Calming the Channel Chaos
The state of omnichannel selling and logistics in 2024.
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$448 billion
of sales in North America require both physical and digital channels.
Success for omnichannel retail requires a cohesive strategy across all digital and physical channels.
Key Takeaways
Create a frictionless selling experience
Transcend traditional multichannel approaches by embracing unified commerce to create a seamless experience across all platforms.
Unleash the potential of generative AI
Enhance customer experience and operational efficiency by leveraging AI to create personalized, automated interactions.
Optimize delivery and logistics
Shoppers want enhanced delivery options that includes out-of-home delivery like store lockers, premium shipping, and simple returns.
Embrace hybrid retail
Omnichannel success increasingly requires a physical footprint. With real estate prices and acquisition costs low, 2024 can be a growth year.
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The Evolution of Retail
Be everywhere your customers are.
Consumer Types We Surveyed
Digital Adopters
- An individual who learned to adapt to the digital world as an adult
- Born prior to 1980
- Includes older Millennials, Generation X, Baby Boomers, and older individuals
- May lack experience with newer digital shopping skills
Digital Natives
- An individual born into and raised in a digital world
- Born during or after 1980
- Includes most Millennials, Generation Z, and some younger individuals
- Have relatively high non-food spending power
Businesses vs. Consumers Matchup
| Stage | Business | Digital Adopters | Digital Natives |
|---|---|---|---|
Pre-Purchase |
Roughly half of retailers plan to increase marketing efforts in 2024 | Browse on search engines and marketplaces | As likely to browse on social media as other channels |
Purchase |
Undervalue in-cart options like premium or out-of-home delivery | More likely to purchase from a physical retailer than online | More likely to purchase online than from a physical retailer |
Delivery |
Plan to raise delivery prices | More likely to expect free delivery | More willing to pay for delivery |
Returns |
Typically offer online-initiated returns | Prefer online-initiated returns | Prefer out-of-home returns |
Step 1: Pre-Purchase
Social media drives purchase decisions for digital natives.
37% of digital natives browse for products on social media (compared to 9% of digital adopters), making it an increasingly crucial buying tool for retailers.
Search engines lead buyers to online marketplaces and social media for key product recommendations.
While search engines are the most common place for browsing and price-comparison, online marketplaces like Amazon are a steady second option. However, a strong website experience and social media presence are vital for engaging with many shoppers.
Adopters vs. Natives: Consumers’ preferred channels for product research. Source: Retail Economics, Auctane
Step 2: Purchase
Hybrid retail is essential for ecommerce success.
Customers often browse online for DIY, home furnishings, and health & beauty products despite commonly purchasing them in-store. Conversely, electronics and apparel shoppers tend to browse in-store before making online purchases.
Hybrid Retail generates a “Halo Effect.”
The presence of physical stores in an omnichannel strategy can create a ‘halo effect.’ This significantly boosts online sales for the brand in the store’s surrounding area. Warby Parker, for example, reported a tripling of online sales in areas where they open physical stores—this can be the first step in building new store locations to building new customer bases.
- Buying
- Browsing
Learn more about the growing hybrid retail trend in the full report.
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Step 3: Delivery
Cost and speed complicate retailers' delivery dilemma.
While 55% of shoppers will start browsing elsewhere if free shipping takes longer than two days, only 25% of businesses offer it. In fact, over half of retailers see rising shipping costs as the main threat to business performance.
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To combat rising shipping costs, businesses rely on premium delivery options to entice customers.
34% of retailers plan on increasing shipping costs in 2024 to maintain brand standards and combat rising costs. However, only 6% of all shoppers are willing to pay for two-day delivery. The customers that are willing to pay for premium delivery largely expect next-day or same-day options.
Adopters vs. Natives: When consumers will pay extra for premium delivery ($7-9). Source: Retail Economics, Auctane
Step 4: Returns
Customers want convenient returns.
Digital natives are likely to pay for returns if the process is simple. Simple doesn’t mean self-service, either. Instead, shoppers prefer carrier collection and drop-off locations.
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Shoppers expect flexible return options.
Self-service returns can be confusing for shoppers. Providing out-of-home return options like store drop-offs or having carriers print return labels is more secure and convenient. Additionally, omnichannel retailers that adopt these out-of-home carrier features can also increase customer loyalty.
Consumers vs. Retailers: What do consumers think is the most important element of the delivery experience? Source: Retail Economics, Auctane
Step 5: Post-Purchase
The post-purchase experience leads to repeat customers.
Inconvenient returns and high shipping costs are big risks to your brand loyalty. A better omnichannel post-purchase strategy helps your business automate customer communication and other time-consuming processes.
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AI can improve customer journeys and drive loyalty.
When asked about AI during their buyer journey, shoppers find it most impactful in logistics and last-mile delivery communications (e.g. order and delivery updates, managing returns and exchanges). Utilizing AI at these time-sensitive touchpoints is pivotal for customer satisfaction and driving repeat purchases.
Consumer interest in AI as a part of the shopping experience. Source: Retail Economics, Auctane
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