Retailers have stepped up their game to satisfy rising shopper expectations across digital and physical spaces but new benchmarking research signals there is much left to do, particularly for direct-to-consumer brands.
While retailers have made strides in logistics with faster delivery/pickup and more convenient merchandise returns, they’ve lagged on the “experience” aspect by not fully exploiting digital capabilities to enhance content, customer service and one-to-one communications, according to the 2020 Omnichannel Retail Index released Friday by FitForCommerce, an ecommerce consultancy.
The report, based on mystery-shopping field research of 125 retailers and brands across 20 product categories, examined 300 digital and physical retailing criteria. The findings measure how broadly retailers offer what consumers have come to expect as standard today for delivery, personalization, assistance finding products and the overall ease of shopping (and returning goods) across physical stores, online and via mobile devices.
Retailers studied earned an average score of 54%, meaning they’ve adopted little more than half the digital capabilities consumers view as basic. Broken out as a group, direct-to-consumer brands and those without physical stores offer just 45% of the features and functions shoppers have come to expect.
“Surprisingly, retailers and brands that rely on digital (only) have the most work to do to optimize the digital shopping experience,” said Bernardine Wu, CEO of FitForCommerce.
Among key findings of the Omnichannel Retail Index:
Buy online/pick up in store (BOPIS) is rising but buy online/return in store (BORIS) is growing at a faster rate with 83% of retailers offering the latter option.
More than two-thirds of multichannel retailers provide consumers online visibility to inventory available in local stores, up from 39% in 2016.
Retailers have made progress helping online shoppers find products they want through search and sort features. However, there is room for improvement such as filtering search results according to customer ratings and in-store availability.
While many retailers have mastered basic social media practices, they fail to exploit more engaging strategies.
Opt-in text notifications to customers, offered by only 28% of retailers audited in the Index, is an untapped opportunity, given shoppers’ demand for timely updates on their orders such as delivery status.
“If anything, 2020 has taught us that digital commerce is more critical in retail than ever,” Wu said. “It’s imperative that retailers and brands master basic best practices and quickly adopt new capabilities to meet customer expectations.”
Buy online/pick up in store (BOPIS) grew from 41% in 2017 to 66% of retailers offering the option in 2019, according to the Index. The subsequent 208% boom of BOPIS and curbside pickup in April 2020, triggered by the coronavirus pandemic and stay-at-home orders, introduced new consumers to shopping without stepping foot in stores. A downside for retailers is the loss of impulse purchases that happen within the four walls of a store, like shoppers who breeze into Target for bottled water but walk out with a new grill they had not planned to buy.
Retailers losing in-store upsell opportunities should offer digital tools such as personalized product recommendations to capture sales, the study concluded.
For direct-to-consumer brands, collaboration with retail partners creates wins for everybody.
“Retailers must work in conjunction with brands to ensure that consumers enjoy an omnichannel experience that will lead to a sale,” said Moiz Ali, who founded Native, the personal care company acquired by Procter & Gamble. Native is not among the brands audited by the Index’s researchers.
“For instance, when Native Deodorant launched into Target, I went to the store to watch as people interacted with our products in stores for the first time,” Ali told me. “I saw customers pick up the deodorant and look it up online before adding to their basket. Fortunately, both Native and Target had prepared for this by soliciting reviews for the deodorant and showcasing them prominently. Without a material online presence, both Native and Target would have lost the sale.”
The Omnchannel Index’s findings indicate retailers and brands could benefit from a more sophisticated social media approach.
Fewer than half the retailers in the study permit shoppers to Share, Like, Pin or Tweet from their product detail pages to social sites like Facebook, Pinterest and Twitter. User-generated content remains underutilized: Only 44% of retailers allow shoppers to upload their own photos and just 37% pull photos posted on social media into the online experience.
Among the brands capitalizing on social media is Crate & Barrel, which features customer photos on its website and The Home Depot, whose customer-generated Q&A allows shoppers to help each other out, a feature offered by only one-third of retailers studied.
Pura Vida Bracelets is a longtime user of customer-generated content that helped build trust and a base of 2 million followers on both Facebook and Instagram. “I would recommend brands adopt some of the strategies we use to grow our following,” Pura Vida CEO and founder Griffin Thall told me. “That could be anything from building a community of loyal brand ambassadors, working with large-scale influencers or hosting engaging contests and giveaways with like-minded brands.”
Pura Vida, which is not among the brands covered by the Index, also makes use of microinfluencers as part of its social media strategy because they are often viewed as more authentic and trustworthy than big name celebrity influencers.
The 2020 Omnichannel Retail Index examines other areas of operational and customer engagement proficiency that can help retailers benchmark themselves against peers, identify opportunities and prioritize investments.
“In the past,” Native’s Ali told me, “CEOs of many brick-and-mortar retailers thought of their online presence as a separate sales channel from their brick-and-mortar stores. As consumers become increasingly comfortable with shopping online and even shopping on their phones while browsing in stores, retailers must focus on a more omnichannel approach.”