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Retailers struggling to meet customer expectations during COVID-19

New reports reveal that during the COVID-19 pandemic, traditional omnichannel retailers are offering a better online shopping experience than pure play online only retailers, however all retailers are struggling to meet customer expectations.

The study, conducted by Manhattan Associates, investigated Australian shopping habits during this time.

The researchers found that more than 70% of Australian shoppers have shopped online since COVID-19 restrictions came into place, and more than half said they are shopping online more than they did prior to the restrictions.

Furthermore, 41% of respondents said they had a better experience shopping online with omnichannel retailers, while 31% said the experience was better with pure play retailers.

This indicates that omnichannel retailers are successfully addressing challenges arising from COVID-19 lockdowns and are reaching customers.

On the customer experience, Manhattan Associates managing director Raghav Sibal says, “While the common assumption is that pure play retailers will create better online experiences for shoppers because that is their single focus, our research shows this is not always the case."

He says, “It is positive to see that while traditional omnichannel retailers are facing hardships due to reduced in store shopping or having to close their retail stores entirely during COVID-19, they are rising to the online shopping challenge and coming out on top.

“It’s likely this is the case because they own and control their entire inventory, and even if they don’t always have 100% visibility of the inventory, they can be confident it is in their own warehouse or stores. Whereas pure play retailers don’t often have this luxury because they rely on third party suppliers - many of which might be located offshore.”

However, across the board retailers can up their game when it comes to meeting customer expectations, the study finds. Specifically, retailers have been caught off guard and are struggling to anticipate and fulfill orders.

A major online shopping shortcoming highlighted by the consumer research was that 40% of omnichannel and 31% of pure play online retailers had been out of stock of the items consumers wanted to purchase.

Another frustration of online shoppers was slower than indicated shipping and delivery, with 28% of respondents saying this was the case for omnichannel and 29% for pure play retailers.

A further complaint was that 27% of omnichannel and 18% of pure play retailers had a limited product range available online.

Sibal says, “While retail companies have invested a lot of time and money into their online platforms, the spike in activity caused by COVID-19 has highlighted areas for improvement.

“This research shows that retailers - both omnichannel and pure play - have been caught off guard by this impossible to anticipate surge in online orders, and faced unnecessary bottlenecks and delays in their supply chain because they don’t have the systems in place that offer the necessary flexibility and scalability to rapidly respond.”

Sibal says this is a significant opportunity for retailers to forge strong relationships with customers, but they must make investments in the supply chain and improve customer experience.

He says, “As eCommerce has continued to rise in popularity, retailers have put a lot of effort into competing to attract online shoppers. And due to COVID-19 many may have got what they wished for in attracting new online customers who had previously not shopped online with them.

“However, if retailers haven’t made investments in the supply chain that ensure a seamless shopping experience that reflects the experience shoppers previously had in store or online prior to COVID-19, it’s clear that consumer expectations won’t be met.

"And we know that when their expectations aren’t met, shoppers are unlikely to show loyalty and retailers risk losing sales and driving customers to rival businesses.”

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