Omnichannel has become the buzzword of the moment for retail supply chains.
Recently, four hundred retail CEOs were surveyed by PwC, for a study commissioned by JDA Software. The survey is titled “Retail’s New Imperative: Supply Chain Optimization as a Growth Strategy.” The study revealed a large number of these retail CEOs reporting that their supply chains were not optimized to support the new omnichannel.
When Ultriva was at the Netsuite SuiteWorld convention in May this year, NetSuite rolled out seamless omnichannel software, with frequent suggestions and hints that if without such technology adoption in the business model, competitors would soar past the laggards.
Omnichannel can be loosely described as multiple shopping avenues for consumers. No longer will a simple brick and mortar store do. This customer driven demand puts heightened pressure on a supply chain.
This retail report made headlines in the supply chain blogosphere for the number of companies not optimized for online shopping. Eighty-three percent of CEOs believe their supply chains are not optimized to meet omnichannel demands. Further analysis of the CEO remarks said that plans for growing revenue included expansion into new markets, opening more stores, and growth through mergers and acquisitions. This traditional, way of thinking suggests that these CEOs fail to put omnichannel in the future strategy putting the long-term health of their business enterprise in peril, echoing NetSuite’s sentiments.
The percentage of respondents who believed their supply chain was optimized for omnichannel improved among the top 250 companies. Those larger organizations, geared for multi-faceted retailing to the end-user customer have already made changes to the supply chain; they are active, reactive, and reaping the benefits.
One company quoted in the study was Footlocker. Ken Hicks, President and CEO of Foot Locker, said “We’re making it (supply chain) more responsive and faster. We are looking at new ideas and new ways to distribute goods, not just to get them to the store, but also to the customer.”
Further data analysis reveals a disconnection between retailers’ plans to expand into new markets to drive opportunities and failure to realize the importance of supply chain optimization in helping to drive profitable growth. Two-thirds of respondents did not see a connection between the two, noted Hicks.
With margins growing razor thin, supply chain professionals must take a comprehensive, omnichannel look at their supply chain to reduce inventory, costs, and streamline productivity. The best way to do that is with supply chain management software that enables execution on actionable items. It may start with a demand driving portal or a supplier portal. It must be real-time, online 24/7, and take all inventory issues into consideration whether purchase in-person at a brick and mortar location or online at 3am. In the words of Thomas “Fats” Waller, “Find out what they like, and how they like it, and let ‘em have it just their way.”