SCOTTSDALE, Ariz.--()--For retailers today, it’s an exciting but challenging time. The e-commerce revolution has created a newly empowered consumer – the ‘always-on’ consumer – who has higher expectations for the retail shopping experience than ever before. But how should retailers transform their business – and their supply chains – to support the omni-channel delivery of products to these new consumers?
“Successful retailers must focus on creating great customer experiences”
Earlier this year, JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, partnered with Kevin O’Marah, senior research fellow at the Stanford Global Supply Chain Forum to take a deeper look at this changing retail environment, surveying more than 100 retailers to examine the effects of e-commerce on the retail value chain. Following are some highlights of that survey:
The E-Commerce Explosion
Whether you look at forecasts from JP Morgan, Gartner, Euromonitor or Forrester, the trend is clear: there is significant growth in e-commerce expected in the future. When examined alongside the most recent U.S. census data tracking e-commerce sales by different retailer types, an interesting trend emerges. Retailers not bound by brick-and-mortar real estate – for instance, those that sell through catalog, television or phone – are quickly taking advantage of this channel, with e-commerce accounting for a higher percentage of their sales.
Shifting Brand Loyalties
When we asked retailers if they thought an e-commerce-enabled future favors brand loyalty for the manufacturers, retailers or neither, the survey respondents were essentially split. It is possible that retailers see the emergence of e-commerce as an accelerator to brand building that favors manufacturers who ‒ like PepsiCo a few years ago – can sweep away huge amounts of retired imagery and messaging almost overnight, while stores need to physically remove signage, fixtures and labels across thousands of doors.
Supporting New Levels of Complexity
When retailers start exploring how to accommodate this new level of complexity, they must consider the structures and functions that are involved. A critical element is better integration between the store and the supply chain. While it may be too much to expect supply chain and store integration to consolidate data like total cost for product, packaging, delivery, financing terms and service contracts, it is clear that is the direction things are headed.
The New Retail Value Chain
Clearly, there is an expectation that retailers are going to have to design a new value chain. Processes need to be integrated from source to sale. Retailers must have a more sophisticated understanding of their relationships with suppliers — all the way through to the shelf or point of sale, that moment where the shopper is there and they’re thrilled because you have what they want.
“Successful retailers must focus on creating great customer experiences,” said Wayne Usie, senior vice president, retail, JDA Software. “More than ever, there is a greater need to understand, anticipate and meet omni-channel shopper needs. These sophisticated shoppers are much more demanding and much less patient with lackluster service, out-of-stock products, late deliveries and other risks of the retail experience. Today’s customers expect retailers to be just as informed and connected as they are, which places new demands on the entire retail supply chain.”
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About JDA Software Group
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, is the leading provider of innovative supply chain management, merchandising and pricing excellence solutions worldwide. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders, including i2 Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA’s robust services offering, including complete solution lifecycle management via JDA Cloud Services, provides customers with leading-edge industry practices and supply chain expertise, lower total cost of ownership, long-term business value, and 24/7 functional and technical support. To learn more, visit jda.com or email firstname.lastname@example.org.
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