In an effort to upgrade their software platforms to keep up with the demands of omnichannel fulfillment, 63 percent of about 500 North American retailers plan to upgrade or replace their merchandise planning systems within two years, a new survey shows.
Most companies are changing their retail planning software systems because they aren't aligned with the rapidly changing omnichannel planning environment, according to the 2015 Merchandise Planning Survey conducted by Massachusetts-based Boston Retail Partners (BRP).
About 58 percent of respondents said that improving their data analytics capabilities is the main reason for the upgrades. This would represent a significant boost over their legacy planning applications that were installed during the late 1990s or early 2000s to manage retail business models that are nearing obsolescence, BRP said.
In the long term, 78 percent of retailers plan to have a unified commerce platform within five years. That achievement could mark a big change in the way e-commerce retailers do business, because 49 percent of respondents said they still maintain separate product inventories for each channel. These investments could also yield new opportunities for merchandise-planning software providers such as JDA Software Group Inc., Logility Inc., and SAS.
Whether companies are prepared for the wave of omnichannel business or not, the market will not wait for them. The survey showed that 85 percent of retailers expect an increase in 2016 e-commerce revenue over the previous year.
As that revenue grows, e-commerce companies are working hard to offer online shoppers a wide range of delivery options. The most popular "unified commerce services" currently implemented by respondents include: buy online, drop ship from vendor (51 percent); buy online, ship from store (40 percent); buy online, ship to store (36 percent); reserve online, pick up in store (27 percent); buy anywhere, ship anywhere (24 percent); and buy online, same-day delivery (14 percent).
"Unified Commerce enables transparency, or the 'glass pipeline,' of real-time visibility to inventory, product, and customer information," BRP principal Brian Brunk said in a statement announcing the findings. "This is the nirvana, or end-state, that many retailers are trying to achieve with their customer-experience and unified-commerce goals."
Survey respondents were primarily vice presidents or C-level executives at more than 500 specialty retail firms, comprising 45 percent in the specialty soft goods category, 26 percent in the specialty hard goods category, and the remainder in general merchandise, grocery, and other sectors.
Companies responding to the survey ranged widely in size, with 17 percent generating $100 million to $499 million in annual revenue, 26 percent between $500 million and $999 million, 29 percent between $1 billion and $4.99 billion, and the rest on either side.