SAG_Twitter_Retail_Struggling_Feb17.jpgAlthough the majority of retailers consider operational efficiencies to be of the utmost importance, less than a third are able to figure out how to achieve them.

While “67% of retailers consider overall business operations efficiency to be of high or critical importance, only 27% consider themselves able to manage this well,” according to a study of digital industry strategies by Forrester Consulting, commissioned by Software AG.

Retail just keeps getting more complicated. The advent of omni-channel, with its buy-anywhere-return-anywhere goal, has led to an explosion in the number of systems that retailers must orchestrate.

Systems for your supply chain network, store network and other individual systems must all “talk” to each other to meet market demands. This can be an operational nightmare but, if you get it right, it can also create significant operational efficiencies.

The goal is clear; create efficiencies that help you to better manage your processes systematically and in the future. This hinges on the ability to connect and interact with the multitude of systems across your enterprise, as well as the ones outside it, that need to be involved in the omni-channel process – quality assurance, inventory, inbound returns must all be considered.

And you must have the ability to execute the omni-channel processes automatically and control the interactions between different systems. Not only do these elements act as the basis with which to control your orchestra but they also give you real-time actionable insight into your omni-channel business. This insight is the foundation for automated corrective actions to ensure the orchestra continues to play the right tune.

Failure to conduct this orchestra can result in margin erosion—online orders requiring high levels of human interaction can lead to errors, or orders will be delayed during periods of peak demand.

So why is it so difficult? A recent article in The Guardian helps to explain this, noting that John Lewis, a major UK retailer, expects that its online sales volumes will increase from 30% to 50% by 2020.

“This will present the business with a fresh set of challenges as each item sold online generates less profit because of the behind-the-scenes effort involved in fulfilling orders while the company simultaneously services the huge fixed costs associated with running large department stores,” said the article.

Digitalization, and all of the moving parts involved, is a complex task for retailers and many are simply not ready. To find out how fit your organization is for digital transformation, Software AG offer a digital fitness assessment here. It takes about 10 minutes and once complete provides clear insight into priorities to maximize chances of success with Digitalization of your business along with a free copy of the Forrester study: “Energize Your Digital Transformation; Seven Disciplines to Support a Successful Digital Strategy

 

           

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