Vogue Business has launched their latest premium report, The Omnichannel Playbook, to provide insights on US retail, store and digital dynamics. Brands with omnichannel capabilities have been able to adapt more easily to the current health crisis and bounce back quicker. Vogue’s report touches on the online-offline interdependency that retailers and consumers have seen throughout these times.
The following key ideas were provided in Vogue’s playbook:
- A rise in e-commerce has caused a significant increase in returns and costs.
- Clothing and shoes are the most returned product categories.
- COVID-19 created a rapid response for omnichannel trends in retail, however these trends would have happened regardless over time.
- The typical department store was on its pathway to restructuring even before the pandemic.
- Putting the focus on appointments and intimate experiences can encourage in-store purchases – 68% of brands already offer appointment options.
- Augmented reality and virtual reality are prime areas for experimentation to help retailers stand out.
- Gen Z and Millennials expressed an interest in using AR and VR while shopping in the future.
Here’s our thoughts:
Picture this – you purchase a $10 product on Amazon, realize you don’t like it and then decide to return it. The seller on Amazon is making some sort of profit on that item. However, the costs of shipping, packaging, and labor to deliver AND return that product quickly adds up. These costs are surely worth more than that inexpensive item you bought online. If you think about it, thousands of consumers are making these types of purchases each day, and these costs are quickly ramping up. Not only that, but the impact on the environment from e-commerce is detrimental enough on its own. According to an article from Vogue — US returns alone create 5 billion pounds of landfill waste and 15 million tons of carbon emissions annually, equivalent to the amount of trash produced by 5 million people in a year.
We’re not the only ones who have noticed the significant increase in returns and costs. Happy Returns, a company dedicated to fixing online return issues, also saw an opportunity within e-commerce logistics. Their one-stop solution allows consumers to come in and visit one of their “return bars” to return their orders from multiple brands all at once. Their process fixes return constraints, while using a brick-and-mortar space to do so.
Retailers experimenting with augmented reality and virtual reality in-store may allow them to stand out and possibly convince shoppers to stray away from online optiona completely. Virtual try-on services and 3D product viewings (whether its online or in-store) can allow consumers to get a better idea of how the product is going to look and feel in-person. This will then result in less returns and added costs.
AR and VR technologies are something that all retailers are going to want to quickly adapt. According to Shopify, 65% of consumers are more willing to make a purchase with 3D product models. We see a future where retail is a critical component to fulfill the tactical need for product experience. AR can potentially expand inventory, while also creating a contactless experience. These technologies can also easily be incorporated into in-store appointments, as Vogue mentioned in their report.
Regardless of COVID-19, retailers were going to need to adopt omnichannel capabilities eventually – whether they wanted to or not. Those who didn’t offer an online solution to customers during the shutdown suffered from a significant decline in sales, resulting in numerous permanent closures around the US. The current pandemic certainly sped up this process for many retailers, making omnichannel a much-needed investment.
In the long-term, omnichannel is a necessary method to survive, especially as technologies continue to evolve. Now, it’s up to retailers to be innovative when it comes to these capabilities, to give customers what they want and enhance the shopping experience they provide.
About Vogue Business
Vogue Business is an online fashion industry publication launched in January 2019. Based in Condé Nast’s London HQ, it offers a truly global perspective on the fashion industry, drawing on insights from our network of journalists and business leaders in 32 markets to empower fashion professionals to make better business decisions. While sharing the Vogue name, Vogue Business is operated as a wholly separate entity with an autonomous editorial team. So while it utilizes the intelligence of Condé Nast teams around the world, its journalism is completely independent.