Thursday, March 17, 2011

New Channels, Old Problems

Multi-channel retailing is all the buzz, but familiar problems lurk. There is hardly a retailer who does not operate an online channel, some operate several. To that, the new emerging mobile channels as well as the social media-based sales channels (remember, Delta just enabled their Facebook channel so you can buy Delta tickets without ever leaving Facebook, check out for yourself at: www.facebook.com/delta) and of course the old mail catalogs. You get the picture.

There is also good reason for it – the online retail sales have grown at a much faster rate than conventional retail (see below the data from US Census Bureau).
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New research from RSR shows that almost three quarters of retailers now have an online channel, while a full fourth of them operate at least four sales channels in addition to their stores.
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While the world of multi-channel retailing is new, their top challenges are not. In fact, the top two challenges quoted by more than half the retailers essentially remain deficient supply chain capabilities followed by merchandising, customer concerns, and inventory optimization:
  • Real-time inventory visibility/ management (#1, more than 58% retailers)
  • Managing fulfillment across channels (#2, more than 56% retailers)
  • Optimizing inventory deployment to speed delivery and minimize holding costs (#5, more than 35% retailers)
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© Vivek Sehgal, 2011, All Rights Reserved.

Want to know more about supply chain processes? How they work and what they afford? Check out my books on Supply Chain Management at Amazon.

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