More than 85% of retailers say direct to consumer fulfillment will command a greater level of their attention in the future, as they aim to create a seamless customer experience regardless of channel, according to a Retail Industry Leaders Association (RILA) report [download page] released in March 2012. And although 63% of respondents to an RSR Research survey also released in March indicate that they have a single source of inventory that they can use to meet demand across any channel, only 10% of the RILA respondents strongly agreed that they had achieved a desired level of integration between their retail stores and direct-to-consumer fulfillment operations.
Although the majority of respondents to the RSR survey say they have a single source of inventory across all channels, current direct-to-customer fulfillment strategies are used by relatively few. For example, only 40% of winners (those with comparable store/channel sales growth of over 6% in 2011) and 29% of others say they physically co-locate their direct channel’s inventory in a store, and only 35% of winners and 18% of others say they have a dedicated space for the inventory. In fact, only one-quarter of winners and 36% of their peers say they ship from stores, which RSR insight suggest seems somewhat optimistic given anecdotal evidence.
Consumer demands for the lowest price (68%) and the unpredictability of demand in an uncertain economy (68%) are the leading supply chain business challenges to retailers. After these leading challenges, there is a significant drop-off to others such as making sure the supply chain can keep up with demand (43%), uncertainty about variable supply chain costs (38%), and the network strain from cross-channel shoppers (29%).
About the Data: The RSR results are from a survey conducted online from November 2011 – February 2012, with responses from 103 qualified retail respondents. 33% of respondents were from companies with more than $1 billion in 2011 revenue.
Information for the RILA report was gathered via senior executive interviews and an online survey. A total of 199 retail supply chain executives took part in the research. Two-thirds were from companies with revenues exceeding $1 billion, and 68.3% were from a company with multi-channel operations. 72.9% were direct-level or above, with an average retail experience of 17.1 years.
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