S-4 A SPECIAL SUPPLEMENT TO DC VELOCITY
As retail goes omnichannel, many distribution operations are undergoing a seismic shift. That’s particularly true of conventional retailers, which once only had to worry about keeping their
store shelves stocked. These days, that’s not enough.
When it comes to the shopping experience, today’s
consumers expect to move effortlessly between the
physical and digital worlds—they want the option to
buy online and pick up at the store, or buy at a store
and have the order delivered from a warehouse/
DC—or even another store. That puts enormous pressure on the retailer’s order fulfillment and distribution
operations to integrate their store and digital selling
channels to work seamlessly together.
To get a better understanding of how this has affected distribution operations, DCV and ARC Advisory
Group teamed up last year to conduct the inaugural omnichannel distribution study. Among other
findings, the research indicated that retailers’ service
ambitions often outpaced their capabilities. That is,
although they offered customers a wide array of omni-channel services, they didn’t always have the proper
groundwork in place—particularly at the store level.
To see what progress has been made in the past
year, DC VELOCITY and its sister publication, CSCMP’s
Supply Chain Quarterly, teamed up with ARC Advisory
Group to conduct a follow-up study—one that would
take a deeper dive into the details of DC operations
that support omnichannel initiatives. This year’s sur-
vey sought to answer a number of key questions: How
far have retailers progressed down the omnichannel
road? How are they responding to the new demands of
an “anything, anytime, anywhere” retail environment?
And what tools and technologies are they using to
manage their operations?
THE WHYS AND HOWS
Given all the headaches involved, it seems fair to ask
why companies get involved in omnichannel in the
first place. As the study made clear, most consider
omnichannel a business imperative. When asked to
name their top reason for engaging in omnichannel
commerce, 83 percent of respondents said their objective was to increase sales—up slightly from last year’s
78 percent. In both years’ studies, the second and third
most frequent responses were to boost market share
and to increase customer loyalty.
As for what sales channels the respondents are
using, 38 percent are engaged in “direct sales” to the
customer or consumer, meaning they sell the merchandise themselves either in a brick-and-mortar store
or through a Web store or catalog operation. Another
10 percent engage in “indirect sales,” working with
suppliers or manufacturers that provide and ship the
merchandise on the retailer’s behalf. The remaining
52 percent are using a combination of direct sales and
By James A. Cooke
EVERYONE WANTS TO BE THE MASTER OF THE OMNICHANNEL UNIVERSE. BUT
OUR EXCLUSIVE STUDY SHOWS THAT MOST COMPANIES HAVE BEEN RELUCTANT
TO MAKE THE NECESSARY INVESTMENT IN DISTRIBUTION TECHNOLOGY.
STUDY: TO EXCEL AT
YOU NEED THE RIGHT STUFF