Manhattan Associates: Consumer wallets require retail and store recalibration.
Hybrid commerce and sustainability are revolutionizing the role of the traditional store, according to Manhattan Associates’ latest consumer research, Recalibrating for the Next Normal. Many financial and retail analysts argue that the next twelve months will be more challenging than expected. 2023 promises to be a year full of challenges for retailers and consumers, especially as the line between physical and digital commerce is becoming increasingly blurred and complex.
Manhattan Associates’ Recalibrating for the Next Normal report
In its report Manhattan Associates, a tech company that operates in the supply chain sector and omnichannel commerce, outlined three key areas in which brands will have to operate incisively to be successful in the new year. Let’s find out together what they are.
A look at current trends
Consumers, especially those belonging to Generation Z, buy a brand’s products only if it is aligned with their vision. In fact, rather than buying on a whim, this group of consumers prefer to support brands that reflect their values. 75% of Italian consumers involved in the Manhattan Associates research said that initiatives in favor of the environment and sustainability were an important or primary factor in deciding which brand to shop from. Italian retailers have different professional goals for next year, but creating a more sustainable and environmentally conscious supply chain is second on their list with 30%; preceded by customer service solutions (37%), in first place. The addition of precise delivery dates per delivery option (29%) occupies the third step of the local ranking.
“If in the last decade the traditional store has been considered above all as a real showcase, the conception of the physical store has been revolutionized with the arrival of the pandemic. Today, retailers are reevaluating the role of their stores, recognizing their added value as strategic hubs for online sales and as a fulfillment center for click & collect, returns, endless aisle and same day delivery and more. While digitization and frictionless shopping were certainly two major players in the pandemic period, the data shows we shouldn’t be too quick to downplay the importance of human interactions or the role the physical store will play in the age of digital commerce ” commented Sebastien Lefebure, Managing Director France & Southern Europe of Manhattan Associates.
One view of everything, everywhere
Today, consumers expect to make purchases according to their needs: 84% of Italian respondents believe that the home delivery service is the most important when purchasing online; also followed by 46% who want delivery the next day, and by 34% who prefer the click and collect service. This finding highlights how important it is for retailers to offer consumers the choice of delivery options and how much better stock management is needed. “Having an overview of your stock, while delivering on your promises to customers, has become much more complicated in an increasingly hybrid retail landscape,” continued Lefebure.
Less than half of Italian retailers offer the option of purchasing in-store and returning online (35%), or purchasing online and returning in-store (40%). And only 14% plan to interconnect their online and in-store businesses. Interestingly, only 4% of Italian retailers believe they have an accurate view of their stock which involves all their activity (in-store and online) on an ongoing basis. These data clearly highlight a divergence between the capabilities of retailers and the demands of consumers, increasingly demanding for the hybrid shopping experience.
The global retail sector is now accustomed to facing all kinds of disruptions. The last decade has witnessed epochal structural changes, such as the transition to the digital age, the pandemic which has pushed billions of people towards a more digital world and, more recently, the economic pressure on consumers which has further altered purchase. The unpredictable macroeconomic factors and the typical challenges of the sector are imposing a period of evolution and renewal on brandswhile the spaces dedicated to physical and digital retail merge into a single reality.
“With most retailers reporting that they have a level of interconnection between their online and in-store functions, the most important work ahead, certainly in the immediate future given global economic pressures, will be to find new ways to do physical and online presence coexist. As the retail sector prepares to face the challenges foreseen for 2023, the ability to manage the most disruptive situations, adapting the physical and digital customer experience, will become a fundamental element: the technologies that allow retailers to manage orders in stores and online in an agile, sustainable and profitable way will no longer be seen as a ‘benefit’, but rather as a necessity”, concluded Lefebure. You can download the full Recalibrating for the Next Normal report on the official Manhattan Associates page.