Retail CEOs say silos are holding back omnichannel

Retail CEOs say internal silos are holding back omnichannel success. In fact, retailers without these operational barriers are more positive about achieving profitability, according to a new report.

The "CEO Viewpoint 2016" report highlights crucial differences between these haves and have-nots, noting the have-nots are faring much better in providing a customer-centric omnichannel shopping experience. The report, prepared for JDA Software Group by PwC, surveyed more than 300 retailer and consumer goods CEOs in late 2015 and found that the further along a company is in removing silos, the closer they are to providing a good omnichannel experience with fewer operational expenses.

Just 18 percent of retailers surveyed said they had eliminated operational silos, but those that had exhibited greater confidence (59 percent vs. 48 percent) in delivering a more customer-centric shopping experience across channels. And 63 percent of retailers without silos were more confident about profit growth compared to 43 percent of CEO with lingering silos.

An earlier report by Innovative Retail Technologies revealed that silos inside organizations are beginning to break down as tech priorities and subsequent spending work toward an omnichannel goal.

"CEOs that have removed silos are also achieving significant competitive advantage through lower costs and increased investments in customer-centric services," according to a statement from JDA.

Silo elimination is also creating significant cost savings, particularly in the area of fulfillment. Notably, costs related to shipping processing returns are down for these retailers.

Meeting omnichannel fulfillment needs is a top priority for retailers right now, with the majority of CEOs working to provide or improve click-and-collect programs as shoppers increasing prefer to buy online and pick up in stores.

"The survey results from our third annual CEO survey indicate that retailers poised to become omnichannel leaders are investing more in capabilities that allow them to better understand their customers, delivering richer customer shopping experiences," said Wayne Usie, senior VP, global industries and value delivery, JDA. "Companies who want to successfully compete with these leaders, therefore, must not only remove the business silos that prevent seamless operations, but also rapidly increase their investments in omnichannel capabilities before they fall further behind omnichannel leaders. These actions will define retail winners and losers going forward."

Silos are often held up as some of the biggest barriers for retailers, particularly large retailers, looking to link the brick-and-mortar experience to the digital one.

For more:
-See this JDA survey

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