T he retail industry is in the midst of a cataclysmic shift fueled by omnichannel activity, competitive realities, and changing shopper demands. Disruptors like
Amazon, Netflix, and Google are at the center of this retail
sector upheaval. They have significantly upped the stakes
in the battle for shoppers’ wallets and are gaining traction.
Online sales represented just 7. 5 percent of total U.S. retail
sales for the quarter ending December 31, 2015, yet they
accounted for 66.4 percent of total retail sales growth for
the year. 1
Industry pundits point to this data and sound the death
knell for traditional retailers. However, battle-tested tra-
ditional retailers are not giving up. Reminiscent of the
famous scene in the film Monty Python and the Holy Grail,
the retailers are responding, “I’m not dead” and “I’m get-
ting better” to the naysayers who claim, “you’ll be stone
dead in a moment.”
How can retailers make good on their assertions that they
will not only survive but will also thrive in this hypercom-
petitive environment? The ability to profitably compete
across channels with the right mix of product, price, and
service is paramount. As these channels grow more complex
and time-sensitive, highly capable and agile supply chains
are essential. Thus, it should be no surprise that major
retailers—Amazon included—are giving supply chain lead-
ers a prime seat at the strategic planning table as well as
significant capital for improving fulfillment capabilities.
The theme of greater dependence on supply chain management as a success driver permeated our conversations
with retail executives for the “6th Annual State of the
Retail Supply Chain Report.” This year’s study, conducted
in conjunction with our partners at the Retail Industry
Leaders Association (RILA), the software firm Checkpoint
Systems, and Supply Chain Quarterly’s sister publication,
DC Velocity, highlights the retail supply chain strategies,
spending, and best-in-class capabilities that underpin cus-
Traditional retailers are focusing on four
priorities—two strategic, two tactical—to
help them survive and thrive in an industry
that is experiencing long-term disruption.
BY RAFAY ISHFAQ, BRIAN J. GIBSON, AND C. CLIFFORD DEFEE
How retailers are getting ready
for an omnichannel world
“Most of us have run supply chains before, but we didn’t need this
level of agility—real-time, hour-by-hour decision-making kind of
stuff. It’s a new world in which most of us are having to compete.”
