2022 Will Mark Retail’s Permanent Evolution to Omnichannel Operations

Expect to see a permanent evolution of brick-and-mortar retail omnichannel shopping in 2022. This milestone will effect retailers and shoppers alike.

Consumer in-store spending is down, inflation is skyrocketing, and several other factors that developed under the pandemic are contributing to a sea change in retail operations.

Low inventory levels caused by supply chain shortages are creating leaner, more efficient stores. Capital investment in supply chain technologies will be a determining factor in who wins or loses; and store closures and downsizing of footprints have proven wise for some retailers, according to Jeff Pielusko, director at Carl Marks Advisors.

Retailers, however, have three strategies that will bolster their survival chances through worsening economic conditions. Smart retailers who can marry lean operations, optimize their use of in-store technology, and plug in a robust e-commerce platform, will help store owners redefine the purpose of their brick-and-mortar locations.

The pandemic caused the e-commerce industry to rapidly adapt to high growth. Savvy brick-and-mortar retailers pivoted to reach their customers in a digital environment without their typical in-store interactions, noted Diaz Nesamoney, founder and CEO of Jivox, a digital marketing technology software provider. This forestalled having to shutter or go elsewhere.

“This has forced all brands to step up their digital marketing campaigns and stand out from the crowded landscape to attract consumers,” he told The E-Commerce Times.

Market watchers expect the situation to stabilize somewhat, added Pielusko. But shoppers’ discretionary spending will be sorely challenged by rapidly rising prices and continuing supply chain shortages.

“I think there is definitely some short-term pain. But it was inevitable what happened. We just saw it truncated into 12 to 18 months rather than what could have been five to 10 years,” Pielusko told The E-Commerce Times.

Redefining Storefronts

The role of the brick-and-mortar store has definitely been redefined, he continued. A slew of previously online-only brands have already built physical locations with their e-commerce platform in mind.

Traditional brick-and-mortar retailers with an e-commerce presence are going to have to start gravitating toward rethinking store locations that provide inventory to people who want to shop in person. But it is also your new fulfillment center.

The new definition is a place to shop and to experience the brand but maybe does not carry all the inventory you would expect people to see on the shelves. Instead, it might be in the back ready to ship, explained Pielusko.

Tied in with new retail definitions will be a shift in how physical stores mimic some of the backroom tools on which online retailers rely, suggested Nesamoney.

“In 2022, more brands will be adopting customer data platforms (CDPs) to organize their data, streamline marketing and ad campaigns, and ensure personalized messaging is delivered to the right customers at the right time,” he predicted.

Technology’s Shifting Role

Both physical and digital retailers will also have to adopt new strategies for the technology they use. Before Google announced removing third-party cookies from website tracking, many e-commerce brands relied on vendor data or outsourcing a significant portion of their marketing efforts to agencies.

“With Google now abolishing cookies, brands are forced to look from within and utilize the data themselves that they collected,” Nesamoney said.

Technology has become increasingly ingrained in everyday life. The barriers to entry for retailers have come down. A lot of services are available to retailers to avoid their having to build their own platforms.

“They can use things like Amazon for businesses and reach consumers on an e-commerce platform without having to necessarily build out all the infrastructure to support it,” Pielusko added.

Brick and mortar store operators will have to acclimate to using e-commerce tools such as CRM software and remote cashless payment systems, he suggested. That will be a necessary part of establishing a workable omnichannel operation.

Omnichannel Becomes Unified Marketing Outlet

As the pandemic restrictions loosened, many saw an end to the gains online shopping made. Current trends show that is not happening. If anything, inflationary spiraling is feeding the e-commerce frenzy.

According to a recent report from the U.S. Census Bureau, e-commerce increased 11 percent from the previous year in 2020 alone. Sales are projected to surpass $1 trillion this year, noted Nesamoney.

“While the pandemic may have expedited this adoption, the likelihood of e-commerce disappearing in the near future is almost nonexistent,” he offered.

Having said that, e-commerce is continuing to evolve. For example, brands are realizing the power of retail media offerings from the likes of Walmart, Amazon, and Target as ways to reach consumers in data-rich environments, he added.

Brands that have not already done so will need to adopt a strong one-to-one personalization strategy. They will also need a deep understanding of the omnichannel environment to stay relevant and reach customers where they are.

Innovative marketing technologies like artificial intelligence and machine learning must be used to accomplish this both at scale and at a consistent level with consumer demand, according to Nesamoney.

Omnichannel marketing is now vital for in-store retailers, according to Pielusko. People are slowly starting to realize that brick-and-mortar locations are not going away.

Having an omnichannel presence online helps brands better understand the customer journey and tailor personalized messaging accordingly. To do this well, e-commerce marketing technologies need to have robust identity mechanisms. That enables them to utilize first-party data, which is key to enabling consumer engagement across channels, Nesamoney explained.

More Than a Storefront

Physical stores must evolve to offer more choices to more customers.

In addition to serving the local in-store customer base, brick and mortars should focus on sales from those who would not normally shop online. That is where a physical retailer’s e-commerce platform comes into the shopping picture.

That approach connects with the notion of stores becoming more than just a place to shop. Turn them into retail marketing hubs where customers arrive to pick up products that they order online. Local stores can also serve as fulfillment centers that help shorten delivery times for customers.

“E-commerce and brick and mortar locations are really complementary,” Pielusko said.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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