RETAIL METRICS THAT MATTER. Part 4: Inventory Fulfilment & Technology Investments

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1 Part 4: Inventory Fulfilment & Technology Investments

2 INTRODUCTION Retailers are transforming their businesses to be able to recognise, analyse and respond to consumers rapidly evolving preferences and behaviours. This four-part series highlights results from a survey of retail executives representing a cross-section of verticals and company sizes. Each part gives a brief overview of specific metrics that are top of mind for retailers who are striving to transform their businesses into nimble, collaborative organisations with the goal to better position themselves in today s market. PART 1: How Retailers are Managing Today s Business Priorities and Challenges PART 2: Factors Impacting Overall Growth: Economy, Budgeting, Globalisation PART 3: Internal Business Collaboration & Analytics in Today s Retail Enterprise PART 4: Inventory Fulfilment & Technology Investments The data provides insight into their business priorities, factors impacting growth, technology requirements, and other challenges these executives are facing in today s market. For a more in-depth analysis of these results, be sure to read the full survey, Metrics that Matter to Retail CXOS offered at the end of this ebook. 2

3 PART 4 Inventory Fulfilment & Technology Investments 3

4 How are the following inventory models ranked in importance to improving customer service? Omni-channel retailing begins with inventory fulfilment - ensuring consumers can buy, receive and return items from any channel and to any channel. Flexibility is the key as inventory models must adapt quickly and easily to evolving consumer demands. The most popular model is buy online/pickup in-store. In fact, retailers consider this the most important inventory fulfilment model when it comes to improving customer service. Kiosk ordering in-store is also seen as an important model to satisfy demand for out-of-stock/ not-in-store inventory lines. Buy online/ pickup in-store deliver to store deliver to home Buy via mobile app/ deliver to home pick up in another store Buy in-store through store associate/deliver to store Buy via mobile app/ pickup in-store Buy in-store through store associate/deliver to home Reserve online/purchase and pickup in-store Buy in-store through store associate/pickup in another store 52% 41% 35% 17% 15% 13% 12% 8% 5% 2% 52% of companies rate buy online/pickup in-store as the most important inventory fulfilment model 4

5 Which inventory fulfilment models do you have in place today or plan to implement? Some inventory strategies are harder to achieve than others and many retailers feel that even though they offer flexible options it does not always line up with customer expectation. Retailers report aggressive plans to catch up on fulfilment options they do not currently offer, with 70% to 85% planning to have each model in place by the end of the year. Despite the importance placed on buying via kiosk, future adoption plans lag slightly behind other omnichannel fulfilment models. Buy online/ pickup in-store Buy in-store through store associate/ deliver to store Buy in-store through store associate/ pickup in another store deliver to store Buy in-store through store associate/ deliver to home Buy via mobile app/ deliver to home Buy via mobile app/ pickup in-store deliver to home pick up in another store Reserve online/ puchase and pickup in-store HAVE IN 2014 PLANNING TO ADD IN 2015 N/A 58% 27% 15% 50% 30% 20% 49% 26% 25% 49% 23% 28% 47% 34% 19% 44% 38% 18% 40% 43% 17% 38% 37% 25% 38% 32% 30% 35% 46% 19% 70-85% of retailers report aggressive plans to add inventory fulfilment options they don t currently offer 5

6 Do you feel your current solutions are equipped to handle changes in the following areas? Over three quarters of retailers are confident their current solutions can handle changes in billing and recurring revenue models, but are slightly less confident in the ability of their omnichannel fulfilment and customer loyalty programs. Self-checkout has been hit-or-miss for many merchants over the years in its ability to satisfy shoppers, and mobile payment is changing so rapidly, that it is easy to understand retailers uncertainty about its capabilities. Billing/recurring revenue models Omni-channel fulfilment AGREE DISAGREE NO CHANGE 76% 17% 7% 61% 32% 7% 3/4 of retailers are confident their current billing and recurring revenue models can handle change Customer loyalty programs Mobile shopping Staffing efficiency Mobile payment Self-checkout 60% 35% 5% 58% 38% 4% 55% 39% 6% 52% 43% 5% 47% 48% 5% 6

7 Which of the following technologies have you implemented or are planning to implement? Retailers see investment in critical technologies as vital in today s omni-channel market. Not surprisingly, e-commerce and mobile apps lead the list of technologies currently in place, and just over half have mobile POS. Retailers will be most aggressive in their adoption of mobile wallets and new social channels, with many planning to invest across a broad range of solutions. When considering new service offerings, retailers have to maintain a focus on the customer experience. Ultimately new initiatives will be judged by customers for their transactional efficiency. E-Commerce Mobile app HAVE IN 2014 PLANNING TO ADD IN 2015 N/A 63% 30% 7% 62% 30% 8% Over 60% of companies currently have e-commerce and Mobile App technologies Mobile POS New social changes EMV/payment security Geo-location technology Mobile wallets BLE beacons 53% 29% 18% 49% 43% 8% 41% 39% 20% 37% 39% 24% 36% 44% 20% 30% 36% 34% 7

8 What is your strategy when it comes to choosing solutions? Nearly 40% of retailers prefer an integrated offering that allows them to standardise on a 39% single solution. A small percentage choose in-house proprietary solutions. Surprisingly, only 12% prefer Cloud-based solutions over an on-premise model. We prefer integrated solutions that cover all necessary capabilities to allow us to standardise on a single solution 39% 36% We look for individual best-in-class solutions that can be integrated with other solutions of retailers prefer to implement integrated solutions that allow standardisation on a single solution We prefer cloud-based solutions 12% 13% We prefer in-house proprietary solutions 8

9 How has your engagement with IT system selection changed in the last 1 to 2 years? 76% of retail executives today are strategically involved in the identification and selection of technology solutions. Armed with a sober assessment of current IT capabilities and with aggressive plans to fill the technology gaps within their omni-channel strategies, retail executives aren t leaving technology decisions to chance. My role has increased significantly 42% 34% My role has not changed. I play a key role 76% of retail executives today play a key role in identifying and selecting technology solutions I am not involved 4% My role has not changed. I play a minor role 7% 13% My role has decreased significantly 9

10 Want to Know More? Be sure to check out all the ebooks in this series: Part 1: How Retailers are Managing Today s Business Priorities and Challenges Part 2: Factors Impacting Overall Growth: Economy, Budgeting, Globalisation Part 3: Internal Business Collaboration & Analytics in Today s Retail Enterprise Part 4: Inventory Fulfilment & Technology Investments Read the Complete Survey 10

11 Level King Street Sydney NSW info@uxceclipse.com ABOUT UXC ECLIPSE Microsoft Dynamics Gold Partner UXC Eclipse is the Retail ERP Specialist. The preferred implementation partner for large and complex retail solutions, UXC Eclipse offers business consulting and project management, applications development, corporate performance management and business process management. Speak to UXC Eclipse about how their integrated Microsoft Retail offerings are delivering true omni-channel retailing globally with mobile POS, full e-commerce, retail warehouse management and logistics, sales/marketing and social listening. Solutions are available on-premise or in the cloud all with a customer retention rate above 97% and delivered to the highest levels of customer service. < 11