austria, 37.6 percent of retailers currently offer buy online, pick up in-store (BOPIS). When you focus on in-store pickup options from U.S. retailers, that falls to 27.5 percent. This signals the need to adopt new technologies and processes, quicker. After all, omnichannel customers are likely to spend more money, shop more frequently, make fewer returns, and stay loyal to favorite retailers.
The outlook isn’t all unfavorable for the U.S. When you compare retailers surveyed in both 2017 and 2018, U.S. BOPIS availability grew 5.7 percent in one calendar year. We should be encouraged by this growth as we endeavor to give shoppers more options.
Large Opportunity for Midsize, Plus Better Timing for All
From a global view, you’re more likely to find BOPIS among enterprise retailers. Forty-eight percent of retail chains with 250-plus stores offer the service, compared to 31.5 percent of chains with 10-50 stores. This points to a clear opportunity for midsized retail chains: BOPIS can be your differentiator.
Last item on the topic of BOPIS: order readiness. Consumers want instant gratification. Yet only 34.8 percent of global retailers with in-store pickup commit to having orders ready within 24 hours. This is yet another area all retailers need to tighten up and improve upon to meet customer expectations.
Getting Up-to-Speed is Daunting, But Just Take the Right Next Step
Overall, the needle is moving in the right direction — retailers just need to accelerate the pace. We see plenty of opportunities for U.S. retailers to improve: mobile commerce, strengthening social media as a sales channel, offering BORIS (buy online, return in-store) or free return shipping more often, and providing active inventory visibility online. The key for any retailer is to determine which "next step" to prioritize first. Improving technology, investing in an order management system, or making changes to brick-and-mortar operations for accommodating quicker in-store pickups are just a few capabilities to prioritize. Arriving at a more competitive omnichannel status is a collection of small, yet deliberate steps taken to get there. Where will you start?
Charles Dimov is the vice president of marketing at OrderDynamics, a retail order management system.
Related story: Total Retail's 2018 Top 100 Omnichannel Retailers