Scaling New Heights? Data Reveals Retailers' Challenges, Opportunities In Scaling Their Businesses

The retail industry is witnessing significant changes in consumer behavior, driven by a desire for increased digital and omnichannel experiences. What hasn’t changed is that consumers’ expectations for secure, frictionless, personalized shopping experiences remains high. These high expectations extend across the purchase journey, from discovery through to post-purchase support. Furthermore, consumers expect that the shopping experience is consistent no matter how and when they choose to interact with a retailer, including both peak and nonpeak seasons.

Given this dynamic, retailers must be able to scale their businesses across channels for both peak and nonpeak periods, meeting customer demand and doing so profitably. While there’s significant opportunity and benefit in doing this effectively — e.g., increased customer satisfaction, sales and profit gains, cost savings — there are also inherent challenges, such as staffing, data, and technology.

To better understand the challenges and opportunities associated with scaling operations for both peak and nonpeak seasons, NAPCO Research, in conjunction with Radial, a leader in e-commerce solutions, recently surveyed 105 retail executives. The survey questions specifically addressed four functional areas related to retailers’ operations: customer care, fraud prevention, logistics, and omnichannel.

The online survey was conducted in July 2021. Respondents represented the following company types: multichannel retailer (58 percent); wholesaler (19 percent); CPG (12 percent); online-only retailer (8 percent); and brick-and-mortar-only retailer (3 percent). The annual revenue for the companies of the respondents ranged from $10 million to less than $25 million, up to $1 billion or greater.

This report features the data from that survey as well as analysis of it. An overarching theme seen throughout the data is that there's a gap between what retailers think and what consumers think when it comes to ease of scaling operations and the impact it has on customer experience. Retailers believe they're doing a good to great job of scaling operations to optimize CX (see chart below), but consumers don't agree with them. For example, many retailers are falling short of meeting customers’ expectations when it comes to things such as timely answers to customer service queries, on-time deliveries, inventory transparency and availability, among other things during the customer journey.