The last couple of years have accelerated a transformational shift in consumer expectations along with new shopping behaviours and trends. The customer is king as the saying goes, and so it is paramount that retailers know what their customers want. But this is easier said than done. The pace of change in the retail ecosystem has been phenomenal, with many retailers being caught off guard. An information explosion and democratisation of technology coupled with an increasingly aware consumer hunting for convenience has changed the complexion of retail. More than ever before, shoppers make the rules.
According to McKinsey, 75% of consumers tried a new shopping behaviour due to economic pressure, store closures, and changing priorities as a result of the pandemic. The mix between online and in-store is shifting as well with more consumers getting comfortable with a hybrid experience.
In addition, the purchase journey today has become a complex web of interactions where shoppers endlessly loop between exploration and evaluation, creating a space of triggers and purchases where most shoppers are won or lost. Understandably, many retailers do not yet have the commerce platforms to deliver a great search experience for shoppers. This leads to huge losses due to search abandonment as shoppers leave retailers’ websites if they do not find what they are looking for. Conversely, a good search experience often results in higher purchase conversion, larger order sizes, and brand loyalty.
The rise of ubiquitous shopping and the race to become “channel-less”
What is clear now is that shoppers do not think in channels. Hence, retailers need to shift the focus from their own point of sales to the whole shopper journey — from discovery, to awareness, and to consideration, by which time the decision to purchase from a particular channel becomes merely an exercise of convenience, economics, and trust.
It is therefore not enough for retailers to just have their own e-commerce platform; they must have the ability to provide a great experience across the whole shopping journey, irrespective of the point of sale. Here are three foundational capabilities for retailers seeking to deliver ubiquitous shopping experiences.
- First, build a next-generation digital commerce platform. This is the foundation on which retailers are building their capabilities to navigate this channel-less world. There are three possible approaches to modernising digital commerce platforms. Retailers can either go with headless commerce (where they custom build their own front end but rely on ready-made back-end commerce infrastructure), build their own commerce platform from end to end, or go completely with an off-the-shelf solution.
- Second, increase consumer engagement and deliver personalised experiences. Once they have built their next-generation digital commerce platform, it is then time to build capabilities around delivering a seamless and personalised search experience.
- Third, bolster e-commerce fulfilment capabilities and enable quick commerce. E-commerce fulfilment with an expectation of quick delivery and omnichannel fulfilment capabilities are now becoming table stakes.
Winning in retail through digital transformation
Notably, many retailers in Asia-Pacific are already seeking to gain an edge with a new approach. As per the 2022 IDC Retail Digital Pulse — omnichannel commerce, customer retention, and fulfilment operations are among the top innovation hotspots in the region. In addition, there has been an extra emphasis among retailers to build capabilities around mobile commerce to enable them to meet shoppers’ expectations anytime, anywhere.
NTUC Fairprice, Singapore’s largest grocery retailer, for example, is building a retail ecosystem to create a diversified shopping experience for its customers. Another great example would be Lowe’s, a large home improvement retailer in the United States, that is investing in a fluid, channel-less customer experience that spans touchpoints from product discovery to return visits.
These retailers are putting out digital commerce platforms capable of delivering personalised product discovery for users to find what they need. On top of that, they are optimising fulfilment and delivery capabilities to help create an experience that customers are happy to go back for.
The shopper makes the rules. Are you ready to play?
The rules of the game have changed and are now being dictated by shoppers. Technology advancements, mobile penetration, connectivity, and information explosion have enabled shoppers to control and manage their whole shopping experience in the palm of their hands, and at the click of a button.
As more retailers embrace this challenge and forge ahead with modernisation efforts, retail experience benchmarks will gradually improve, making a great shopping experience the norm rather than the exception. For this to happen, retailers must think channel-less, meet their customers where they are, and be ready for action at the moment of truth when the purchase happens.
This not only means building a flexible digital commerce platform — a technology infrastructure capable of delivering a unified shopping experience — but also empowered teams who are able to work cross functionally, cut through silos, and keep customers at the centre of all decision-making. After all, the shopper remains king — even in an era of channel-less retail.