Friday 30th Sep 2016 - Logistics Manager

Only 16pc fulfil omni-channel profitably

Only 16 per cent of companies say they can fulfil omni-channel demand profitably today, according to a report prepared for JDA Software Group by PwC.

The Omni-Channel Fulfilment Imperative study is based on a global survey of more than 400 retail and consumer goods CEOs conducted in late 2014.

Two thirds of respondents said: the cost of fulfilling orders is growing as they increase their focus on selling across channels.

The highest costs associated with omni-channel selling were:

* Handling returns from online and store orders: 71 per cent

* Shipping directly to the customer: 67 per cent

* Shipping to the store for customer pick-up: 59 per cent

Seventy-one per cent of respondents said omni-channel fulfilment is either a high or a top priority. And these CEOs are planning to invest an average of 29 per cent of their total capital expenditure for 2015 on improving omni-channel fulfilment performance.

When asked to rank their top initiatives for improving business operations, CEOs’ number-one choice (57 per cent) was spending capital on creating new customer experiences.

The fulfilment capability most cited as needing attention was transport and logistics, cited by 88 per cent as a priority for the future. This was followed by focus on improving inventory availability to fill orders, 85 per cent.

“Every time retailers receive an online order, they have a number of options to fulfil that demand. JDA’s new study demonstrates that most retailers lack the insight to make these decisions in a profitable manner — and are not sufficiently focused on this critical capability gap,” said Kevin Iaquinto, chief marketing officer at JDA.

“They need intelligent logistics and fulfilment solutions that can reveal the hidden costs, and the customer service trade-offs, associated with every delivery option.