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E-Commerce’s Newest Twist: The Cross-Channel Shopper

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E-commerce has been on the rise for years. And now, for the first time ever, research shows that shoppers prefer to purchase online rather than in stores.

But that hasn’t eliminated businesses’ need for a physical location entirely. In fact, along with the popularity of online shopping, another trend has emerged that is forcing companies to rethink their supply chain and inventory strategies: the cross-channel shopper.


Who is the cross-channel shopper?

Cross-channel shoppers make purchases online but prefer to pick up their orders at a brick-and-mortar location, be it a storefront or distribution center. These shoppers use the internet to research and compare product information and prices, then pick up their purchases soon after, without having to wait — or pay for — delivery.

The appeal for the consumer is obvious.

Nearly two-thirds of Americans go online daily, with one-fifth reporting being online “almost constantly.” When browsing the web, shoppers can quickly and easily find the product they want for the lowest available price within minutes, without having to drive from store to store to comparison shop. And with payment tools like Google Wallet and PayPal, a consumer doesn’t even have to pull out a credit card to complete a transaction.

A day of shopping becomes a few minutes of internet browsing. The time- and cost-savings of avoiding shipping and delivery are just icing on the cake.

What it means for businesses

The convenience of cross-channel shopping has driven demand for this service across verticals. Most major grocery chains offer online order/in-store pick-up options, while big box retailers are watching a growing percentage of business follow this trend. Home Depot, for instance, reports that about 42% of its online orders are being picked up in store.

This requires a major shift in strategy for e-commerce businesses in terms of capital allocation, inventory and warehousing, and supply chains. They must be able to follow the buy-anywhere-fulfill-anywhere model. And that often means disrupting core systems.

When asked what the biggest impact to their supply chains was due to changing customer shopping patterns, leading retailers responded:

  • Speed to customer: Customers’ expectations for faster deliveries have forced companies to source products closer to the point of demand. Inventory management and logistics must evolve to serve cross-channel needs.
  • Unpredictable channel demands: Shoppers using different mediums makes channel-level demand difficult to predict. Integration of digital and retail inventory management systems and cross-channel inventory utilization can help fulfill demand in a timely manner while optimizing inventory levels.  
  • Supply chain costs: Multiple parallel supply chains to serve different channels is not cost-effective. Companies must merge and standardize common functions and processes to reduce labor, asset, and technology costs.

The cross-channel shopper offers a new chapter in the story of the ever-evolving world of e-commerce. But organizations that can adapt inventory and supply chain strategies to accommodate this growing trend can capitalize on the growing segment of customers who prefer to shop this way.

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Topics: cross-channel shopping cross-channel shopper customer demands