A recent study commissioned by Asendia, conducted by Savanta in February 2023, has revealed key insights into how retail is evolving and the steps companies are taking to meet the needs of today’s shoppers. The study surveyed not only 8,000 consumers (see part 1 ), but also 800 international retailers and brands from the fields of e-commerce, IT and logistics in the USA, Great Britain, Canada, Germany, France, Switzerland, Hong Kong and Spain.
The research shows that buyer behavior has changed fundamentally in recent years and is shaped by various factors such as the corona pandemic, increased living costs, environmental concerns and a loss of trust in traditional institutions. Retailers are aware of these changes and have realized that they need to adapt their strategies to meet changing demands.
The results of the study show that two-thirds of retailers are seeing a change in their customer base, with a growing proportion of international shoppers. 73% of respondents confirm that international demand is growing faster than domestic demand .
On the other hand, retailers are finding that spending, order volume, basket size, and shopper confidence are decreasing. Retailers indicated that customers were making purchases less frequently and that order volumes were also falling. 72% observe that buyers have become more cautious in their purchasing decisions.
The study shows that shipping speed, cost and distribution channel influence the buying process. 77% of retailers report increasing demand for next-day delivery. In addition, conversions via social distribution channels (75%) and demand for same-day delivery (73%) are increasing. 71% of retailers face increasing demand for free shipping, even if delivery time is longer.
Reactions to the changed customer behavior:
75% of retailers say it has become more difficult to track customers across channels. Some retailers have identified a need to expand their carrier network (29%), focus on increasing efficiency (27%) or expand their sales channels to Web3/Metaverse (27%) . Additionally, 24% of retailers plan to use their store network as a fulfillment hub or dark store, while 22% are looking for ways to reduce costs. Some retailers also expect procurement costs to increase (20%).
Sustainability is becoming increasingly important:
81% of retailers say demand for more sustainable fulfillment is growing and 79% report increasing demand for a more sustainable product offering. In addition, 71% believe that customers are willing to be less price sensitive for sustainable products or services.
Retailers already focus on sustainability:
An impressive 93% of retailers already offer zero-emission shipping . In addition, 90% of retailers have made a commitment to reduce the amount of non- recyclable packaging used in shipping. In addition, 67% of retailers already offer carbon neutral delivery. However, these are the mean values. A bit startlingly, however, the study shows that there are big differences between the markets – and unfortunately Germany is at the bottom with the UK: in the UK the proportion of retailers who have already implemented sustainable measures is 57%, while in Germany it is 58 % are.Hong Kong, on the other hand, leads with the highest score of 89%.
The focus on sustainability will continue to increase over the next two years. An impressive 81% of retailers surveyed say they will increase their sustainability efforts. However, the focus in the markets will also vary greatly in the future. Hong Kong leads with the highest score of 92%, while Germany has the lowest score at 65%.
Retailers have a clear list of priorities for the next few years. For about a third of retailers, reducing operating costs is the top priority. They also want to make returns processing more efficient and initiate sustainability programs. Expanding the technical environment and collaborating between departments through automation are also on the agenda. Another important concern is to eliminate staff shortages.
Returns are and remain the biggest problem worldwide:
29% of respondents would like to reduce the number of returns, while 57% believe that the volume of returns will continue to increase. This desire is easy to understand given the associated costs and lost sales: in 2022, goods worth 816 billion US dollars were returned in the USA alone. Tom Enright, VP of Retail Supply Chain at Gartner, points out that this total is the combined retail sales of Walmart, Amazon and Costco.