We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2023
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2023
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Struggling to adapt to an omnichannel world
Forward Thinking

Struggling to adapt to an omnichannel world

February 25, 2015
Supply Chain Quarterly Staff
No Comments

It's a whole new world out there for retailers and consumer goods companies—an omnichannel world, where consumers expect a seamless shopping experience, whether they are buying from a smartphone, a clothing rack in a retail store, or a catalog they receive in their mailbox.

Both retailers and consumer goods companies are struggling to create this shopping "nirvana," and they remain skeptical about the feasibility of engaging in omnichannel commerce while still maintaining margins. Part of the problem, according to a new report from the consulting firm EY, is that retail and consumer goods companies are trying to apply older supply chain models—specifically those created for e-commerce—in this new environment, and they're not working.

The February 2015 report, Re-engineering the supply chain for the omni-channel of tomorrow, is based on a joint survey EY conducted with the Consumer Goods Forum, supplemented with interviews with senior supply chain executives from the world's largest consumer products and retail companies.

The report finds that while Internet sales are projected to increase three times as much as store-based sales, that growth is not translating into greater profitability. Only 33 percent of respondents said they expected to see increased profits from operating under their omnichannel strategy, and only 38 percent said that their omnichannel initiatives have improved their margins.

The source of this disconnect, according to EY, is an inappropriate supply chain design. In the rush to sell products online, companies "bolted on" processes and systems without integrating them with those for store fulfillment. The result has been the spread of inefficient processes and a lack of visibility across sales channels. It is no surprise, then, that 81 percent of respondents said that they did not believe their current supply chain was well suited to omnichannel retailing. About three-fourths (76 percent) believe that supply chain transformation, rather than incremental change, will be required to succeed.

To rectify these problems, companies will need to transform their supply chains, says the report. The authors recommend an array of remedies, including, among others: dismantling channel silos and creating a single, integrated strategy; embedding omnichannel supply chain strategies into overall corporate strategy; prioritizing agility and responsiveness in omnichannel supply chain design while balancing it with efficiency; collaborating with value chain partners to enable seamless visibility and fulfillment; replacing key performance indicators (KPIs); and aligning profit-and-loss priorities with supply chain functions.

To download the report, click here.

    • Related Articles

      How to create smarter supply chains for an unpredictable world

      Struggling to find our way

      Study finds that companies are struggling to handle supply chain complexity

    Recent Articles by Supply Chain Quarterly Staff

    TJC acquires fast-growing Dutch maritime spare parts logistics firm

    Kuehne+Nagel acquires Candian customs broker Farrow

    U.S. cargo theft rates on track for slight-to-moderate rise in 2023

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Walmart to open fifth “next-gen” fulfillment center in 2026

    • 53% of procurement leaders expect to increase their spending in 2024

    • U.S. faces permanent labor shortage, says University of Tennessee economist

    • Pepsi exec highlights four key structural changes in the supply chain

    • What skills will you need in the Age of AI?

    Featured Video

    Edge2023 innovationtheater here technologies

    CSCMP EDGE 2023 Innovation Theater: Enabling Peak Performance in Last-Mile Delivery Through Private Mapping and Custom Routing - HERE Technologies

    CSCMP EDGE 2023
    At HERE Technologies, we understand the hypercompetitive world of e-commerce, retail, and parcel delivery is increasing in complexity every day. End customers demand ever-increasing delivery performance levels regarding on-time arrivals, flexibility in delivery schedules, pricing and payment options, and more....

    FEATURED WHITE PAPERS

    • Balancing Act: How Freight Brokers Help Shippers Navigate Uncertainty

    • Quarterly Freight Data Report: Q3 2023

    • A Brighter Future: How COVID-19 Continues to Change Freight Procurement Strategies for the Better

    • Five questions to ask before electrifying your indoor forklift fleet

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing