Over this past year I've tried to find green shoots of optimism for multi-channel retailers around the world in the form of taking a 'problem - solution' approach to writing my blogs, post, and LinkedIn articles.
If you have taken the time out to read them and find them of interest and value I appreciate your ongoing support - so, THANK YOU!
As the pandemic gathered pace we were reminded on a daily basis of the ripple effect across many sectors in relation to not only business closures but also the human element.
As the industry evolves in this digital age, retailers are now struggling to keep up in the quickly changing environment.
As most have found, the key to success is adaptation. Retailers must not only understand the new landscape, but also how to successfully navigate it to sustain forward progression and revenue.
As footfall continues to be a challenge for physical retail we have been seeing staggeringly little innovation other than more discounting from brands desperate to offload stockpiles in stores, warehouses, and supply chain commitments. Add into the mix that the UK is also suffering from a logistics challenge in relation to a shortage of qualified lorry drivers along with a shortage of key staff and things are becoming increasingly challenging.
As the festive shopping clock ticks by (at time of writing this It's 'ThanksGiving' week in the US) we are being advised we might have to choose between food or presents this Christmas.
Of course retail sails (pun intended) are already set for 2021, but what about 2022 and beyond?
Where is the disruption coming from, is it from within or elsewhere?
Direct-to-consumer retailers offer prices lower than traditional retailers, though these lower prices most times come with longer delivery windows - this is the Amazon model.
Current cross-border retailers often have delivery times of up to 45 days, with a lack of quality assurance.
In the ongoing digital transformation of the retail space, shoppers prefer 2-3 day delivery service over any other shipping speed, making major players such as Amazon highly successful as they tout two-day shipping.
While prices may be higher than cross-border sellers, consumers value the flexibility of fast logistics.
"Fast logistics are crucial for businesses in today’s competitive retail and ecommerce space. Consumers value expedited delivery and quality products, leaving cross-border retailers a competitive edge if able to leverage the two"
Modern ecommerce players are working to revolutionise the cross-border model by capitalising on a quality guarantee and the ability to deliver goods swiftly with a factory-to-consumer model that eliminates unnecessary touchpoints in the supply chain and ultimately reduces costs of products for the consumer.
With the right use of cross-border logistics, ecommerce is set to be the future of retail, as long as these businesses can provide a positive user experience and a cost efficient operating model - however the current reality is far from perfect for D2C;
According to Nosto, 64% of ecommerce returns happen because a product does not match the description.
With this high return rate, return deliveries were predicted to cost retailers $550 billion in 2020. Given this high cost, many ecommerce platforms are now turning towards closed marketplace models.
A closed marketplace provides retailers with control over their product selection, featuring the ability to work directly with factories and suppliers to select products sold on the platform.
This allows retailers to conduct a thorough sourcing process, ensuring that the products offered closely align with the brand’s quality values.
Key to any successful business is consistency in the brand promise combined with managing consumer expectations around the offer.
In today's digital and socially savvy world there is one key conversation element available to retail that has never really been leveraged to potential before.
Retailers had been toying with features such as video chats and livestreaming to make e-commerce more pleasant and personable even before the coronavirus forced store closures.
Today for many the online shopping experiment is pivoting from hype to a longer-term strategy. My guess is those that understand that you cannot be all things to all people along with how best to 'leverage' social media and other consumer engagement techniques such as 'live streaming' as your own personal online 'sales associate' will be the brands of the future.
Today’s cross-border retailers have become known for their poor-quality products and negative customer experiences, which lead to negative brand perceptions. These retailers mostly operate under an open marketplace model, allowing for third-party sellers to list items without regulation from the retailer. While this creates uncapped potential for a retailer’s product catalog without much legwork from the retailer, there is little to no regulation over what is being listed and the quality of the products.
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