The Retail Industry Leaders Association (RILA) in partnership with Auburn University released the third annual State of the Retail Supply Chain Report today.
The report findings reveal a shift by retailers and supply chain management (SCM) executives from cost cutting to growth. The report also places emphasis on multichannel retailing and explores how retailers are working to meet the increased consumer demand for continual access to products from any channel.
The report data was compiled through a series of executive interviews and industry surveys with retailers across every segment of retail, with the goal of understanding the capabilities that drive exceptional retail supply chain performance.
One hundred and ninety-nine retail supply chain executives took part in the research. The criteria for participation included company revenue exceeding $1 billion, multichannel operations, and director-level or above responsibilities. The respondents have 17 years of retail experience, on average.
“This study will be essential reading for a wide cross-section of retail supply chain executives seeking insights into the key supply chain trends taking place in retail, including multichannel operations,” said Parag Jategaonkar, senior executive with Accenture’s Retail practice, which sponsored the report.
The most significant takeaway from the report centered on the importance of multichannel operations including fulfillment of .com, mobile, and tablet orders. The report shows that electronic e-commerce sales have grown by more than 15 percent to $35.3 billion versus an overall sales growth of 4.1 percent over the previous year. With predictions that e-commerce sales will grow 10 percent annually, multichannel has added a new layer of fulfillment complexity that retail SCM executives need to manage.
The report also highlighted the various multichannel challenges facing retailers, including variation in shipment size, order filling processes and delivery methods as well as the inconsistent SKU assortment of multichannel retailers. Less than 18 percent of the retailers surveyed offer the same SKUs across all channels.
“The real challenge for today’s multichannel retailer is to become channel agnostic and fulfill demand effectively regardless of order type or origin,” said Brian Gibson, Professor of SCM at Auburn University. “As sales volume grows in non-traditional channels, achievement of technology integration, operational flexibility, and process visibility will separate the leaders from the pack. These capabilities provide the fulfillment agility, accuracy, and cost efficiency needed for multichannel success.”
