RILA report highlights importance of multichannel strategy

Arlington, Va. — E-commerce sales continue to grow and have a major impact on multichannel retailers, according to new report from The Retail Industry Leaders Association. RILA, in partnership with Auburn University and with sponsorship from Accenture, on Wednesday released the third annual State of The Retail Supply Chain report.

"This study will be essential reading for a wide cross-section of retail supply chain executives seeking insights into the key supply chain trends taking place in retail, including multichannel operations," stated Parag Jategaonkar, senior executive with Accenture's Retail practice. "Accenture's own experience with clients indicates an increasing focus amongst retailers on developing their supply chains to more effectively deliver a compelling customer experience, regardless of the channel." The most significant takeaway from the report centered on the importance of multichannel operations including fulfillment of dot-com, mobile, and tablet orders.

The report states that electronic e-commerce sales have grown by more than 15% to $35.3 billion, versus an overall sales growth of 4.1% versus the previous year. With predictions that e-commerce sales will grow 10% annually, multichannel has become a game changer for retailers.

According to the report, more than 85% of survey participants indicated that direct consumer fulfillment is a top priority for them. "Consumer expectations are changing, and as a result, retail business models are changing," RILA EVP retail operations Casey Chroust said. "Traditionally, retailers have used separate operational models to move goods and fulfill orders. Now those models need to be merged so that companies can continue to deliver the products consumers want across any channel without losing efficiency or adding cost."

The report also highlighted the various multichannel challenges facing retailers, including: variation in shipment size, order filling processes and delivery methods, as well as the inconsistent SKU assortment of multichannel retailers. Less than 18% of the retailers surveyed offer the same SKUs across channels. "The real challenge for today's multichannel retailer is to become channel agnostic and fulfill demand effectively regardless of order type or origin," stated Brian Gibson, professor of supply chain management at Auburn University. "As sales volume grows in nontraditional channels, achievement of technology integration, operational flexibility, and process visibility will separate the leaders from the pack."

The report data was compiled through a series of executive interviews and industry surveys with retailers across every segment of retail, with the goal of understanding the capabilities that drive exceptional retail supply chain performance. All told, 199 retail supply chain executives took part in the research.

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