July 17, 2024

Mckerrinkelly

Inspired By Shop

What Sets Leading Retailers Apart: Navigating Unified Commerce

5 min read

When I was in high school running track, I always wanted to see where my competition ranked to compare what I was doing and improve. That is harder to accomplish in specialty retail. That’s what Manhattan Associates, Google Cloud, and Zebra Technologies sought to give the retail community with their 2023 Unified Commerce Benchmark for Specialty Retail.

These technology providers hired research analyst firm Incisiv to measure specialty retail’s unified commerce capabilities through a combination of in-store and digital shopping journeys. Incisiv’s team visited 124 retailers, interacted with staff, spoke to their call centers, and made actual purchases and returns. The methodology is unique as they did five online visits during different parts of the day and three physical store purchases and returns.

Let’s step back. What is unified commerce?

Unified commerce is like having one big store that sells goods in many ways. You can buy merchandise there from a retailer’s online or physical store, and it’s all connected. That way, a product you purchase can be visible throughout all the ways it is sold. You might remember my podcast with Michael Zakkour, who defined unified commerce as “the complete integration of online, offline technology, logistics, and entertainment for an entirely new value chain for makers, sellers, and buyers.”

For example, if you order something online, you can pick it up in the store instead of having it shipped to your house, and it all works together seamlessly. This is a significant shift from retail sales being siloed into physical stores, catalog sales, online, etc.

And it is being driven by the younger generation who want to buy whatever, whenever, and however they want. 

The benchmark showcases how retailers can and why they need to conduct business anywhere, anytime, as if you never stopped talking to the shopper, from one platform to the next. That way, each time you continue that conversation, you pick up exactly where you left off. What can this lead to? The Benchmark revealed that embracing a Unified Commerce model can drive strong business growth, high revenue opportunity, lead to competitive advantage, and heightened customer loyalty that every retailer covets. With the right technology and solutions, they can outperform their peers by as much as 6X.

👉 You can download the full report here 👈

 How were these 124 retailers measured? Over 286 customer experience capabilities were tested across four areas: Search & Discovery, Cart & Checkout, Promising & Fulfillment, and Service & Support.

This is not a numbered list of retailers, but those adopting many of the keys to unified commerce have been named Leaders. And let’s face it; it is a challenge to integrate digital and physical experiences – even as the younger generation demands it.

Ann Ruckstuhl, CMO at Manhattan Associates, is passionate about sustainable digital transformation and talked to me about the Benchmark. “When a consumer opts in to let a retailer know they are in the store or online, they become the commerce of just one, rather than one of the masses.” That way, personalizing shopping habits, offers, and other options become seamless, delivering on the experience that shoppers have come to expect. 

And think about what this opens for associates. They don’t have to do any digging; they have full transparency and can say, “I can ship it to you from another store because I don’t have it. Or I can have it sent directly to you from one of our fulfillment centers. And if you go over a hundred dollars more, you get that 25% discount.” When done right, this is what it means to delight your customers.

When asked how this benchmark would work for any retailer, Ruckstuhl answered, “This will be a game changer for many people. It’s literally like a strength test against 286 tests. So, it’s a bench press. It’s sit-ups, it’s arm lifts. It’s like, all right, you ready? Are you ready for Ironman?”

One of the areas I spoke to Ruckstuhl about was sustainability and profitability. Was that possible within this framework?

Give Customers Choices

She replied, “You should give environmentally conscious customers choices, so if they wait an extra day, they can get all their merchandise in one shipment, so less packaging and fewer trips on the roads.” She provided a case study where Giant Eagle reduced empty miles by 8% through optimized delivery schedules, improved cubing by 7%, and filled available capacity with backhauls improving load utilization and lowering inbound costs. Annual fuel bills going down is a good objective, but fewer trips and fewer packages are also better for the environment.

Have Order Transparency

Having shoppers know what is happening around their orders is a dividing line. 92% of retail leaders can promise accurate delivery, while the laggards can provide accuracy just 18% of the time. The determining factor here is communication with the customer. 

 

Here are Three Key Takeaways from the Unified Commerce Benchmark:

  1. Digital-Physical Unification:
    1. – A fundamental reset is needed to tie digital and physical experiences together as table stakes for large and small retailers.
    2. A specialty retailer currently rated a Challenger would stand to gain +$40M per billion dollars in annual revenue by improving its Unified Commerce maturity to a Leader.
  2. Seamless Customer Experiences:
    1. The importance of creating a seamless experience across channels and touchpoints
    2. Leaders excel in offering frictionless customer journeys. It was interesting that digitally native vertical brands (DNVB) born online, selling, and shipping their product, are missing from the Leaders category in such areas as advanced personalization and order modifications.
  3. Differentiating Experiences:
    1. – Offering unique experiences through personalization, advanced filtering online, and a unified store basket allows retailers to stand out from competitors. Only 20% of the retailers studied provided personalized product recommendations and offers.
    2. Leaders excel in providing differentiating experiences, while Laggards fail to offer distinct experiences, thus impacting their performance. 

A new way of shopping is changing how stores work.

The 2023 Unified Commerce Benchmark for Specialty Retail is an industry-first for specialty stores, showing real purchases, returns, and shopping experiences for customers online and in person.

Looking for a starting point among so many data points can be overwhelming. Don’t let it be.

Start by addressing the number one friction point for shoppers: checkout. According to the Benchmark, 40% of shoppers believe that checkout is where retailers should focus on improving in-store shopping.

Only 15% of the retailers studied provided the option to change fulfillment method post-order confirmation.

On average, only 27% of the retailers provided the ability to return store purchases online. 41% of shoppers find the refund and return process very time-consuming, so make sure the easy things like a clear phone number, email, and chat option are not hidden and customer convenience is a priority to strengthen brand loyalty.

Leaders are empowering store associates with new ways to see customer purchases but also 72% of leaders are offering in-store appointments scheduled through the brands’ website or app. This does not require much money but adds to the customer experience.

The 2023 Unified Commerce Benchmark for Specialty Retail isn’t a ranking of best brands but a comprehensive document workhorse to help any retailer discover what their customers are using and craving.

Download your copy and discover in what areas you excel and some new opportunities.

 

This was paid partnership with Manhattan Associates.

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