Retailers slow to automate supply chain processes

Few U.S. retailers have fully digitized their supply chains, citing cost as the main barrier, according to a study from Gravity Supply Chain Solutions, released this week.

The study shows that 85 percent of retailers have yet to digitize their supply chains—meaning that they are using a cloud-based platform with real-time visibility and automation capabilities—despite agreeing that digitization is crucial to creating a seamless omnichannel experience. Without digitization, the study authors say, retailers must rely on manual processes that do not give them full control over their supply chain, risking the quality of the customer experience.

Study findings include:

• Just 15 percent of U.S. retailers have fully undergone digitization of the supply chain process;
• 60 percent of U.S. retailers say they see digitization as critical to creating seamless omnichannel retail experiences;
• At 46 percent, cost is cited by U.S. retailers as the largest barrier to digitization;
• Lower operation costs (44 percent), higher profit margins (40 percent) and customer experience (36 percent) are seen as the greatest benefits to digitizing by those yet to do so.

For retailers relying on manual supply chain management processes, cost is perceived to be the main roadblock to digitization. The study authors say this could be attributed to a fear of failing to deliver a return-on-investment considering that a further 29 percent of retailers cited the inability to justify cost as the greatest obstacle to supply chain digitization.

"Clearly, the supply chain is the final frontier of retail digitization, and while retailers are anxious about the cost, not moving from manual spreadsheet-based supply chain management towards digitized processes could cost them a whole lot more," Graham Parker, CEO of Gravity Supply Chain Solutions, said in a statement announcing the findings.

Retailers that have digitized their supply chains are reaping big benefits, the study shows. Better decision making is one key area: 76 percent of respondents that have digitized say they believe their organization has enough data and insight to make the right decisions about its supply chain. And more than 55 percent say that order tracking across all touchpoints has improved the customer experience while 53 percent say personalization of products has increased.

The Gravity Supply Chain Solutions study polled 500 retailers from the United States and the United Kingdom.