Heading into 2023, brands and retailers are navigating an economy in flux, the unrelenting bullwhip effect of supply chain setbacks, and evolving consumer demands for optionality and choice.
Still, ecommerce spending alone will top $1 trillion in the US alone this year, and merchants across the industry have the opportunity to drive volume and capture consumer interest.
Instead of making “predictions” for the year ahead, here are five considerations brands and retailers should account for in 2023.
1. Fulfillment fuels the customer loyalty loop
Customer acquisition costs have risen dramatically in recent years, making retention and repurchase crucial to a brand’s bottom line. In fact, 67% of businesses are currently focused on retaining current customers over acquiring new ones, per research from Twilio.
The customer experience is key to building brand loyalty, and when it comes to ecommerce, a shopper’s first interaction with a product is often the moment it arrives at their front door.
The ability to ensure reliable, timely fulfillment becomes essential in reinforcing the customer’s decision to shop with a brand – whether or not they will repurchase, whether or not they will subscribe to your offering, or whether or not they will churn out in favor of a competitor because they had a poor experience.
Repurchase rate is a key performance indicator for Proper Wild, a brand of energy supplements with a focus on clean and simple ingredients. The company recognizes that its ability to provide a seamless fulfillment offering, consistent across sales channels, is fundamental to ensuring regular repurchase, a key performance indicator for the brand.
“A technology-first fulfillment partner is essential to ensuring customers receive products promptly and consistently, no matter the sales channel,” – Vincent Bradley, CEO and co-founder, Proper Wild.
2. Customer demands for convenience and optionality necessitate open, omnichannel platforms
While consumer expectations have changed, legacy logistics operations have been slow to adapt, leaving brands and retailers to contend with systems and processes not built for the modern omnichannel business.
Today’s merchants are in need of open platforms and technologies that enable quick, seamless integration of sales channels and partners, including DTC storefronts, online marketplaces, brick and mortar retail, emerging social commerce channels, and beyond.
Open platforms empower brands to better access and activate insights and data that build value across the business, centralizing visibility into inventory, orders, and fulfillment activity across channels and locations, all in one place.
As we recently shared with Multichannel Merchant, open platforms and technologies that offer connectivity and visibility will power brands’ success and scale, even in the midst of dynamic events.
3. Social commerce is the evolution of social advertising and an increasingly important channel for sales and engagement
Social commerce, expected to see $1.2T in spend by 2025, is poised to become the preferred channel of commerce for consumers and sellers alike. Social commerce shortens the path to purchase, simplifying product discovery and checkout and offering brands the opportunity to drive immediately measureable transactions at the moment of exposure. However, until platforms can ensure a consistent, reliable customer experience — including quick and efficient product delivery — the promise of social commerce is yet unrealized.
Recent research from Digiday and Flowspace found that nearly half of brand marketers would need more confidence in their fulfillment capabilities, including features like integrated inventory and order management, two-day or less delivery offerings, and one-click checkout, in order to shift more focus to social commerce.
An effective fulfillment partner will help blend the digital and physical experience, providing real-time visibility into the physical requirements of selling through social, including real-time visibility into inventory, orders, and operations that enable brands to provide the fast and convenient product delivery that consumers expect.
4. Retail media networks connect the dots between media impressions and transactions, delivering value for consumers and advertisers alike
Forrester predicts revenue from retail media initiatives in the US will double from 2021 to 2024 as retailers increasingly activate advertising platforms across networked commerce channels.
Target’s Roundel, Kroger Precision Marketing, and Walgreens Advertising Group are examples of retail media networks, as is Mirakl Ads, a network encompassing more than 300 retail marketplaces. Bolstered by rich fulfillment data, retail media enables brands and their advertising partners to layer on inventory information for improved targeting and order data to measure conversions.
Retail media networks will transform the advertising value chain with end-to-end optimization, creating a model that informs brand’s strategies to win intent, purchase, and customer loyalty.
5. Omnichannel fulfillment means fulfillment from anywhere – including BOPIS, BOPA, and SFS.
As consumers revert to pre-pandemic shopping behaviors, transactions are increasingly crossing chasm between online and offline. While ecommerce continues to grow as a percentage of total retail, Forrester anticipates that a majority of total retail sales will occur in stores, and shoppers will increasingly ramp up use of cross-channel shopping methods such as buying online for in-store pickup.
A physical retail presence, be it standalone physical stores, wholesale partnerships, and/or shop-in-shop locations is imperative for brands that hope to achieve sustainable profitability, necessitating capabilities that enable cross-channel capabilities like buy online pick up in store (BOPIS), buy online pick up anywhere (BOPA), and ship from store (SFS).
It remains to be seen how these considerations will impact retail in 2023, but one thing is certain – Flowspace can help enable the capabilities you need to succeed. Get in touch with a fulfillment consultant today to find out more.