Cross-channel inventory management is next omni-channel challenge for retailers, reveal RSR and hybris

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Hybris, a SAP company and a fast-growing commerce platform provider, today revealed research by RSR that highlights the challenges retailers face as they transition to the next stage of omni-channel commerce.

Entitled “Omni-Channel Retail 2014: Double Trouble”, the hybris sponsored research contains analysis of the business drivers, opportunities and organizational constraints surrounding retailers’ omni-channel strategies.

According to the report, the biggest single challenge facing retailers today, in order for them to reach the next level of commerce, is the proper implementation of inventory and order management which has now eclipsed data management. Results showed that, while 93% of retailers rated system-wide inventory visibility as the most significant capability in executing their omni-channel fulfilment strategy, currently just 45% can enable this. Added to this, only 39% are making this happen via system synchronization across all channels.

The study explores the impact of today’s redefined shopping reality in which consumers expect to begin and end their shopping experience in the digital domain, or to augment their store experience with digital mobile.

The “Omni-Channel Retail 2014: Double Trouble” research yielded three key findings:

  • Retail ‘winners’ design the digital experience with the dual objective of transacting more sales in the digital space anddriving more sales in the physical store
  • Omni-channel fulfilment has become a top priority for retailers; 53% want to allow customers to purchase, take delivery or return a product through the channel of their choice
  • Fulfilment agility requires modifications to operational systems and processes to efficiently support anytime/anywhere consumer shopping expectations

The research also uncovered how retailers that excel in the omni-channel world recognize their digital and physical universes are inherently connected and that this understanding is the key to leveraging assets – regardless of how customers choose to engage. Retailers that recognize this potential are now looking to improve operational execution across all channels to deliver on the omni-channel fulfilment opportunity.

“The undeniable consumer trend towards more complex paths-to-purchase makes the concept of a single ‘selling channel’ increasingly irrelevant,” said Stefan Schmidt, vice president of commerce & cloud strategy at hybris. “As the research shows, retailers who fail to offer a seamless experience between the digital and physical channels will be at a disadvantage to those that excel in uniting their physical and digital channels and make it easy for customers to purchase products from any channel and via any channel. Therefore, retailers need to enable enterprise-wide processes that ensure they can deliver on customer promises.”

The bigger picture – closing the loop

Retailers are working hard to serve customers seamlessly across all channels. While the initial focus was on pulling together data to achieve ‘one view of the customer’, the report shows it’s now being extended to creating supply chain flexibility as retailers look to ‘close the loop’ and deliver a better customer experience.

However, as retailers look to expand their merchandising strategies beyond the store and to deliver on the omni-channel fulfilment promise, two key organizational inhibitors are hampering efforts; 44% of respondents in the research confirmed they are still unable to integrate inventory and order management across all channels, while 42% lack a consolidated view of the customer across all channels.

”Aligning and strengthening the supply chain in order to extend the ‘always-on’ mentality across all areas of the shopping experience is the next priority for retailers who now face a twofold challenge; delivering for the customer and for the business,” said Nikki Baird, managing partner at RSR Research. “As retailers focus on modifying their operational systems and processes to efficiently support anytime/anywhere shopping, gaining an enterprise-wide view of customers and inventory management is central to initiating the operational measures needed to meet consumers’ cross-channel needs and wants.”

Retailers that master this challenge will gain the flexibility required to capture cross-channel customer demand and meet it with any available inventory, no matter where it’s located.