Although retailers say they want to transform their supply chains to be more customer-centric and omnichannel focused, 80 percent are not ready for the change.
According to a recent HRC Advisory study, expensive online returns, the taking over of e-commerce sales, and outdated systems are some of the challenges holding retailers back.
"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 fulfillment options, requires a significant increase in supply chain flexibility and better integration between the physical store and e-commerce network."
One of the key challenges, online returns, plagues retailers, as 95 percent of respondents said their biggest issue in transforming the supply chain is mitigating online returns. Eighty-five percent of retailers named the high cost of online returns as their biggest challenge.
Another key challenge is the cannibalization of in-store sales. As many as 75 percent of those surveyed said that e-commerce is cannibalizing what would be in-store sales. Seventy percent of retailers are still struggling to develop a profitable business model for e-commerce while maintaining a decent profit for stores.
Finally, the third largest challenge facing retailers is the integration of inventory and fulfillment in both online and physical store channels. More than half, 52 percent of retailers, said they do not have the systems in place to provide the required visibility to inventory in each store. However, 60 percent said they plan to invest further in their e-commerce systems to provide an improved customer experience.
-See this HRC Advisory study
52% of shoppers value in-store technology
Consumers torn between personalization and location information
Online consumer content influences about 50% of in-store purchases
New website offers deals in exchange for reviews
The buy button arrives: How social media shopping will change retail