OrderDynamics has announced the findings of its new global research on retail omni-channel services. It covers the US, Canada, UK, Australia, France, Germany and Austria. The report is a follow-up and expansion of the company’s 2017 Omni-1000 Research. Key findings of the research:
- 6% of retailers offer click & collect today
- 8% of BOPIS (buy online, pickup in-store) retailers commit to having orders ready within 24 hours
- 1% of all online merchants provide active inventory visibility
- 6% of omni-channel retailers offer BORIS (Buy Online, Return In-Store).
- 4% of omni-channel merchants have a site optimized for mobile commerce
Other findings include that less than half of retailers provide shoppers with access to basic inventory visibility. Out of the 2,000+ retailers, only 38.1% show basic inventory visibility on product pages. A strict like-for-like, year-over-year comparison found a 30.7% drop in active online inventory visibility. This is a concerning drop in an industry experiencing so much change. Passive inventory visibility is a factor in this drop. Unlike active inventory visibility, a passive approach only signals when a good is out of stock.
The rise of omni-channels
The research indicates that 64% of UK retailers provide click and collect (BOPIS) services. Germany / Austria follows at 50%. Last on our list for in-store pickup options are Canada at 31.0%, and the US at 27.5%.
OrderDynamics’ Omni-2000 research is based on a ‘random-walk’ methodology. Researchers directly assess retailer websites for the presence of omni-channel capabilities. For instance, which retailers offers click and collect / BOPIS services. The random-walk approach means this research did not expressly include or exclude retailers based on predefined market ratios. The initial investigation of over 5,000 merchants across the seven countries, narrowed in on 2,026 with 10 or more stores and a web presence.
From the 2,026 retailers included in the core research, 86.3% have an ecommerce presence. This is a slight 2.5% decline from last year’s observations. However, the sample size has doubled this year. Therefore, the apparent decline should not be taken as an indication that ecommerce is in any way on the decline. It is however, surprising that 13.7% of retailers still do not have an ecommerce presence.
73.9% retailers offer free shipping for a minimum order value. Similar to last year’s results, two peaks exist among retailers around the world. The first peak, is free shipping offered at the $0 – $24 USD threshold. Peak two is at the $50 – $74 USD minimum order threshold.
For the US market specifically, the cost of Amazon Prime increased 20%. The average free shipping threshold for all retailers increased by 14.5% to $63.75 USD.
What appears as a new and growing trend among retailers in the US, is using free shipping (FS) as a special offer. Although the concept is not new, using FS as a strictly promotional offering is observed in the US market.
The report highlighted that only 44.1% of Online Retailers provide active inventory visibility – even just at the basic level of ‘in-stock’ ‘out of-stock’ indicators.
Interestingly, mobile commerce is a strong emerging trend in retail. Currently, only 11.4% of omni-channel retailers have a mobile optimised site.
Over 75.9% of retailers in the Omni-2000 research have mobile responsive websites. That means a customer can use their mobile to access the retailer’s website, and even process orders online. This is a great first step. For many, and perhaps most purposes this may work adequately well. However, the report suggests a responsive website still may not provide the user with an ideal customer experience.
Using social media channels
As yet another emerging retail channel, the Omni-2000 touches on social media selling reviewing Instagram. Retailers across the countries are consistently strong at having a presence on Instagram. 93.2% of omni-channel retailers specifically, have a presence on Instagram. Yet, shopping on this channel is still in its early phase. US is the early adopter of shopping on Instagram with 20.1% of retailers capable of accepting orders. This followed by UK at 15.2% and Canada at 14.9%. Social shopping will inevitably grow in lockstep with m-commerce in the ensuing years.
Across retail’s sub-sectors, BOPIS is most common in electronics 51.7%, department stores 50.5%, and DIY/Auto/Industrial Goods 40.2%. It is least found in the Health/Cosmetics sub-sector with only 22.4% of retailers providing omni-channel services.
72.3% of Do-It-Yourself/Auto/Industrial goods retailers provide in-store pickups. This is followed by Health/Cosmetics at 67.9%. Although health & cosmetics lag at offering the service, when they do provide it they are not shy to tell customers about it, up-front.
Overall, retailers have improved in this category as with a 2.1% improvement year over year (YoY) to 57.1%. Worst of the sectors is the Toy/Hobby/Sporting goods category at 48.1%.
Outside Western Europe, BOPIS is a new retail development. The concept has been around for well over a decade. However, actual in-store operational click & collect – is still a novelty to most regions around the world.
According to Nick McLean, CEO, OrderDynamics, “To increase sales and retain customers, omni-channel retailers need to provide customers with clarity.”
He added, “The Omni-2000 reveals where retailers are strong, and other areas where they are lacking across a variety of metrics. Whether it is low stock visibility or general service awareness about cross-channel fulfilment. These are opportunities to get closer to what drives customer demand. OrderDynamics hopes retailers can use these benchmarks to improve their own businesses.”
What does this mean for retailers?
The more technology advances, the more it’s integrated into our daily lives. For retailers, instead of thinking of a desktop experience. A mobile experience, a tablet experience or an Apple Watch experience. Retailer have to pursue one, holistic approach. An omni-channel experience that customers can use whenever they want.
The report is particularly interesting because it highlights the unstoppable rise of omni-channel in retail. It is impressive that retailers are responding and putting the infrastructure in place to support consumer needs.
Going forward, successful retailers will enable customers to shop online from a desktop or mobile device, or by telephone, or in a bricks and mortar store. Furthermore, the experience would be seamless.