The trend was already there, of course, but the move to ecommerce versus brick & mortar stores greatly accelerated during the virus pandemic, with many saying the change in shopping habits saw the changes in one year equal what would have taken 5-10 without COVID-19.
Indeed, many retailers only survived the pandemic and forced store closures from ecommerce-related sales, whether for home delivery or processes such as curbside pick-up.
Supply Chain Digest Says...
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| Somewhat contradictorily, the authors end the piece by arguing “Ecommerce success depends on the last mile” – not exactly news in an Amazon Prime world. |
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Writing on the Harvard Business Review’s web site, consultants Kathy Gramling, Jeff Orschell, and Joshua Chernoff of Ernst & Young note that the firm’s research recently found that 60% of consumers are currently visiting brick-and-mortar stores less than before the pandemic, and 43% shop more often on-line for products they would have previously bought in stores. No surprises there.
They also note this has all made geographical location become far less relevant to shopping behavior – consumers can purchase and have delivered virtually every product that is available.
The three writers note that US retailers made approximately $10 billion in ecommerce investments, acquisitions and partnerships just from May to July 2020, spanning logistics capabilities to enable last-mile deliveries, asset-light approaches like ghost kitchens (restaurants with a space for kitchen equipment and facilities, but no dining area for walk-in customers) and dark stores (former stores turned into distribution points). Also receiving lot of investment were digital capabilities in AI and blockchain.
For some retailers, this ecommerce acceleration has “spurred a great reset of the way they think about consumers’ needs and the future of digital commerce,” the authors say.
And it’s all about customer experience.
“The core question retailers must ask themselves first is not, ‘What ecommerce investments do I need to make?’ but rather, ‘What consumer experience do I need to offer?’” the authors say.
They added that consumer experience is rapidly evolving from one that’s built upon the transactional process of in-store shopping to one base on deep, on-going and enriching relationships.
“As a retailer, you need to create an interwoven journey that’s relevant to your target consumer - and structure your channel ecosystem, ecommerce included, in a way that provides value along that journey,” the authors add.
Sounds interesting – but what does it really mean?
(See More Below)
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 It starts with an assumption that many areas of brick & mortar retailers will remain strong. “The desire for post-pandemic social interaction will likely drive people back to stores,” the EY consultants predict.
“In order to offer consumers the journey they need, retailers must understand the future of experience-led capabilities,” the trio say, adding that “Ecommerce is a key piece of that future. But it’s not just about being on-line - it’s about doing it right.”
The article poses a series of questions retailers need to answer to drive better management of that customer journey. Examples include: “Do I have an agile, adaptive technology platform that understands that every consumer journey is different?,” How can I be price-competitive and still maintain margin?,” and “How do I orchestrate the consumer journey from digital to physical and back again?,” among others.
Somewhat contradictorily, the authors end the piece by arguing “Ecommerce success depends on the last mile” – not exactly news in an Amazon Prime world. “Delivery becomes a cornerstone of the [consumer] experience,” the authors state, making a rather obvious point.
The authors see good potential for store-based fulfillment, such as curbside or in-store pick-up, but warn those options for consumers “can quickly lose their luster if consumers endure long wait times in a jammed-up parking lot, or if their local store inventory can’t accommodate their online purchases.”
SCDigest will ask this: Can retailers really create “stronger deeper relationships with their customers” in an on-line world? That remains a question that has yet to be answered.
The full column on HBR.org can be found here: How E-Commerce Fits into Retail’s Post-Pandemic Future
What do you think EYs recommendations for retailers? Let us know your thoughts at the Feedback section below.
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