Executive Briefings

Only 5 Percent of Retail Industry Has Fully Executed an Omnichannel Strategy, Survey Finds

Very few companies - a mere five percent - believe they are "advanced" when it comes to omnichannel capabilities, and between 35 percent and 40 percent believe they're lagging, according to the third annual Retail Insight report from SPS Commerce.

Across the board, the research findings confirm the cross-functional challenges retailers, suppliers and logistics firms face as they build omnichannel capabilities into their operations. The report also underscores the critical role fulfillment excellence plays in meeting consumer expectations for rapid delivery and flexible returns.

“This survey clearly lays out the fundamental reshaping of the business processes and technology required in today’s retail environment,” said Peter Zaballos, vice president of marketing and product at SPS Commerce, a player in retail cloud services. “The report underscores the complex challenge of developing omnichannel retail success, while also affirming the future direction of the retail industry.”

The study revealed the following about the retail industry:

• Retailers and suppliers feel significant pressure from rising consumer expectations, with 75 percent of retailers experiencing increased demand for more rapid fulfillment and 44 percent of suppliers reporting greater demand for more robust item information.

• Very few companies (11 percent) are ready for cross-channel fulfillment, but retailers are more likely (18 percent) to report mobile commerce readiness.

• More than half (52 percent) of retailers and suppliers are too distracted to prioritize and focus on their omnichannel strategies.

• Forty-three percent of retailers report their legacy systems hold them back from omnichannel progress.

• Fully a quarter of retailers have made the transition to store-based fulfillment of online orders but expect this to decline over the next three years to balance shipping costs.

“Omnichannel is about profitably building the next generation of consumer experience, and execution is apparently harder than the ecosystem expected it to be,” said Paula Rosenblum, managing partner at Retail Systems Research (RSR). “Retailers, suppliers and logistics providers need to move quickly to satisfy a consumer who has a seemingly endless array of choices and not a lot of patience. While everyone is heads-down, particularly in figuring out the supply chain side of the omnichannel equation, no one should lose sight of the consumer.”

The complimentary Retail Insight: Fulfilling Consumer Demand report is available for download from SPS Commerce.

Source: SPS Commerce

Across the board, the research findings confirm the cross-functional challenges retailers, suppliers and logistics firms face as they build omnichannel capabilities into their operations. The report also underscores the critical role fulfillment excellence plays in meeting consumer expectations for rapid delivery and flexible returns.

“This survey clearly lays out the fundamental reshaping of the business processes and technology required in today’s retail environment,” said Peter Zaballos, vice president of marketing and product at SPS Commerce, a player in retail cloud services. “The report underscores the complex challenge of developing omnichannel retail success, while also affirming the future direction of the retail industry.”

The study revealed the following about the retail industry:

• Retailers and suppliers feel significant pressure from rising consumer expectations, with 75 percent of retailers experiencing increased demand for more rapid fulfillment and 44 percent of suppliers reporting greater demand for more robust item information.

• Very few companies (11 percent) are ready for cross-channel fulfillment, but retailers are more likely (18 percent) to report mobile commerce readiness.

• More than half (52 percent) of retailers and suppliers are too distracted to prioritize and focus on their omnichannel strategies.

• Forty-three percent of retailers report their legacy systems hold them back from omnichannel progress.

• Fully a quarter of retailers have made the transition to store-based fulfillment of online orders but expect this to decline over the next three years to balance shipping costs.

“Omnichannel is about profitably building the next generation of consumer experience, and execution is apparently harder than the ecosystem expected it to be,” said Paula Rosenblum, managing partner at Retail Systems Research (RSR). “Retailers, suppliers and logistics providers need to move quickly to satisfy a consumer who has a seemingly endless array of choices and not a lot of patience. While everyone is heads-down, particularly in figuring out the supply chain side of the omnichannel equation, no one should lose sight of the consumer.”

The complimentary Retail Insight: Fulfilling Consumer Demand report is available for download from SPS Commerce.

Source: SPS Commerce