Retailers are omni-channel laggards

By Tom Ryan

OCTOBER 24, 2014

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According to SPS Commerce's third annual Retail Insight industry benchmark report, only five percent of retailers believe they are "advanced" when it comes to omni-channel capabilities, and between 35 and 40 percent believe they're lagging.

The market analysis was developed in partnership with Retail Systems Research (RSR), which surveyed hundreds of retail practitioners in August 2014. Across the board, the findings confirm the cross-functional challenges retailers, suppliers and logistics firms face as they build omnichannel capabilities into their operations. Also underscored was the critical role fulfillment plays in meeting consumer expectations for rapid delivery and flexible returns.

Other findings from the study:

• Both 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 omni-channel strategies.
• Forty-three percent of retailers report their legacy systems hold them back from omni-channel 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.

"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," said Paula Rosenblum, managing partner at RSR, in a press release. "While everyone is heads-down, particularly in figuring out the supply chain side of the omni-channel equation, no one should lose sight of the consumer."