Omnichannel high on the agenda for c-suiteby
Retailers have placed omnichannel initiatives firmly at the top of their priority lists – but most of them aren’t quite there yet in providing the investment.
New research by Forrester Consulting on behalf of OrderDynamics interviewed 337 decision makers interviewed for a global survey, revealing that despite the space for more investment, the optimisation of cross-channel fulfilment processes are still taking hold.
These processes include pickup in-store, ship-to-store, and ship-from-store. The growing trend of these options has been growing as it also provides retailers with greater in-store traffic.
By marrying the online and offline worlds, retailers have attempted to bring customers back to the store and gives them new opportunities for cross-selling.
Omnichannel adoption rates
Forrester looked at adoption rates for these omnichannel tactics to show the current extent of adoption and in places, their fast growth:
- Ship-from-store: the study found that Europe is ahead of the US in shipping straight from the store with 47% and 26% currently offering this service. It also found that 18% in Europe and 10% in the US planned to offer it soon.
- Pickup-in-store: 23% of retailers have a buy-online, pickup-in-store option, while 20% allow customers to only reserve online and pickup in store. This programme is set to be one of the quickest areas of growth however, with numbers set to triple in the next 12 months.
The report also sees 63% of retailers with physical stores already taking a smarter approach by taking advantage of their store assets like inventory, shipping cost efficiencies and reduced delivery channels – this was the primary driver for investing in omnichannel initiatives.
Any form of transition to this form of leverage was already reduced – 35% of online orders were already being fulfilled, or expected to be fulfilled, from their retail stores.
Attention from the c-suite
The trend is receiving a further boost by gaining attention from the c-suite. The study says: “…at many of the retailers we surveyed the CEO, CIO, COO and CMO are all taking an active role in defining their firm’s omnichannel strategy and prioritizing explicit programs that will serve to connect the cross channel purchase journey their customers now expect.”
Some organisations have even gone as far as to instil responsibility for Omni-Channel practices to a specific c-level role:
- 39% of retailers have created a dedicated executive or c-level role to lead and coordinate omnichannel initiatives.
- 34% of retailers have their CEO leading omnichannel initiatives
- 9% of retailers have already re-aligned their online and offline departments to become an omnichannel organisation with a single profit and loss report.
Forrester also completed in-depth interviews with retail executives who talked about a range of challenges that arise as a result of employing Omni-Channel techniques. One director & general manager at a major US retail chain said:
“The vast majority of our 2,000 stores are enabled for distribution. At the end of the day that is the big advantage we have – we can have the product same-day [or] within minutes – pure plays cannot match that.
“With ship-from-store and store distribution centres we can get the product to customers much faster.”
Order management tech
The study goes on to show a growing need for retail management systems that can support increasingly complex fulfilment programmes, not just standard order automation features.
- 85% of retailers stated a retail order management system would play an important role in the execution of their omnichannel strategy.
- 75% of the retailers surveyed believe an order management system will reduce inventory costs and improve fulfillment efficiencies.
- 63% of retailers are considering SaaS-based order management systems to support their rapidly evolving omnichannel initiatives.
Despite the recognition of omnichannel strategies and how they can be successfully implemented, only 49% have made the investment in order management technology.
However, the figure indicates that growth will continue over the next 12 months as many retailers move beyond considering investment to looking towards implementation.
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