ao link
Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
You are in: > Home > Views > Guest Comment

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

GUEST COMMENT Online retail can’t rest on its lockdown laurels

Linked InTwitterFacebookeCard
Image: Fotolia
Image: Fotolia
Sharelines

GUEST COMMENT Online retail can’t rest on its lockdown laurels

Dr Mona Bitar, EY UK & Ireland Consumer Leader
Dr Mona Bitar, EY UK & Ireland Consumer Leader

Online retail has remained resilient during an otherwise challenging trading period, with pandemic restrictions prompting consumer demand to shift rapidly online. Retailers have seen online growth accelerate but as we emerge from lockdown and consumers head back to physical stores, official figures show that online sales have started to slow. Retailers can’t take online growth for granted and must continue innovating if they want to succeed post-pandemic.

 

Consumer growing frustrated with online shopping channels

It’s clear that the digital shopping experience could still do with some improvement. Our research has found that consumers are growing weary of certain aspects of online shopping. According to the most recent EY Future Consumer Index, half of consumers are frustrated with expensive deliveries, 28% by slow deliveries and 25% by not being able to find what they are looking for easily.

 

These frustrations are particularly evident in the grocery sector where almost half (49%) of consumers say they don’t shop online because they have less control over purchases, and just over one in 10 (11%) believe grocery websites are better than physical stores

 

Retailers must acknowledge and address these challenges. They need to continue investing in technology and infrastructure, as well as ensuring mobile optimisation – in nearly all shopping categories, 40% of consumers say they use smartphones or tablets to browse or shop online. They should also continue seeking logistics and fulfilment solutions to reduce last-mile friction.

 

The retailers who do this successfully will be able to reap the rewards. The Index found that across all categories, 38% of consumers plan to shop more online for products previously bought in store. This rises to 56% for the cosmetics category and 59% for clothing and footwear.

 

Mixing and matching in-store and online

While retailers should prioritise investment in ecommerce, those with physical operations will need to do this in the context of an omnichannel strategy. Online sales growth will likely be tempered by reduced physical sales so channel integration has never been more vitally important. A truly integrated approach, rather than parallel business models, will enable retailers to avoid splitting their capital and overall investment activity, and reduce the risk of lower productivity.

 

The balance of store and online will continue to be important as consumers mix and match their shopping across different channels. For example, 28% of consumers say they will order online and pick up in store more often.

 

This mixing and matching trend is also evident in consumer research and browsing habits, although this varies depending on product category. Forty-eight per cent of beauty and cosmetics consumers who buy online will have browsed in store first versus 38% who buy in store and browse online first. For technology, 65% of consumers who buy in store have researched online first, versus 35% who buy online after having researched in store first.

 

Retailers could consider repurposing store layouts by investing in digital and fulfilment capabilities to better meet these demands and facilitate omnichannel experiences.

 

Providing expert sales advice

In some product categories, consumers say they still value expert sales advice and want to handle the product prior to purchase. For example, 49% of UK technology consumers are looking for feedback or advice from sales staff before they buy and 51% want to touch and feel the product before purchasing. For clothing, 66% of consumers prefer to touch and feel before buying. These categories could stagnate online if retailers do not continue to innovate.

 

Longer term, the online experience needs to be enriched with easy access to expert advice so that retailers can replicate the in-store benefits of physical engagement with both products and staff. Fashion retailers have started to respond to this trend by offering online stylist advice. Technology retailers could look at offering similar services such as video demonstrations and calls to help customers choose the right product, while FMCG retailers could consider creating new sampling programmes to facilitate trial of products at home.

 

Enhanced customer experience

More widely, retailers’ online channels must focus on increased engagement with their customer base. They need to offer more than just the static portals of the past and instead interact with consumers, following in the way of social media platforms. Consumer demand is growing in this area, with 55% of consumers saying they are willing share personal data for a completely tailored online experience. This is a critical and fundamental element of digital transformation that will enable online retail to increase trust and brand loyalty.

 

Price and private label

But above customer service, consumers have indicated that pricing remains king. More than three in five consumers said price is their most important criteria when making a purchase and 52% say they will be more aware and cautious about their spending. This has led to less brand loyalty and a greater willingness to shift to store brands or private labels than previously, with 20% of consumers switching brands to reduce costs. Retailers and consumer goods companies need to have the right range at the right price to take advantage of category growth.

 

As a result, private label could become a key growth area for retailers. This is particularly evident in the grocery, and health and personal care categories, with 66% of consumers considering purchasing a home and household care store brand and 53% considering buying a personal care store brand. Retailers should be investing in their private label brands and ensure adequate promotion through online channels.

 

No longer business as usual

As longer-term confidence returns, retailers need to improve all aspects of their online offer and ensure they satisfy customer demands. Post-pandemic, online retail should not be business as usual. Retailers must continue to innovate and evolve as consumer expectations rise, competition intensifies and the economics of omnichannel operations change.

Author:

 

Dr Mona Bitar, EY UK & Ireland Consumer Leader

Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.

The InternetRetailing Newsletter

A curated update containing news analysis, reports, podcasts and opinion - completely free and delivered three times weekly

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter