Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
RSR's annual Cross Channel Benchmark re-confirmed that delivering a consistent cross-channel shopping experience has become table stakes for successful retailing. No surprise there. But what was surprising was the apparent slowness in adopting efficient omni-channel operations and organizations.
Sure, some retailers have created "omni-channel" titles and departments, but those seem to be mostly about customer-facing or marketing activities as opposed to managing inventory, customer and order data.
Let's take a look at a few data points:
We asked retailers to rate the level of channel synchronization in the organization for thirteen different processes ranging from fulfillment to customer segmentation. Less than 20 percent reported "full synchronization" of any of those processes. On a positive note, more than a third reported "full synchronization in progress" for inventory visibility, (the second most highly valued process for enabling omni-channel strategy), demand forecasting, and just under a third reported full synchronization in process for their digital channels. Virtually every other process is limping along to synchronization—with "some synchronization in progress."
More than half our survey respondents still believe consumer expectations continue to outpace their ability to deliver a consistent cross-channel experience. Fully 83 percent of those with annual revenue greater than $5 billion cited this as a top-three business challenge.
It's not like retailers haven't been throwing money at the problem. Unlike respondents to most of our other benchmarks, only 15 percent cited budget or IT resources as a top-three internal challenge. That's a big difference from last year, when 38 percent cited IT resources as an issue. Their pain is about problem symptoms, not causes. The need for a single-view of the customer across all channels and the need for a single view of inventory and order management were the most frequently cited organizational inhibitors. But this begs the question: what's it going to take to relieve the symptoms and get more efficient?
We believe there are two primary issues, one organizational and one technological. Organizationally, most enterprises haven't aligned their enterprise around the brand, and if they have, they haven't quite got their incentives set up to be channel indifferent. This must change. Secondly, adding more "Scotch Tape and baling wire" to existing technology infrastructures is apparently not helpful. In fact, those that have been involved in cross channel activities the longest (five to 10 years) tend to be poorer sales performers than those who entered the cross channel arena over the past two-to-five years.
It's not easy to change the wheels on a train that's racing at 100 miles (or 150 kilometers) per hour. Yet it seems that's what the situation calls for.