CSCMP's Supply Chain Quarterly
October 21, 2018
Forward Thinking

Most retail supply chains are not ready for omnichannel commerce

Less than one-fourth of retail CEOs participating in a global study sponsored by JDA Software believe the rise of omnichannel shopping will affect their organizations.

A new study suggests that many global retailers may not be prepared for the challenges of the omnichannel world. Eighty-three percent of retail chief executive officers (CEOs) participating in a survey commissioned by JDA Software said that their supply chains currently are "not optimal" for meeting omnichannel's demands. The consulting firm PwC's International Survey Unit contacted 409 CEOs at retail enterprises around the world on behalf of the software company during the first half of 2014. The survey's findings are detailed in the report CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World.

Omnichannel commerce does not seem to be top of mind for many of the CEOs. Just over one-third (34 percent) of the respondents considers the increase in omnichannel shopping to be a potential threat, and a mere 22 percent said they believe it will impact their organizations. They appear instead to be focusing on traditional growth areas. For example, 65 percent of respondents from the top 250 retail organizations by revenue said their top revenue-growth priority in the next 12 months was expansion into new markets. Only one-third of the respondents cited enhancing distribution capacity and supply chain management as a key driver of profitable growth.

Despite the lack of concern about omnichannel demands, the survey did find that focusing on supply chains has a huge payoff for retailers. The study said that "retail leaders" have 15 percent lower supply chain costs, less than half the average inventory levels, and cash-to-cash cycles that are more than three times shorter than the average for all respondents.

CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World and commentaries on the findings are available here.

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