Modern retail supply chains resemble patchwork quilts, made up of thousands of squares (warehouses and suppliers) and stitches (supply chain systems). While this patchwork quilt has operated well for the past few years, modern retail supply chains have reached a point where the stitches threaten to rip. While this is the primary force behind omnichannel investment, modern retail supply chains are also investing for these top reasons.
Consumers Demand Transparency from Retail Supply Chains
Consumers want to know where their stuff is. They want to know why a product is available at this store, and if so, can it be picked up at another store? For Walmart, with over 10,700 stores, reports Curt Barry of MultiChannel Merchant, this demands better transparency and end-to-end visibility. This is also a requirement of omnichannel supply chain strategy too. Since consumers’ demands for better transparency and accountability from retail supply chains is increasing, retailers must invest in additional omnichannel technologies to track products, assets and individual shipments.
Walmart Is Ramping up Investment in Omnichannel
Take a moment to think about the biggest retailers that have previously invested in omnichannel retail supply chain strategies. Two major players come to mind, Walmart and Target. Although both retailers have invested heavily in omnichannel shopping technology in recent years, Walmart is at it again. This year alone, Walmart invested in creating grocery pickup, and now, online orders picked up in-store are discounted, compared to the cost of picking up and buying an item off the shelves. As a result of Walmart’s continuing investment into omnichannel supply chains, more retailers will follow suit.
Consumers Using Omnichannel Shopping Systems Spend More
According to Forbes magazine, customers at the retail giant, Walmart, spend an average of $1400 annually in brick-and-mortar stores, and others spend only $200 annually on Walmart’s online platform. But, consumers using multiple channels to shop at Walmart, including in-app purchases, browser-based e-commerce platforms and in brick-and-mortar stores together, as well as using online order pickup, spend $2500 annually. Even combining in-store and online purchases together is less than the value of consumers using multiple channels simultaneously to shop.
Consumers Want a Clairvoyant Shopping Experience
Retail supply chains face an unusual circumstance; consumers want to see what they want without really searching for it. Unfortunately, clairvoyance remains on the fringes and well outside of omnichannel supply chain capabilities, but new technologies and analytics have the potential to leverage consumers’ data to put sought-after products in front of consumers’ eyes. Consumers do not want to work to find what they are looking for, and retail supply chains can use the power of analytics and data from across omnichannel shopping systems to create better inventory forecasts and leave customers satisfied every time.
Investment an Omnichannel Is Essential to the Success of Retail Supply Chains
Investing in omnichannel supply chain systems is no longer about gaining a competitive advantage; it is about being able to stay competitive with your existing competitors.
In fact, investing in omnichannel technologies, warehouse systems and analytics make up one of the four basic rules for success in modern retail supply chains, as shown in the following infographic, published by Forbes magazine.