Omni-Channel Retailing and Its Requirements in the Supply Chain

Bachelor Thesis from the year 2014 in the subject Business economics - Supply, Production, Logistics, grade: 1,1, IE Business School, Madrid, course: Production & Supply Chain Management, language: English, abstract: This thesis is a description of the state of the art of the Omnichannel retail strategy with a focus on the changes necessary in supply chain design.

Its purpose is to provide a comprehensive overview on omnichannel retailing that can serve as a first source of information for companies thinking about adapting this strategy. There is no single external source that combines the description of omnichannel retailing with details of how to implement this strategy yet, so this thesis makes it significantly easier for retailers to familiarize with the topic and get impulses for further research.

The introduction shows the developments that led to the strategic move, which eases understanding the concept and its purpose. The thesis finds that technological innovations, changing shopping behavior, increasing expectations, and intensifying online competition were the major drivers affecting this shift.

It continues to describe the common omnichannel initiatives before it gets into more detail on what supply chain and logistics changes are necessary to support them.

First, it shows that the application of RFID technology and IT platforms creates an end-to-end transparent supply chain, which delivers the core capability to pursue this strategy: complete inventory visibility. Second, the solutions to improve fulfillment speed are presented. Both upgrades in order processing inside the warehouse and innovative last mile
solutions are discussed in detail.

Describing the benefits of omnichannel retailing, the paper shows that it perfectly meets the requirements of today's retailers. Not only does the strategy improve profitability and
productivity, it also helps them meet expectations, learn more about their customers and use this knowledge to sustainably compete in the market.

It also finds that there are significant challenges to overcome before reaping these benefits. Large investments and added complexity need to be faced during setup and a non-aligned organization and the inability to engage employees are major problems during execution.

As the retail environment evolves at a rapid pace, the paper finally presents strategies for companies that have fully developed omnichannel capabilities. These ensure that retailers can also compete once omnichannel is the new normal.