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This article was written by Collette Eccleston and originally appeared in TotalRetail.
According to Commerce Department data released earlier this year, consumers are no longer shopping primarily from the comfort of their couch. In fact, e-commerce stocks have plummeted this year as consumers restrict online spending.
Spurred both by frustrations with online shopping and a desire for a more tactile experience, consumers are returning, at least in some capacity, to in-store shopping. A high-end rug retailer sums it up in The New York Times: “When you open stores, your business gets much stronger in that region because people are passing by and can just walk in.” Customers like to “feel and touch our offerings and get that experience.”
Of course, it’s not as simple as an either/or choice between in-store or online. In Material’s tracking work we’ve learned that the keyword for 2022 and beyond is omnichannel. Consumers still want essentials auto-shipped to their homes, and when they do venture to brick-and-mortar locations, it’s after doing some research online or taking the BOPIS route (buy online, pick up in-store). Shopping habits have become more complicated thanks to digital solutions introduced during the pandemic, and there are heightened expectations for brands to deliver consistently exceptional experiences across channels.
Here are four key insights from our trackers to keep in mind as you strive to create seamless omnichannel experiences:
In-Person Shopping is Making a Comeback
It’s one thing to order cereal and peanut butter online, but it’s impossible to tell whether an avocado is ripe by staring at the screen. While most grocery categories experienced a temporary bump in online sales at the peak of the pandemic, in 2022 e-commerce in categories such as fresh and frozen foods is continuing the overall decline which begun in early 2020.
Our trackers confirm that while COVID temporarily disrupted shopping habits for categories like adult apparel and shoes — where omnichannel has increasingly become the norm — online shopping just can’t compete with the practical and tactile benefits of the in-person experience.
High Advertising Costs Are Accelerating Omnichannel Trends
Omnichannel is also becoming increasingly important in the beauty and home improvement categories. You may be in the habit of automatically re-ordering a particular beauty product every month, for example, but might visit the store to sample new items.
The shift to omnichannel is being accelerated by ad costs: new privacy features from Google and Apple (which enable users to block ad tracking) have made it harder for advertisers to target consumers online. The costs of acquiring customers through internet and social media advertising have soared and are expected to climb through 2023.
Some brands are opting instead for the old school way of finding new customers. Short-term leases are becoming more common as landlords seek to fill empty lots and brands explore areas with heavy foot traffic.
The Post-Pandemic Impulse Buy is Evolving
Whether a consumer purchases online or in-store also impacts what they buy. At Trader Joe’s, customers pass a very tempting gauntlet of chocolate goodies before checkout, for example. The impulse buy is a potential casualty of online-only shopping, so brands should capitalize on the opportunity to rethink impulse purchases for an omnichannel environment. Brands might even consider partnering products. For example, if a customer regularly orders healthy meals, why not include a sample of a new non-alcoholic drink mixer?
It all comes back to identity, which is more important than ever. With good data, brands can create a stronger and more personalized customer experience. There’s a real opportunity for brands to dig deep and understand habits and preferences so they can effectively reflect consumer identities back to them.
Strong Foundational Relationships Are Increasingly Important
The war in Ukraine is worsening existing supply chain woes, labor shortages continue, and inflation is soaring. The pre-pandemic supply of low-priced and plentiful goods might be over for good. In an uncertain world, reliability is increasingly the holy grail for brands, but it’s crucial that brands are transparent and communicate effectively when they can’t deliver.
One lesson from the pandemic is to expect disruption and to strengthen bonds with consumers. In 2022 and onward, it’s critical to stay abreast of evolving consumer behaviors and market trends in order to understand your audience’s habits and identities, create omnichannel experiences, and delight with personal touches and authentic communication.
