The Needs of Omnichannel Retail &

Impact on Manufacturing -
ET2C International Inc

Consumer 2.0
The​ Millennial and Gen Z consumers​ continue to shift the expectation on retailers and
brands. This evolution is enabled by technology and driven by an almost capricious
approach to purchasing products. Buying decisions are no longer solely made based on
the product, if at all, but rather on experience (78% of Millenials prefer to spend on
experience over product) and online reviews. The rise of influencers and Key Opinion
Leaders (“KOLs”) further underlines the importance of peer reviews. As an example,
and perhaps extreme, Becky Li, who has a mere 7.5m followers sold 100 minis (as in
the car) in 5 minutes.

The pace of change is fast

These ‘consumers’ are looking at their devices more than 30 times per hour. Retailers
and brands are therefore looking at a broad range of touch points to capture their
attention, which notably is no more than 8 seconds. What is important to these
consumers has evolved to the extent the traditional retail model is now largely defunct.
This has given rise to a focus on areas such as customer experience, peer influence,
seamless expectations and ​personalisation​.
Retail has changed. Sellers have had to adapt how they connect and engage with their
customers through a multitude of online and offline mediums. As a result, manufacturers
are also having to evolve to best service these changing needs.

Digitalization
The characteristics of omnichannel digitization focus on putting the customer first
through digital mediums. Consumer behavior has driven the necessity for streamlined
and unified systems on both mobile and traditional platforms. The aim of digitization is
to create a flowing process, where the time in a traditional brick-and-mortar store fits
seamlessly together with the user’s experience online. According to one survey, up to
49% of US spending occurs through online platforms and 55% of purchases end on an
e-commerce platform (Mceachran, 2019).
Omnichannel retail will pass much of the retail process to customers, allowing easier
access to comparison shopping, letting customers get the best deal possible in
seconds.
With no signs of this trend slowing down, businesses must adapt to this new
environment by facilitating the integration of the physical and digital world. Imagine a
customer using their phone in a brick-and-mortar store, scanning ​barcodes​ to compare
the many products in stock within the store. Not only will this process decrease the total
time commitment a shopper needs to make deciding on a product, it also allows for the
business to save money on staff as the customer serves themselves.
Artificial intelligence​ is being adopted more frequently within the digital arena to
further enhance the information and foresight companies wield on their customers.

Data
The use of customer data is now an essential part of engaging with customers on an
individual level. Likewise, information from across the supply chain is being used to help
the customer make decisions (for example, some retailers are giving their customer a
choice of which factory to purchase from). Omnichannel marketing allows the collection
of information on customers across multiple interactions that businesses can utilize to
make the shopping experience both more relevant and efficient. A good example of this
is loyalty programs. These allow retailers to not only collect information on every
purchase you make but also develop foresight around what you are going to buy based
on the time of year and stage in your life. Given shortening attention spans, putting
relevant products in front of the consumer is increasingly the only way to create that all
important sales opportunity.

Customization
90% of consumers now value individualized products, of which ​25% are willing to pay
a premium for their unique products​. Brands are looking for ways to ​personalize the
experience​ for their customers and being able to produce and deliver individual
products forms a part of this. Technology has been at the forefront of this capability with
manufacturers investing in some level of automation and robotics to be able to deliver
personalized products. Some of the large sports brands have harnessed additive
printing technology (3D Printing) to even print shoes tailored to your actual foot size.
As this need grows, there are also opportunities for retailers to create efficiencies within
their supply chain. Through modern technology and omnichannel customer experience,
clothing can be manufactured to order. Instead of mass producing a product and
holding it in inventory, products are created as and when the customer demands them.
The process of customization should ultimately lower costs for businesses and ​reduce
waste on​ the manufacturing floor.

Sustainability
Conscious consumerism also increasingly forms part of this modern buying decision.
The younger generations now have access to information about the products, suppliers
and even in some instances who is actually making each product. Radical supply chain
transparency is on the rise with large brands committing to publish all their suppliers
online. ​Alternative materials​ that are more environmentally friendly because of
biodegradability are being looked for as part of companies’ sourcing function. Recycled
material (in the past has often had perhaps negative quality connotations) is now
becoming mainstream to limit the impact of the product on waste.
Omnichannel marketing also allows for businesses to reduce the amount of waste
generated through mass production
This is a direct consequence of the level of engagement that omnichannel
retailing has enabled. From a manufacturing perspective, omnichannel retail has
already proven itself by eliminating tons of wasted materials in traditionally
wasteful industries like clothing manufacturing (Hodgkinson, 2018). This is in part
via ​automation​ and customization processes but further waste can be reduced
through demand planning. A tool which allows for businesses to more accurately
track demand for products, either by seasons, trends, or other elements. This
allows companies to optimize their purchases and supply chain to meet demand,
reducing wasted resources and lowering their carbon footprint.

Conclusion
The world of retail is in a disruptive state. The Millennial and Gen Z consumers are
more fickle than ever. Brands and retailers are having to engage with them through a
variety of mediums to ensure that their offer is both relevant and timely. As retail has to
evolve, the back end and the supply base has to likewise adapt. ​Asian manufacturing
has taken up this challenge​. China has committed to ​Smart Manufacturing by 2025​ and
India​ has similarly identified technological innovations in manufacturing as an important
component of ​economic growth​.
Omnichannel retail has become a necessity in order to capture the consumers’
attention. The aim is to spike the interest of the consumer within that 8 second time
frame. It is not a lot of time; less than that of the often referenced forgetful Goldfish,
which has an attention span of 9 seconds.

ET2C is a sourcing company that understands your needs. For all enquiries on
manufacturing in Asia, customization, radical supply chain transparency
strategies and other topics, please contact us via our website, ​www.et2c.com​.
Original Source:
https://et2c.com/omnichannel-retail-impact-on-manufacturing/