Company culture has no doubt shifted towards home-working and virtual communications during 2024, but it is not the only business landscape to have changed. Retail is in a state of flux, too, and it seems that online and in-store channels are growing apart at a greater pace than has been seen before.
As businesses of all kinds adapt to the COVID-19 necessitated ‘new normal’, the trends affecting retail are not quite as predictable as they once might have been. Sales figures are no longer driven solely by price and proximity, and consumers have different priorities than in years gone by.
With these thoughts in mind, it’s important to note that businesses need to take stock of their position when operating via online or in-store channels, or indeed across both. Only by appreciating the market factors in play will it be possible to keep up with the march of progress, and below we consider some of the most significant changes that are affecting cross-channel retail.
Shoppers are super informed
One of the most significant factors driving change in the retail industry is the broad availability of information. It used to be the case that consumers would go into shops with little or no knowledge of products and rely on a sales advisor to help them to select their purchases. These days, shoppers know just as much as salespeople about the products they want to purchase, which means that a sales pitch won’t cut it in modern times.
With the public able to conduct their own research on products, multi-channel retail has become divergent in a number of ways. Firstly, those customers that enter physical stores want the best quality items and almost nothing else. If they’ve made the trip to a shop in person, the chances are that they’ve already been online and done their research. This means that unless you’re at the top of the market for your niche, you need to spend more time and money on enhancing your business’s online presence.
Even if your intention is to push for in-store sales, the process begins far before a customer crosses your threshold and it’s critically important to recognise that sales of all kinds can and do begin online.
Online retailers face a different kind of competition
Similar issues are affecting businesses that focus on eCommerce, yet the challenges that they face are slightly different. When you’re selling online, it’s all too easy for customers to compare your offering with that of your competitors. This means that online competition is heavily driven by price, in a race to the bottom that will usually be won by the retailer willing to go further and faster.
Reputation also remains incredibly important across all channels, but with the advent of sites like Google reviews and Trustpilot, eCommerce businesses must make certain that they’re providing great customer service at every stage of the transactional process. It’s now easier than ever before to find testimonials online, and that means that ecommerce businesses must have a sterling reputation amongst customers if they’re to have any hope of success. Unlike physical retailers, online stores cannot benefit from their proximity to customers since websites are generally equal in terms of accessibility and convenience.
In all, online retailers must focus on customer service, price, and visibility – whilst their physical counterparts are cut a little slack since their proximity to consumers can lead to trade from more organic footfall. In some cases this footfall can even be driven by online searches for local stores, and so it’s not a completely one-sided story despite evidence that physical retail is in decline.
Online and in-store customers have different needs
It’s no longer the case that businesses can expect customers to just come to them – and instead they must make concerted efforts to convince consumers that they are worthy of their money. In practical terms, this means that retailers must provide a well targeted or even personalised service if they are to maintain or grow their sales figures.
For some businesses, this might unfortunately mean that it’s time to move away from traditional high street operations. According to figures provided by the Retail Gazette, some 17.2 million UK consumers are expected to make permanent changes to their shopping habits in favour of eCommerce – representing a huge shift in the way goods are sold. If your customers are predominantly online, it may not be viable to maintain a physical presence at considerable cost when most of your revenues are generated via ecommerce channels.
Despite not requiring such sweeping change, businesses that retain a strong stable of in-store patrons must still make an effort to stay abreast of consumer trends. In supermarkets and convenience stores, for instance, it has widely been reported that customers have progressed from irregular yet larger shopping trips and instead make far more frequent visits to grocery stores to top up what they have at home. It’s noticing these little patterns that can help businesses to stay on top of their game and reach target demographics despite a sliding scale of consumer demands.
Of course, all of this change doesn’t mean that businesses can abandon the basics, and its still important to get the fundamentals right. This includes providing great customer service, managing expectations, and using reliable and secure payment solutions to complete transactions. For physical stores this might mean investing in a contactless Card Machine, such as the one from reputable Merchant Service providers UTP Group.
Supply chains are changing – sort of
For online businesses, supply chains are becoming more sophisticated. From new and improved delivery services to more ethically responsible manufacturers, businesses in 2024 have more supply chain choices than ever before. Outside of the more traditional retail space this has given rise to alternative businesses that make their money from drop shipping and other such practices that ultimately avail sellers of any need to stock the products that they’re marketing.
Similar changes are afoot in the physical retail world too, but they don’t necessarily represent a shake-up of the status quo. With the passing of the Modern Slavery Act 2015, along with complementary amendments to company law, businesses are now subject to reporting requirements that necessitate the creation of ethical policies and efforts to eliminate abuse within the supply chain. Ultimately whilst this doesn’t represent a marked change to the way supply chains are managed, it has required physical retailers to take a more hands-on approach to sourcing and logistics.
Retail risk is different across channels
Fraud is a problem for retailers regardless of how or where they go about their business. For physical outlets, fraud prevention often takes the form of tangible solutions such as CCTV, frontline colleagues, and alarm systems. Whilst these are well-established forms of crime and fraud prevention, online businesses simply cannot rely on them for protection.
Ranging from friendly fraud to DDOS and phishing attacks, the online world is a far more complicated place and businesses can easily catch up in difficult situations. Selling via the internet opens up a whole host of risk and compliance issues for retail businesses, and it’s vital to ensure that proper safeguards are in place to protect employees, consumers and the firm itself from harm. Digital fraud prevention technology, a robust and secure eCommerce payment gateway, and even better webhosting are all tools in the arsenals of safe online businesses.
Ultimately, fraudsters are becoming more sophisticated in line with the retailers they target. To escape unscathed, businesses must take the matter into their own hands and invest in solutions to safeguard their interests and those of their key stakeholders.
The bottom line for retail
Regardless of the changes that are occurring in retail, there’s no excuse for letting standards slip – and businesses have to be careful not to give consumers an excuse to shop elsewhere. The world is changing, and retailers have little option but to move with the times.
As digital weaves its way ever deeper into our lives, there is a growing divide between traditional physical outlets and their online counterparts. To bridge this gap, firms need to focus on their customers and keep providing the products and services that they need, albeit with a modern twist.
