The biggest challenge facing retailers today is inventory and order management, according to research that highlights it as one of the keys to getting omni-channel right.
Commissioned by technology integrator hybris, a whopping 93% of retailers surveyed said system-wide inventory visibility is seen as “the most significant capability in executing their omni-channel fulfilment strategy.” Yet less than half (45%) are currently able to actually do it, meaning around 50% lagging behind on one of their own key aspirations.
Called “Omni-Channel Retail 2014: Double Trouble”, the research offers an analysis of the “business drivers, opportunities and organisational constraints surrounding retailers’ omni-channel strategies” and points to one of the major likely trends of 2015.
“The undeniable consumer trend towards more complex paths-to-purchase makes the concept of a single ‘selling channel’ increasingly irrelevant”, says Stefan Schmidt, Vice President of Commerce & Cloud Strategy at hybris.
Three of the key findings of the survey were:
- Winners in the retail space design the digital experience with the dual objective of transacting more sales in the digital space and driving more sales in physical stores
- Omni-channel fulfillment has become a top priority for retailers; 53% want to allow customers to purchase, take delivery or return a product through the channel of their choice
- Fulfillment agility requires modifications to operational systems and processes to efficiently support anytime/anywhere consumer shopping expectations
There might not be much there that is earth-shatteringly revelatory. But the driving force for change shouldn’t be underestimated. Customer loyalty still exists, but it is now affected by many more factors than before; the ability to browse, search, transact, and take possession of purchased goods at a time and in a place that suits them is a new customer phenomenon. As it becomes more widely available it will become more generally expected – what was once new and exciting will be considered a commodity, a hygiene factor.
The cost of getting it wrong, by not reading the signs or not making the right investments, has the potential to be just as damaging as getting it right could be rewarding, Schmidt points out.
“Retailers who fail to offer a seamless experience between the digital and physical channels will be at a disadvantage to those that excel in uniting their physical and digital channels and make it easy for customers to purchase products from any channel and via any channel. Therefore, retailers need to enable enterprise-wide processes that ensure they can deliver on customer promises.”
However, as retailers look to expand their merchandising strategies beyond the store and to deliver on the omni-channel fulfillment promise, two key organisational inhibitors risk hampering their efforts; 44% of respondents in the hybris research said they are still unable to integrate inventory and order management across all channels, while 42% still lack a consolidated view of the customer across all channels.
”Aligning and strengthening the supply chain in order to extend the ‘always-on’ mentality across all areas of the shopping experience is the next priority for retailers, who now face a twofold challenge; delivering for the customer and for the business,” commented Nikki Baird, Managing Partner at RSR Research, who delivered the research for hybris.
“As retailers focus on modifying their operational systems and processes to efficiently support anytime/anywhere shopping, gaining an enterprise-wide view of customers and inventory management is central to initiating the operational measures needed to meet consumers’ cross-channel needs and wants.”
Attempts to serve customers equitably across all channels may have started from the standpoint of wanting a single view of the customer, so maybe it’s not surprising customers want a single view of the organisation they buy from – whether it’s the online or physical store, the help and support services, or the shipping and delivery. Keeping pace with customer demands and expectations could be next big battleground of the UK retail sector. Choosing to put all the effort up front to woo the customer without ensuring the business has control and visibility of the orders could be a costly mistake for those that make it.