Report: Majority of Retailers Fall Short in Meeting Customers' Omnichannel Expectations

The rate of omnichannel adoption and digital transformation across the retail sector has remained high over the first half of 2022. However, new industry data shows that retailers and brands still have significant ground to cover to meet evolving customer expectations.

The 7th annual Omnichannel Retail Index by OSF Digital’s strategy team (formerly FitForCommerce) found that leading retailers and brands are aggressively increasing adoption rates of omnichannel and digital best practice capabilities — e.g., optimized search, frictionless checkout, and cross-channel services. Despite the industry-wide shifts, the benchmark study also found that most companies in the Index, which examines 115 leading U.S. global retailers and brands, still struggle to deliver the high-quality shopping experiences that customers expect. The majority of companies in the Index score below the overall average of 61 percent.

When it comes to delivering seamless, convenient and frictionless shopping experiences across all channels, the sector at large still has significant room for improvement. As we all know, a better shopping experience may only be a click away, and not delivering on customer expectations can have serious implications for the bottom line. Retailers and brands should consistently benchmark their omnichannel capabilities and performance against their competitors and their peers in other verticals to identify gaps and opportunities to differentiate and elevate the shopping experience.

Here are some key findings from the 2022 Omnichannel Retail Index to get you started:

Key Finding No. 1: A Sharp YoY Uptick in Adoption for Index Leaders

The highest-ranked retailer for the 2022 Index implemented 85 percent of the Index’s predetermined omnichannel and digital best practices. The score represented a 13 percent increase from the 2021 Index leader, which implemented 72 percent best practice capabilities. A dozen companies scored above 72 percent this year, indicating that retailers and brands are prioritizing omnichannel and digital transformation within their operational strategies.

Key Finding No. 2: The BOPIS Experience Falls Short

Offered by 85 percent of companies in the Index, buy online, pick up in-store (BOPIS) has gone from best practice to a table stakes capability — curbside pickup skyrocketed from just 4 percent in 2019 to 62 percent. However, the overall experience of BOPIS and curbside pickup still lags behind customer expectations.

The ability to schedule predetermined pickup times, filter products by store availability, and offer curbside returns are instrumental in meeting shopper expectations for frictionless experiences; however, the adoption of these capabilities and more have mainly remained flat in the past years. So many companies rushed to implement critical omnichannel capabilities during the pandemic, often developing band-aid solutions. As a result, the overall experience suffered. Now is the time to evaluate existing technology and resources, prioritizing order management, data, and inventory visibility in order to refine and optimize the omnichannel shopping experience.

Key Finding No. 3: Buy Now, Pay Later (BNPL) Offerings Are on the Rise

As retailers and brands look to broaden their customer base and explore new ways to close a sale, the adoption of alternative payments and buy now, pay later (BNPL) features continues to accelerate. The recent announcement by Apple that it's entering the BNPL market further underlines the growing popularity of this payment option. A customer favorite, especially among younger shoppers, BNPL is one of the fastest-growing criteria in the Index, today offered by 74 percent compared to just 38 percent in 2019. Some retailers strategically leverage different BNPL payment providers for different products or categories to boost conversion rates.

Key Finding No. 4: Brands Are Increasingly Embracing Sustainability

With sustainability fast becoming a key consumer priority, this year’s Index measured, for the first time, how organizations are embracing and prioritizing sustainability. More than 66 percent of retailers and brands promote sustainable products or have implemented more extensive sustainability programs such as goals for reducing carbon footprints, green packaging, and more. While it may not immediately impact sales, many consumers favor companies that embrace these issues, which in addition to being the right thing to do, leads to longer-term brand loyalty and advocacy.

Looking Ahead

When the Omnichannel Retail Index​ was first launched in 2015, the overall adoption of digital and omnichannel best practice capabilities was 54 percent. Today, the overall adoption of best practices is 61 percent. Although a greater number of retailers and brands have taken giant leaps forward with adoption rates, the majority still fall below the average. The industry, as a whole, must do better to align with shopper demands and deliver high-quality experiences across all customer touchpoints. For retailers and brands, knowing how they stack up against competitors and peers will help build omnichannel and digital acceleration road maps and prioritize investments where they will have the most impact.

The Omnichannel Retail Index takes the pulse of digital commerce and omnichannel retail. The Index examines how 115 leading U.S. and global retailers and brands perform against 250-plus criteria across web, mobile and in-store capabilities. The Index examines how these companies deliver on the omnichannel promise through detailed and extensive mystery shopping conducted by OSF Digital’s strategy consultants.

You can view the full findings here. For more information about the Omnichannel Retail Index criteria and to learn how your company stacks up, please contact omnichannelretailindex@osf.digital.

Gerry Szatvanyi is the CEO of OSF Digital, a top digital transformation and leading global commerce solutions company to some of the world’s most well-known brands. Kathy Kimple is the executive director of OSF Digital’s Strategy Group, helping brands and retailers with their omnichannel strategy and execution.