The 2021 ISG Provider Lens Retail Software and Services Report for the U.S. finds the way goods are bought and delivered is changing rapidly in the country. More than three-quarters of retail outlets now allow customers to buy products online and pick them up in stores, while 58 percent of retailers provide curbside pickup, up from 4 percent in 2019, the report notes.
E-commerce in 2021 is expected to contribute about a fifth of overall retail revenue, up from 12 percent in 2019. The ISG report sees retailers embracing new customer-focused website improvements, with visual search features, digital stylists and chatbot recommendations. Social networking has also become a direct commerce channel, with in-app checkout on some Instagram posts.
In addition, store locations and layouts are changing as retailers reduce their large-format mall footprints (ISG says 25 percent of existing malls are expected to close by 2022) and focus on high-tech experience centers and pop-up shops. Low-volume and dark stores are also becoming micro-fulfillment centers, the report says, with some converted to no-inventory locations to facilitate the return of merchandise purchased online.
Retailers are facing a lack of visibility into supplier inventory, and an inability to accurately forecast local consumer demand and employee absenteeism caused by illness or staggered work arrangements, the report says. The retailers that performed well during the pandemic were the ones that had their merchandise planning and management systems integrated with their supply chain systems, the report adds.