Chairman and COO of avalaraa cloud-based compliance solutions provider that helps businesses of all sizes achieve the right tax compliance.
In the early days of the Covid-19 pandemic, traditional retailing almost came to a standstill. Uncertainty loomed as retailers scrambled to optimize their businesses for e-commerce and deal with evolving supply chain pressures. To say the least, retailers have gone through a lifetime of changes over the past two years. All those changes have prompted many to reinvent themselves and create activities fit for a digital, omnichannel world.
Today, the reality for most retailers looks very different from two years ago. E-commerce growth has normalized and in-person shopping has seen a resurgence. In fact, NRF predicts that all types of retail sales will grow between: 6% and 8% in 2022, possibly up to $4.86 trillion. The pandemic-driven adoption of e-commerce has cemented the place of online shopping in consumers’ hearts because of its convenience. However, that same demand for convenience is now pushing retailers to offer multi-channel delivery options and shopping experiences so consumers can shop when they want, where they want.
All of these changes combined are contributing to the great revival of retail in the post-pandemic era. So, as retailers reinvent their business for our ever-active, omnichannel world, what barriers stand in the way?
1. Competition for talent
Like most industries, the retail industry is in the midst of a major battle for talent. Last year, a study found that: 94% of retailers struggled to fill empty positions. Retailers not only compete with their competitors for talent, but they also compete with companies outside of retail in today’s tight job market.
The impact is magnified by the growing need for talent within retail as retailers embrace omnichannel strategies. Now, retailers not only need employees in the store, but they are also looking for people to support e-commerce operations. From distribution to customer service, retailers need talent to grow an ever-expanding omnichannel business.
2. Supply Chain Disruptions
From congestion at major ports to rail delays, retail supply chains have been devastated in recent years. While omnichannel offers retailers opportunities to buy from new or expanded supply chains, it also magnifies the potential impact that supply chain delays can have on a business.
Further, while no retailer is immune to supply chain disruptions, many smaller retailers are in even bigger trouble. According to a recent survey of small and medium-sized retailers, 91% believe that larger companies have advantages when it comes to sourcing inventory. From switching suppliers to increasing shipping costs and time, retailers face supply chain disruptions that change daily.
3. Complexity between channels
Perhaps one of the biggest challenges of omnichannel retail is the form of complexity, which increases with each added channel. Much of the complexity of omnichannel can be found at checkout and in the backend technology infrastructure.
Where many retailers previously only sold through a handful of channels, they now have potentially dozens of channels to manage. The exponential growth of sales channels puts extra pressure on backend systems to keep business processes in sync. Everything from inventory management to customer support needs to be connected to the various systems that power each sales channel.
Likewise, when a new channel is added, complexity is likely to impact retailers in the checkout process. For example, if a retailer who previously sold primarily in brick-and-mortar stores now sells through online marketplaces, there are a host of new shipping and tax requirements to comply with. For example, the VAT laws in 45 US States require remote sellers to collect and pay sales tax based on where the customer lives. Tax requirements can quickly become complex.
What must we do
So what can retailers do to avoid these barriers to the great retail restart? Much of the answer lies in technology and automation. Technology can help retailers increase efficiency, allowing employees to focus on high-value tasks and connect the systems that power every channel in the business.
Ultimately, the rise of omnichannel commerce has provided retailers with an opportunity to reinvent their business. As with any opportunity, it comes with challenges that must be solved in order to succeed. Investing in technology can help retailers address and improve key aspects of their business, including talent acquisition, supply chain relationships, and other critical requirements such as shipping and tax.