DC Velocity - February 2018

interviews, and a summary of the survey results in our April issue.

GETTING A GRIP ON CHANGE

The researchers conducted 20 interviews with retail supply chain executives, most of whom were chief supply chain officers or senior vice presidents of supply chain. All work for medium-sized to very large retailers; all but a handful of those companies report annual revenues exceeding $1 billion, and together, they account for nearly $1 trillion in annual sales.

When asked about their overall strategy for 2018, many
executives cited better management of omnichannel com-
merce as a top priority. Although a small “lagging” group of
retailers are still rolling out basic omnichannel capabilities,
companies that can be described as “leaders”—generally,
the biggest brand names—are looking at refining the omni-
channel strategies and practices they already have in place,
such as cutting delivery times to consumers and ensuring
service consistency across all channels. Those companies,
the researchers say, have come a long way since their pre-
vious survey report was published. “Last year, we were still
getting a lot of companies wondering how to respond to the
‘Amazon effect.’ Now, retail leaders have taken control of
their omnichannel operations and have a game plan they’re
ready to execute,” Defee says.

The interviews with retail supply chain executives also zeroed in on several specific areas, including urban fulfillment, relationships with third-party logistics service providers (3PLs), sustainability, and disruptive technologies.

Here is the research team’s take on the issues and trends the interviewees addressed.

b Managing urban fulfillment. As the array of products consumers order online continues to expand, urban fulfillment has become a major concern for an increasingly wide range of retail segments. But retailers are being cautious about the delivery services they offer. Some interviewees said they would “move as fast on [urban delivery services] as [their] customers demand it,” Gibson says. In other words, they are investing in various delivery options only when demand is sufficient and the cost of providing those services can be justified. One surprise: Although many people assume that urban delivery only matters in a few big markets like New York City and Los Angeles, respondents said they were working to meet rapidly growing demand for same-day and next-day delivery in dozens of other urban markets across the country.

Increasingly, retailers are using urban stores as fulfillment locations to accommodate their “BOPIS”—buy online, pick up in store—services. Some are also invest-