Retail Infrastructure Catches Up With Digital Shift

The long-term consequences of the digital shift continue to be quantified and qualified. As evidenced by last week’s PYMNTS’ card on file report, consumers are ready and willing to keep their data with retailers, both online and offline, in exchange for frictionless experiences. The big action has now moved to infrastructure, payments and more behind-the-scenes activity that shows the spike in eCommerce is likely here to stay, even post-pandemic.

The PYMNTS study continues to show that consumer behaviors – not just purchase preferences – are changing. Conducted over a 12-week period, the study found that of the 48.2 percent of consumers who have shifted more of their shopping online, 85.7 percent of them, overall, say they’ll stick with those experiences, with 63.3 percent planning to maintain some of those digital behaviors.

Now companies are aligning for the long-term consequences. Case in point: The most recent jobs report shows that companies that specialize in eCommerce infrastructure added jobs in May. As reported in The Wall Street Journal, “courier and messenger companies that deliver packages to homes and businesses added 12,100 jobs last month, according to seasonally adjusted preliminary employment figures the U.S. Bureau of Labor Statistics released Friday. It was the third straight month of expansion in a sector that has stepped up hiring even as much of the U.S. economy shut down in April and May. Warehousing and storage operators added 8,500 jobs in May after slashing 90,500 jobs in April.”

Another case in point can be seen from Kroger. The grocery giant announced last week that it will open three new fulfillment centers for eCommerce, partnering with infrastructure company Ocado to accelerate its ability to facilitate customer delivery. The centers will incorporate state-of-the-art automation and artificial intelligence (AI), and will be used to expand Kroger products to a larger footprint.

“Kroger and Ocado are building an eCommerce ecosystem across the U.S. that will deliver unrivaled online experiences to more customers, in more ways and in more markets,” said Luke Jensen, CEO of Ocado Solutions. “Spanning a range of automated customer fulfillment center sizes, these three new sites will be key parts of this growing and flexible fulfillment network. Alongside the scale and wider benefits of larger CFCs, smaller-format and mini CFCs will allow Kroger to reach more geographies with Ocado’s automation, while also catering to a wide range of options for delivery.”

More data to support the digital shift is being produced by the day. Many sectors reported triple-digit year-on-year growth in May, according to data from ACI Worldwide. Its analysis showed retail transaction growth of 81 percent in May, compared to 2019. The growth was driven by sportswear and sporting goods (216 percent), retail specific to housewares and DIY supplies (190 percent) and gaming (84 percent).

“The sustained increase in eCommerce transaction volumes reflects a further full month of wide-ranging COVID-19-related restrictions, with consumers opting for online and click-and-collect channels over brick-and-mortar stores,” said ACI in a statement. “However, the easing of lockdown restrictions in many countries is reflected in certain sectors that until now have experienced the biggest boost; gaming purchases were up 126 percent over the previous year in April, compared to 84 percent in May, while electronics were up only 32 percent in the past month after having been up more than 55 percent in April. Sectors that have been most negatively impacted showed a slight recovery in May; travel was down 91 percent in April, while in May [it] improved slightly to 73 percent lower than the same period last year.”