The Retail Landscape Is Changing in the U.S.: Are You Ready?

The retail landscape is changing—and rapidly. From supply chain shifts to the rise of virtual experiences, every aspect of the retail experience is being transformed.

Is your business ready to navigate this new world of retail? To help you stay up to date, we’ve compiled a few of the changes you should keep an eye on if you want to remain relevant in today’s market.

The Emergence of the Metaverse

The emergence and popularity of the metaverse has begun to change the shopping experience at major retailers. And this influence is expected to grow quickly: by 2030, the metaverse is expected to have a $5 trillion impact, with an estimated $2-2.6 trillion of that specifically in ecommerce. 

A 2022 report from McKinsey stated that the metaverse “has the potential to be the next iteration of the internet,” noting that its appeal spans genders and geographies, and consumers are already spending on digital assets. Like the internet, the metaverse could offer brands a whole new way to grow, reach new customers, and find new ways to reward frequent shoppers.

In the metaverse, brands have the opportunity to market themselves with billboards, larger scale activations, product placement, and immersive experiences, as well as experiment with new product offerings and provide perks and discounts to loyal customers.

Some big-name brands are already running their own metaverse store fronts, including Gucci, Nike, and Forever 21.

Online Sales Remain High vs In-Store Sales

Online sales skyrocketed at the onset of the COVID-19 pandemic, and they remain high. According to McKinsey, e-commerce has a 30 percent higher penetration than in the pre-pandemic market.

These days, an estimated 70% of Americans shop online at least some of the time. 

In-store sales are still growing as well, but at a slower pace than e-commerce. The annual growth rate for in-store sales is about 4%; but for e-commerce, it’s almost 13%.

In this environment, an omnichannel experience with a digital-first strategy is vital. Today’s consumers expect a seamless experience from the website to the brick-and-mortar storefront. This requires a strong fulfilment strategy that supports multiple delivery options and seamlessly blends the best of both physical retail and e-commerce.

New Supply Chain Models 

Today’s consumers expect a higher degree of agility and speed than ever before. As the demand for e-commerce has grown, the tolerance for slow delivery has dwindled. Consumers want a fast, convenient shopping experience.

These higher expectations and increased preference for e-commerce require a different model of fulfillment. For example, some retailers are beginning to use their less productive store space as a fulfillment center, filling e-commerce orders right from the store. This allows them to ship from locations closer to customers, decreasing both delivery time and cost, as well as giving them a competitive advantage.

In short, today’s retail environment requires a supply chain model that serves customers faster and more directly.

The Shift from West Coast to East Coast Ports 

In a similar vein, importers are beginning to shift some of their cargo to east coast ports.

The west coast has long been the default cargo destination for importers, but that is changing. Due to April labor disruptions at the Los Angeles and Long Beach port terminals (the busiest in the U.S.), and in an effort to avoid a repeat of pandemic-era delays, importers are relying more and more on east coast cargo ports. 

Fueled by a desire to avoid risk, this investment in east coast infrastructure will ultimately create more competition for L.A.-Long Beach, leading to greater stability and reliability in the long term.

The Retail Landscape is Changing: Flywheel Sourcing Can Help You Stay Agile

In the midst of these shifts, it’s vital to work with a company like Flywheel Sourcing who can help you navigate these changes (and more) to maintain an agile supply chain.

One move many U.S. companies are making right now is expanding their sourcing options by investing in nearshoring. The goal is to better provide the fast, seamless retail experience consumers are coming to expect. Flywheel Sourcing has made this easy for our clients by opening a sourcing office in Mexico, in addition to our overseas sourcing options.

Contact us to discuss how the changing retail landscape is affecting your business and how Flywheel Sourcing can help you remain agile in the face of change.