IDC releases Top 10 Predictions for 2014, signals omni-channel surge

Retailers expected to pursue real-time capabilities for customized, personalized and localized customer service.
By Josh Bond, Associate Editor
January 29, 2014 - MMH Editorial

Market research and consulting firm IDC Retail Insights has released its annual list of predictions for the coming year, nearly all of which center on the rapid impact of omni-channel fulfillment on supply chains.

Among the predictions is an estimate that by 2016, 50% of national retailers will invest in distributed order management (DOM), enterprise inventory visibility, and workforce management to enable same-day fulfillment.

“This is a transformation requiring changes to business processes, company culture and customer orientation. It is not an overnight event,” said Leslie Hand, research director for IDC Retail Insights, in a recent interview. “That said, it’s been a long time since I’ve talked to a retailer who isn’t on the path to omni-channel capabilities.”

Hand estimated roughly 10% of retailers have been on the onmi-channel journey for three years or more. These are the businesses at what she called the intermediate level, and the rest are still at the beginner level. There are perhaps only a dozen businesses who have reached optimal maturity of omni-channel capabilities, but none have reached what Hand termed the ultimate level. “Is anyone addressing the consumer’s needs in a completely customized, personalized, localized way?” she asked. “No. There might not even be a finish line in that regard.”

For now, the industry is working to shed old habits and adopt solutions that will grant them the planning, fulfillment, supply chain execution and last-mile distribution capabilities they will need going forward. “Planning cycles and processes have been rigid for a long time,” said Hand. “Businesses are used to running monthly reports and planning promotions eight weeks or more in advance. Those cycle times need to change to stay responsive to consumers.”

Already, 30% of retailers have invested in DOM capabilities, which replace the traditional linear flow of product from production to point of sale with cross-channel functionality based on real-time inventory visibility. Hand said she expects 2014 to be a big year for DOM investments as they work toward the 50% saturation predicted for 2016.

“The need for real-time response in terms of product availability, inventory location, services and mass personalization is creating complexity around serving the customer,” Hand said. “It used to be good enough to drive products to the store and let the customer buy whatever you had. The new dynamic forces retailers to look at stores differently, more as a supply chain node. If I never want to say no to my consumer, then I need visibility to all products and where they might be stored.”

The IDC Retail Insights Top 10 Predictions for 2014
Prediction 1 - In 2014, fast-followers will chase the 50 global retailers already transforming store, mobile, and e-commerce channels, supply chains, merchandising, and marketing for the omni-channel customer experience.
Prediction 2 - Business transformation will drive ERP, core merchandising, FAR, and planning investment to a 9% compound annual growth rate (CAGR) through 2015.
Prediction 3 - By 2016, leading retailers will improve same-shopper sales with immersive commerce driving additional revenue growth of 1.5% and margin growth of an additional 3%.
Prediction 4 - By 2017, marketing and advertising technology investment will increase by 50%.
Prediction 5 - Retailers will narrow and enable big data and analytics (BDA) projects in 2014 as 20%-30% of projects fell short in 2013.
Prediction 6 - Emerging consumer privacy concerns will force 50% of early adopters to revisit hyper-personalized promotions by 2015.
Prediction 7 - E-commerce and store platform replacements that enable mobile, integrated, and interactive experiences will support a 10% CAGR in commerce investment through 2017.
Prediction 8 - As product assortment refresh cycles quicken, 25% of mid-sized retailers will initiate new product lifecycle management (PLM) or sourcing projects in 2014.
Prediction 9 - Retailers will double the rate of industry supply chain investments in 2014, as compared to 2013.
Prediction 10 - By 2016, 50% of national retailers will invest in distributed order management, enterprise inventory visibility, and workforce management to enable same day fulfillment.

An audio replay of the web conference where analysts discussed the predictions is available here.

null



About the Author

image
Josh Bond
Associate Editor

Josh Bond is an associate editor to Modern. Josh was formerly Modern’s lift truck columnist and contributing editor, has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The 'Internet of Things' or IoT is a term that has rapidly taken center stage in business and consumer technology circles, with tremendous amounts of hype in both. Don't be distracted if some of the hypothetical consumer examples of the IoT seem far-fetched; the trend has serious implications for businesses. This complimentary whitepaper takes a look at some of the opportunities afforded by the Internet of Business Things.

Of special interest to readers of Logistics Management will be “Americas Update,” which will look into the future of the market in the Americas and assess how firms will be able to favorably position themselves to compete and win market share.

After 20 years, two congressional mandates and countless lawsuits and lobbying efforts, safety advocates and the Teamsters union still say there are too many inexperienced rookie truck drivers hitting the road without sufficient behind-the-wheel training.

Congested U.S. port terminals, harbor and over-the-road truck and driver shortages, slower trains and longer rail terminal dwell times due to increased domestic rates have not only disrupted service but also driven intermodal rates and cargo handling costs up sharply.

Southern California shippers are getting a break on container dwell expenses for the next ten days as the Port of Long Beach announced that it had added an extra three days to the time that overseas import containers can remain on the docks without charge.

About the Author

Josh Bond, Associate Editor
Josh Bond is an associate editor to Modern. Josh was formerly Modern’s lift truck columnist and contributing editor, has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce. Contact Josh Bond

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA