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Brick-and-Mortar or E-Commerce: Current Trends in U.S. Retail

The COVID-19 crisis led to sudden and drastic changes in consumer behavior, as consumers turned to e-commerce at record rates. As a result, companies that had previously relied on brick-and-mortar sales were forced to develop their e-commerce platforms and enhance consumers’ digital experience in order to survive. This meant changes in not only systems and processes but also supply chain infrastructures.

Delivery companies were the most impacted by this shift, as they adapted their freight networks to meet the new demand. From Quarter 2 of 2020 to Quarter 1 of 2021, brick-and-mortar retailers increased e-commerce sales by a staggering 57% over the previous year. The increased delivery demand combined with various Covid-related complications such shortage of delivery and related personnel have pushed retailers to come up with creative ways to continue supporting this surge.

Below are trends that will continue to develop as the pandemic and other factors continue to influence our buying habits.

Digital Differentiation and Omnichannel

With the pandemic taking the volume of digital interactions to unprecedented levels, retailers are pushed to enhance their “digital storefront” to continue meeting consumer expectations. This includes an omnichannel experience such as purchasing products online and picking them up in-store for free.

AI and AR

With the help of AI, retailers are now able to provide sophisticated levels of personalization, enabling them to offer products and services in real time based on consumers’ preferences. Augmented Reality (AR) also allows consumers to “try-on” products virtually before making a purchase.

Subscription Models and Direct-to-Consumer (DTC) Channel

The World Wide Web has made it much easier and faster for companies to reach consumers directly. It also gives them valuable consumer data to build much deeper relationships. By offering subscription models, companies are able to cut out the middleman, minimize churn, and maintain a healthy and predictable revenue stream.

Supply Chain Resiliency

Widespread disruption during the pandemic exposed inefficiencies in the supply chain ecosystem, leading retailers to realize how ill-equipped they were to anticipate and meet consumer demand amid unprecedented times. To react more quickly to consumers’ needs will require greater resiliency and agility. This includes sourcing from local producers to on-demand manufacturing.

Planning for the Future

There is limited data to predict what’s ahead, especially given that retailers’ total sales for the year won't be available till Q1 2022. Additionally, surges due to COVID-19 variants bring more uncertainty to predictions about consumer behavior.

While it’s essential to gather data from quarters 3 and 4 of 2021 and to monitor ongoing COVID-19 conditions, which trends will permanently shape the future remains an open question. One thing is certain: e-commerce will continue to grow rapidly and retailers that want to remain competitive will need to address all of these trends.

For questions about these trends or how your business can best respond to shifting demands, contact our team. ClearFreight is a global logistics expert and we are ready to help your business create a custom logistics solution to best meet your team’s needs.

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