Linnworks research: retailers aim to centralise omnichannel operations in 2022

The Covid-19 pandemic has accelerated retailers’ adoption of new sales channels and investment in omnichannel capabilities is a top budgetary priority in 2022, according to research from Linnworks.

This involved 502 US respondents and 526 UK respondents.

“The Covid-19 pandemic has heightened the urgency for retailers to focus on the customer experience as a key part of their brand,” says Callum Campbell, CEO at Linnworks.

“But this study shows that many companies didn’t have the infrastructure in place to operate in a true multi-channel and omnichannel capacity.”

In terms of online marketplaces, Amazon was at the top of the list with 79% of retailers reporting they began selling on it, followed by Facebook and eBay..

Despite adding new selling channels, only 14% of retailers can manage them from a single platform - most report using four or more tools to manage all their sales channels.

What’s more, they have limited real-time visibility into inventory levels, delivery tracking, and sales metrics across shipping channels. 77% of respondents agreed that having a centralised platform for managing all channels would improve their business performance.

To support the pivot to e-commerce at the start of the pandemic, 83% of respondents said that their company repurposed their physical storefront(s)/retail space to serve as e-commerce fulfilment and distribution facilities.

And for many, the pandemic changed how they use physical space permanently – only 32% have turned the converted space back into storefronts. Now 46% are using their physical sites as showrooms, with a small marketing/customer display space in the front with most space serving as a fulfilment warehouse for e-commerce purchases.

Elsewhere, 39% of retailers say that their supply chain was disrupted by isolated catastrophes in the last 12 months (ie the Suez Canal blockage, winter storms, wildfires, etc), in addition to grappling with the pandemic.

For those who experienced the disruptions, the impact was damaging with 88% of retailers reporting a negative impact to customer service and 76% having lost company revenue.

Almost as many have reported increasing prices as a result. Of those who are still experiencing continued supply chain issues as a result of the pandemic, 42% say the impact is due to labour shortages, followed by supply and demand shocks, reliance on international suppliers, and a nationwide failure to invest in domestic manufacturers.

Because of this, 95% are improving supply chain resiliency is a primary operational objective for their company in 2022.

Over half of those surveyed intend to improve resiliency by focusing on diversifying the location of suppliers and 53% plan to establish inventory buffers with overstock.

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