‘Multichannel’ Shoppers Challenge Retail Supply Chains

Retail supply chains are no longer just multimodal, they’re multi-channel, and that’s adding layers of fulfillment complexity for shippers, a retail industry study finds.

Consumers aren’t just buying goods through Web sites, they’re using smart phones and tablets such as Apple’s iPad, and supply chains need to adapt to those platforms.

“The real challenge for today’s multichannel retailer is to become channel agnostic,” said Brian Gibson, supply chain management professor at Auburn University.

The university and the Retail Industry Leaders Association jointly developed the Third Annual State of the Retail Supply Chain Report, released Wednesday.

Retails Sales Rose 0.3 Percent in January

They said the report, sponsored by Accenture, finds retailers and supply chain executives shifting from recession-era cost cutting to planning for growth.

Online sales rather than in-store shopping are driving more and more of that growth. Electronic sales last year grew 15 percent to $35.3 billion, the report said.

In comparison, the study found overall retail sales growth only reached 4.1 percent.

More and more online sales orders are being placed using devices that didn’t exist five years ago, and e-commerce sales are predicted to grow 10 percent a year.

That makes multichannel “a game-changer” for retailers, the report says.

Auburn and RILA completed the study through a series of interviews and surveys with 199 supply chain executives from every segment of the retail industry.

The retailers all had more than $1 billion in annual revenue and multichannel sales operations. The executives had director-level or above responsibilities.

“Consumer expectations are changing, and as a result, retail business models are changing,” said Casey Chroust, RILA executive vice president of retail operations.

“Traditionally retailers have used separate operational models to move goods and fulfill orders. Now those models need to be merged,” Chroust said.

Distributed order management software that captures, manages and optimizes orders across platforms offers promise for multichannel retailers, the report said.

“While not a silver bullet, DOM offers promise for cross-chain visibility, integration and service improvement,” RILA and Auburn said in a statement.

The free report may be ordered through RILA’s Web site.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc