Retail is back – and customers expect more
Retailers are breathing a sigh of relief as sales increase following 2020 volatility, with Forrester estimating that US retail sales will grow 4% in 2021, primarily from an increase in online purchases of 15.5%.
However, the pandemic allowed customers to examine their values and what they want from the brands that serve them. The result is they want not only ease and convenience but also service.
According to an international Accenture survey, the “reimagined consumer” now represents 50% of shoppers. These reimagined consumers changed their values during the pandemic, and nearly half of them desire new tools and improved shopping advisory services using digital channels.
“Everywhere commerce” is another trend, allowing customers to buy from anywhere and pick up their purchases from store, locker, delivery, or other channels.
With rolling closures and lockdowns, more consumers have embraced ecommerce but that doesn’t mean they’ve stopped shopping in-store. Instead, they expect a seamless interaction between physical and digital touchpoints.
Retailers must now be more agile than ever while providing an exceptional customer experience. A Salesforce study of 12,000 global consumers and 3,600 businesses revealed that 80% of consumers view “flawless engagement” as being just as important as product quality. Nearly 70% want companies to offer traditional products and services in new formats, especially desired by Millennials and Gen-Z. However, the most critical takeaway for retailers is this:Over 90% of customers are willing to re-purchase after a great service experience.
Retailers respond with increasing agility
Success now hinges on their ability to respond at lightning speed to meet evolving customer preferences.
Return depots, curbside pickup, video chat, virtual appointment, and social selling are all part of the expanding omnichannel strategy retailers now use to serve customers and stay competitive. Novel store formats are also gaining popularity. New offerings include pop-up stores that offer an immersive shopping experience, showcase new collections, or serve as an innovative short-term storefront. Pop ups have gained traction across verticals from high-end apparel, to food, or pet supplies.
Agile retailers are also using innovative fulfillment channels to re-purpose real estate and overcome last-mile delivery hurdles. “Dark stores” have become popular with retailers including Whole Foods, who use them as mini-fulfillment centers to serve online-only purchases.. This approach allows retailers to use existing retail or other convenient locations to efficiently pick-and-pack customer orders from a small space and provide quick delivery. Some retailers are also adding robotics that vastly increases the number of orders fulfilled in a small footprint.
The retailers that listen to their customers, think creatively, and execute quickly are winning the race. We know that the pace of change is accelerating. Rather than white knuckle it, the retailers in the lead are preparing for change by embedding agility across their organizations.
Can legacy POS systems keep pace?
Most were designed decades ago and don’t consider modern retail expectations
Point-of-sale (POS) systems are the heart and lungs of the retail-consumer ecosystem, driving efficiency and effectiveness across the organization. Because of its central role, the POS needs to integrate in-store and online purchases and fulfillment options, support evolving customer preferences and strategic priorities, and capture and leverage data appropriately across the organization. But traditional POS systems are not keeping pace with new demands.
These systems were built around retailer data requirements, not customer behaviors and they’ve struggled to adapt to new retail business models. As a result, traditional POS systems create barriers, not flow, across the organization. Executives, IT teams, store associates, and customers are all forced to work around technology that’s highly-fragmented and largely incompatible with how modern retail actually works.