The payment card network says the platform will provide retailers with another way to acquire customers.
75% say all inventory is available for all channels, but only 22% have broken down silos between store and online teams.
There is an upheaval going on in many retail organizations as they see more of their growth coming from the web and less from bricks-and-mortar stores.
The urgency to adapt to this change comes through clearly in a study of more than 500 leading North American retailers by Boston Retail Partners, a retail consulting firm. The study found that 93% of respondents are working toward unifying their operations so that they can serve customers in a consistent way whether they shop in physical stores, on web sites or via mobile devices. But not one of the retail companies claims to have fully unified its operations, and only 22% say they had merged their channel teams into a single organization.
While many retailers say they are hopeful that the realignments will succeed, “it is early in the transition,” says the report, “2014 Annual Supply Chain Benchmark Survey,” authored by Brian Brunk, Ken Morris and Walter Deacon. “None of the organizations surveyed are completely satisfied with the organizational changes made thus far to deliver a more seamless shopping experience,” they write. “While the long-term benefits to bottom-line profits and customer satisfaction are significant, implementing a unified commerce model is a big task for retailers and it will not be achieved overnight.”
But it’s a task retailers cannot ignore because they see a growing shift to consumers shopping more online. In this year’s survey 32% of respondents say they expect most of their growth to come from the web while 21% say most growth will come from bricks-and-mortar stores. Last year, 52% said stores and only 23% e-commerce.
Not surprisingly, more than 80% of respondents say they are expanding their online capabilities. “Online is no longer a strategy to expand the sales channel; it’s now part of a broad cohesive experience where mobile, online and in-store all support and reinforce the brand promise through seamless and flawless execution,” the report says.
The report highlighted several steps retailers are taking to accomplish that goal. They include:
- 85% of retailers surveyed this year say they can allocate inventory from one channel to fulfill orders in another channel; last year, only 32% said they could do so.
- 74% say their organizations have or plan to change the metrics they use to measure their effectiveness in supporting unified cross-channel commerce. The report says traditional supply chain metrics, such as freight cost as a percentage of sales and warehouse processing time, fail to take into account new goals, such as a store being able to fill an online order or accept the return of an item purchased via the web.
- Nearly 30% of respondents are transitioning from software hosted in traditional data centers to managed hosting by vendors of current applications and adding new software from vendors that offer “software as a service,” in which the retailer accesses the software via a web connection.
In fact, many retailers are dissatisfied with their current software. Asked about their top supply chain pain points, 16.9% cited the effectiveness of current software tools, followed by actionable data and analytical tools (15.6%), supply chain talent and recruiting (9.1%), clear corporate supply chain strategy (9.1%), compressed lead times and dates (9.1%), and communication/collaboration with trading partners (9.1%).
The survey found nearly half of respondents, 46%, use spreadsheets to analyze options, instead of more specialized tools, such as business intelligence software and product information management systems.
It also revealed that many retailers are better at letting customers know about available inventory than in informing their own personnel. While 40% of retailers say they can let customers know whether an item is available in a store, only 20% say that same information is available internally. When it comes to inventory held in a fulfillment center, 27% say they can provide that information to customers but only 18% say it is visible within the company.
Of the survey respondents, 86% operate in more than one channel, 7% exclusively operate bricks-and-mortar stores and 7% only sell online.