• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » True Omnichannel Model Eludes 80 Percent of Retailers, Study Says

True Omnichannel Model Eludes 80 Percent of Retailers, Study Says

September 18, 2015
HRC Advisory

The finding is part of HRC's latest retail industry study, which found that expensive online returns, cannibalization of in-store sales and outdated systems are some of the challenges restraining retailers.

“Today’s consumer is driven by an ‘I want it now’ mentality, yet many retailers are still struggling to deliver,” said Farla Efros, president of HRC Advisory. “Competing with pure-play e-commerce retailers, and accommodating the multitude of new fulfillment options, requires a significant increase in supply chain flexibility and better integration between the physical store and e-commerce network,” she added. “Without these changes, traditional retailers will not be able to execute a truly customer-centric model.”

The study found that retailers are struggling with the following key challenges:

Online returns are expensive. 95% of retailers said their biggest issue in transforming the supply chain was how to mitigate online returns, which can run as high as 30% and are quite costly to a retailer. 85% of retailers noted the high cost of online returns to a store, particularly when the item is not carried in that store. And when returning to a fulfillment center or supplier, retailers incur incremental freight costs, the possibility of shipping-related product damage, as well as a lost opportunity for a replacement sale in-store.

Cannibalization of in-store sales. 75% of the retailers surveyed said that some of their e-commerce sales are cannibalizing sales that would have otherwise been in stores. And, although e-commerce sales growth rates are often 10% to 15% greater than physical store growth rates, 70% of retailers are still struggling to develop a profitable economic business model for e-commerce while maintaining acceptable profitability for stores.

Systems and infrastructure are outdated. All of the retailers surveyed felt that fully integrating inventory and fulfillment between the online and physical store channels would achieve the most effective customer outcome and the lowest margin risk. But more than half (52%) admitted that they do not have the systems in place to provide the required visibility to inventory in each store. Further, retailers lack the necessary processes to compete with their e-commerce-only counterparts, as only 35% of those surveyed had online capabilities such as vendor drop ship, or order in-store and deliver to the customer. The good news is that 60% of the retailers surveyed have plans to invest further in their e-commerce-related systems to provide an improved customer experience.

Key Additional Findings:

80% of the retailers surveyed identified inventory visibility and accurate assortment planning between online and physical channels to be the top-two challenges in enabling fulfillment capabilities.

Only 53% of retailers are currently able to present customers with accurate inventory information and to fulfill the entire order at the time of online purchase.

Only half of the retailers are able to ensure fulfillment from the closest location when an item is available in multiple locations and distribution centers.

More than half (55%) of the retailers continue to have dedicated fulfillment facilities for each channel. Only 25% of these retailers are launching initiatives to combine these facilities in order to serve both channels more cost-effectively and optimize their working capital investments in inventory.

in today’s environment and how they are addressing the challenges being faced. 65% of the companies were publicly traded, and 35% were privately owned.

Source: HRC Advisory

RELATED CONTENT

RELATED VIDEOS

Logistics Technology Order Fulfillment Retail
KEYWORDS HRC Advisory Logistics logistics IT multichannel retailing online fulfillment online sales order fulfillment Retail Retail Supply Chain Management supply chain IT Supply Chain Management: Retail Technology
  • Related Articles

    For Retailers, 2015 Must Be the Year of Omnichannel Commitment, Study Says

    Less Than 10 Percent of Retailers Use RFID, Study Says

    Ninety-one Percent of Retailers Don't Effectively Use Consumer Data to Create Omnichannel Shopping Capability

HRC Advisory

Ninety-one Percent of Retailers Don't Effectively Use Consumer Data to Create Omnichannel Shopping Capability

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: Vaccine Spat Boosts Support for Brexit; India Bans Remdesivir Export

    Coronavirus
  • Semiconductor

    Why Shortages of a $1 Chip Sparked a Global Economic Crisis

    Coronavirus
  • U.S. Manufacturing

    How COVID-19 Will Cause Permanent Changes in Manufacturing Strategies

    Coronavirus
  • Retailers Seen Closing Thousands of Stores

    Retailers Seen Closing Thousands of Stores Even After Pandemic

    Coronavirus
  • Shipping Costs

    Higher Shipping Costs Are Here to Stay, Sparking Price Increases

    Coronavirus

Digital Edition

Scb feb 2021 lg

2021 Supply Chain Management Resource Guide

VIEW THE LATEST ISSUE

Case Studies

  • Remote Implementation: A Dose of the Right Medicine for B2B Pharmacy

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

Visit Our Sponsors

Yang Ming 6 River Systems ArcBest
Armada aThingz BluJay
Burris Logistics DSC Logistics DCSA (Digital Container Shipping Association)
DHL Resilience360 Flash Global Genpact
Geodis GEP GreyOrange
Honeywell Corporate Honeywell Intelligrated Infor
Inmar Kibo Commerce Kinaxis
Logility Magnitude Software MPO
Old Dominion Oliver Wight OpenSky
Paccurate Ports America Purolator
QAD Precision Red Classic Riskmethods
S&H Systems Snapfulfil TGW Systems
Tradepoint Atlantic Transportation Insights Watson Land Company
Westfalia Technologies Workjam
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2021 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing