Last fall, Canadian retail industry statistics showed reason for cautious optimism. In October, retail sales expanded by 1.6 per cent month over month, with subsectors like sporting goods, books, and hobby-related items in particular jumping by nearly 18 per cent.
Then two big events cast cloud over Q4: the floods in British Columbia and the rise of Omicron.
Sales growth in November failed to meet even low expectations of 1.2 per cent month over month, arriving at just 0.7 per cent. Subsectors such as furniture, electronics, and automotive all experienced negative growth. Impacted by supply chain issues, e-commerce sales were also down 3.5 per cent.
It is estimated that retail sales fell over 2 per cent month-over-month in December. With epidemic-related challenges like capacity limits, absenteeism, and lockdowns, the picture for retail continues to look mixed—at least for the short term.
With supply chains bottlenecking again, we can expect to see delayed shipments, higher prices, and less stock. However, retailers who have been ahead of the curve with e-commerce and omnichannel could expect to see a boost in sales, given previous trends during lockdowns.
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It is easy to become discouraged looking at how the pandemic is affecting retail numbers, but Switzerland is showing that growth, albeit small, is still possible.
Traditionally, Switzerland has been slow to embrace e-commerce trends, but the pandemic gave Swiss retailers the push they needed. Retailers invested in improved e-commerce offerings, including technology and more user-friendly websites.
In November 2021, retail sales in Switzerland increased nearly 6 per cent year-on-year and 1.3 per cent on a monthly basis.
While Canada and Switzerland certainly have different challenges, this should serve as motivation for Canadian retailers to be bullish on e-commerce and omnichannel as catalysts for growth during the pandemic.
Digital Solutions
Dynamics 365 Commerce unifies digital, in-store, and back-office operations to create a seamless omnichannel. In 2022, customers want the convenience and flexibility to either buy in-store, pick up in other location, or get home delivery. Retailers can also use Dynamics 365 to create loyalty programs, so customers can earn and redeem points and use gift cards or coupons across channels.
In addition to omnichannel, customers also expect real-time store inventory, so they’re not set up for disappointment as well as same-day delivery when ordering online. But if retailers really want to get ahead of the competition, virtual and augmented reality shopping experiences are the next frontier.
Since the pandemic started, virtual samplings have increased by 32 per cent. For example, Ikea used augmented reality for customers to virtually place products in their homes to see how they looked. Instead of viewing items on a flat 2D screen, customers can get a personalized 360-degree view. As a result, customers who try products virtually are three times likely to buy and spend 10 per cent more.
Contact us to find out how D365 Commerce can enhance, replace, or extend your existing retail or e-tail solution and dramatically increase customer satisfaction and retention.