A tough year ahead for the retail industry
A tough year ahead for the retail industry. There is a worldwide struggle with the economic crisis, rising inflation, increasing fuel costs, which all translates into a general increase in the price of goods. On top of that, there are temporary supply problems, not only in basic products, but also in all kinds of technological goods. A lot of potential customers continue to work from home or hybrid, which has completely changed their shopping behavior. As if that was not enough the costs of employment are rising and the workforce itself is much harder to find.
All these aspects are strongly pushing retail chains towards digital solutions and rethinking and creating completely new business models. Let’s see 3 dominant trends that will shape commerce in 2022.
Unmanned stores on the rise
We’ve been hearing about unmanned stores for five years now, since Amazon opened its first unmanned Amazon Go convenience store in 2016. The Settle-based e-commerce giant’s store is based on image processing technology, sensors, and a mobile app (as a customer ID) that allows customers to walk into a store, select the items they need from a shelf, and simply walk out – a solution Amazon calls Just Walk Out.
Since then, not only new Amazon stores have opened – also in a larger format, but other chains around the world are opening outlets using this or similar technology. Companies have emerged, such as AiFi and Grabango, that offer “out of the box” technology needed to create an unmanned store. Among others, Carrefour has taken advantage of this by opening a Carrefour Flash store in Paris or Żabka, the largest convieniece chain in CEE, by opening Żappka Store and, together with Decathlon, Nano Store.
What is more, this technology is being adopted not only by food chains, but also by e.g. in the sports industry. The Miami Dolphins team, along with AiFi and the Verizon network, have opened a snack and sports goodies store at Hard Rock Stadium in Miami.
In theory, there are no limits to virtually any goods available in any stationary store can be sold unattended.
In the reality of 2022, self-service stores allow you to scale your business with relative ease. They provide a very fast and convenient shopping experience, which is important in this day and age, without having to interact with another human being. They are available to customers with virtually no restrictions. Not only can they be open 24/7 virtually regardless of available human resources, but with powerful analytics, they can better ensure that the merchandise you are looking for is always available on the shelf. Additionally, thanks to the fact that most of these solutions are integrated with mobile applications, they allow for better customer loyalty, creating a direct relationship between the brand and the user.
Fast delivery and pickup of everything
The last two years have seen a huge increase in the demand for high-speed delivery. Customers are less and less able to afford long purchases and even longer waits for delivery – whether it’s produce for dinner or new pants. They expect both fast delivery and easy pickup of ready purchases.
Therefore, the popularity of services like Amazon Prime or Walmart is not surprising+. Their users can even count on same-day delivery as well as on weekends. What is more, customers are willing to pay for faster and better deliveries. 66% say they pay for a better delivery service, and as many as 25% use more than one paid program.
On the same wave, the number of customers using click services is growing&colect. For retailers, the order-and-collect service has many advantages. E-commerce sales are more profitable than other types of online sales because it eliminates the cost of delivering packages to the door and allows store employees to do double duty as order pickers. Walmart generated in 2021 more than $ 20 billion in sales on the service alone C&C. At the same time, 25% of all orders C&C, in all U.S. stores, was made right at Walmart.
The other side of the fast delivery trend is q-commerce (the name comes from quick commerce). It is estimated that e-grocery will generate up to $25 billion in revenue in 2021. The added value of q-commerce is that the delivery of products to the customer is expected to take a maximum of half an hour, and for some companies – even up to 10 minutes after placing an online order. Q-commerce can include a range of foodservice outlets and stores – from food, to chemicals and small household products. To use quick companies, all you have to do is use a mobile app and make an online payment. So it’s a service that combines the benefits of e-commerce with innovations that enable even greater shopper convenience.
In the beginning, q-commerce was based on deliveries from already existing stores – so for example. The well-known and popular Glovo was created. A courier buys individual products or places an order with a cashier and delivers it to the customer. At the moment, the Spanish company is testing its own 24-hour open “supermarket” in Barcelona (the so-called. SuperGlovo), from which deliveries will be made – the so-called dark store.
Both big players and completely new startups, which have found a niche on the market, are investing in q-commerce. Żabka, the aforementioned convieniece chain with almost 8,000 stores, founded its own startup, which test-created the Jush app that guarantees 15-minute delivery and is already present in several Polish cities. To support q-commerce, Żabka creates its own network of dark stores. Similarly, startups such as Jokr, DoorDash or Instacart, whose suppliers flood the streets and dark stories occupy premises in city centers around the world.
Of course, you have to remember that this is a service for a specific profile of customers – mobile, higher income earners, with little time available. What is important here is the right selection of SKUs and the guaranteed fulfillment of the promise of fast delivery.
Customer experience is king
At a time when it is difficult to fight for customers with prices and promotions, the real battlefield becomes the fight for the best customer experience in contact with our business. Customer experience (also known as CX) is defined by the interactions and experiences a customer has with a company throughout the customer journey, from initial contact to becoming a happy and loyal customer.
The best motivator to invest in CX is the profit it will bring. Temkin Group research shows that companies with $1 billion in annual revenues can gain up to $700 million over three years by investing in customer experience. To take it to a more human level, 86% of customers are willing to pay more for a better shopping experience.
In the grocery industry, 63% of customers, say convenience while shopping is important to them, and 66% are willing to pay more, for better service. That’s what 61% of fashion shoppers and 59% of electronic.
Good CX has many faces, both in the digital zone and in-store experience. Customers expect convenient service in every channel, and this is where we see a shift in omnichannel strategies that many companies have been implementing for several years. Adobe shows that companies that invest heavily in cross-channel customer engagement enjoy 10% year-over-year growth, 10% higher average order value, and 25% better conversion rates.
In this whole puzzle, the customer experience on mobile devices, which is where their lives are now, is a priority. 57% of internet users say they would not recommend a company with a poorly designed mobile site. And as many as 85% of adults believe that a company’s website viewed on a mobile device should be as good as or better than a website viewed on a desktop computer. In addition, mobile applications, which despite the greater challenges in terms of their creation and acquisition of users, allow you to engage them better and keep them for longer.
It is important to remember that a good customer experience is developed early in the creation of a product or service. Experts in this field are able to identify customer pain points, where opportunities exist, and what channels can be created to best serve the customer.