Study: Omnichannel, Amazon impact retail supply chain

Increased customer expectations for a seamless front-end experience, as well as the “Amazon effect,” are having a significant influence on retailers’ back-end systems and operations.

According to a new study of 24 senior retail supply chain executives from Auburn University’s Center for Supply Chain Innovation, the Retail Industry Leaders Association (RILA) and Checkpoint Systems, “The State of the Retail Supply Chain,” 81% of respondents are either using, developing or investigating integrated demand planning.

Reasons for this strong interest in integrated demand planning systems include a desire to better expose store and distribution center inventory to customers, as well as acquire richer analytics about demand for goods and services.

In addition, 67% of executives surveyed offer store pickup by customers as an omnichannel fulfillment method. Perhaps it is no surprise that 61% agree that e-commerce “greatly complicates” company demand planning activities.

Looking ahead, 56% of respondents work for companies that will increase spending on supply chain process improvement this year. Forty-nine percent work for companies that are increasing their investments in omnichannel fulfillment to support faster, more efficient “click-to-delivery” capabilities.

Other notable findings include:

• 
  45% of executives highlight the need to develop more effective omnichannel returns strategies


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  26% of executives say their companies are prioritizing “enhanced customer service” as their primary supply chain strategy. This is more than double the 11% who said so in 2015.

Brian Gibson, executive director of the Center for Supply Chain Innovation, said the convenience and effectiveness of purchasing and receiving goods from Amazon.com is pressuring retailers across all verticals and channels to operate an advanced omnichannel supply chain.

“Amazon is at the epicenter of this,” said Gibson. “They’re really forcing everyone to up their game, and everybody is feeling pressure. How do I get my product delivered quickly and, at the same time, efficiently?”