Only 53% of retailers are able to offer accurate inventory information

Only 53% of retailers are able to offer accurate inventory information

US retailers are struggling to execute a truly customer-centric model, despite working hard to transform their supply chains, a new report has found.

According to study by strategic retail advisory firm HRC Advisory, expensive online returns, cannibalisation of in-store sales and outdated systems are just some of the challenges restraining retailers as they work to create an effective omni-channel model.

Findings revealed that while retailers are working to transform their supply chains to meet this new model, around 80% are not prepared for the magnitude of change required. The same number surveyed identified inventory visibility and accurate assortment planning between online and physical channels to be the top-two challenges in enabling fulfilment capabilities.

Only 53% sais they are able to offer accurate inventory information and fulfil the entire order at the time of online purchase, while only half are able to ensure fulfilment from the closest location when an item is available in multiple locations and distribution centres.

Around 55% of retailers have dedicated fulfilment facilities for each channel, but only 25% of these are launching initiatives to combine such facilities in order to serve both channels more cost-effectively.

“Today’s consumer is driven by an ‘I want it now’ mentality, yet many retailers are still struggling to deliver, said Farla Efros, president of HRC Advisory. “Competing with pure-play e-commerce retailers, and accommodating the multitude of new fulfilment options, requires a significant increase in supply chain flexibility and better integration between the physical store and e-commerce network. Without these changes, traditional retailers will not be able to execute a truly customer-centric model.”

The study found that retailers are struggling with a number of key challenges, namely the expense of online returns – their biggest issue in transforming the supply chain – the cannabalisation of in-store sales, and outdated systems and infrastructure.

On the latter point, the study revealed that more than half (52%) do not have the systems in place to provide the required visibility to inventory in each store, and only 35% had online capabilities such as vendor drop ship, or order in-store and deliver to the customer.

More positively, however, 60% of the retailers surveyed have plans to invest further in their e-commerce-related systems to provide an improved customer experience.