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Supply chain executives from the nation鈥檚 leading retailers are increasing investments in technology, systems development, process improvement, and brand building connected to the digital realm 鈥� and with good reason. Their survival may hang in the balance.

As researchers from Auburn University鈥檚  noted in the seventh annual State of the Retail Supply Chain report (available upon request), companies are 鈥渆xperiencing the largest shake out in the retail industry ever.鈥� The report explores strategies being pursued by retailers with annual revenues exceeding $1 billion. Supply chain executives from 76 companies, including 22 of the nation鈥檚 top 100 retailers, participated in the study. Walmart, The Home Depot, Target, Lowe鈥檚, Kohl鈥檚, JC Penney, Belk and Kroger are among the top retailers providing insights.

鈥淎dapting to the hyper-competitive landscape requires supply chain capabilities that attract customers and grow the business,鈥� said Brian Gibson, Executive Director of Auburn University's Center for Supply Chain Innovation and Wilson Family Professor in the Raymond J. 91看片.

Gibson and fellow 91看片 College faculty members Cliff Defee and Rafay Ishfaq conducted interviews with 23 retail supply chain experts. Those interviews, as well as an online survey of executives, revealed the following changes in retail supply chain investments and strategies from 2016 to 2017:

• 63 percent of executives have increased investments in supply chain process improvement
• 55 percent have increased investments in 鈥渙mnichannel鈥� fulfillment (omnichannel refers to the seamless shopping experience between online and telephone shopping and a bricks and mortar store) 
• 54 percent have increased investments in technology
• 43 percent are pursuing integration across customer service channels
• 35 percent believe they have achieved integration across all customer service channels

Executives also weighed in on hot topics like labor costs, urban fulfillment centers, and blockchain 鈥� a distributed database that can help retailers respond more nimbly to such issues as product recalls.

The study found that many retailers are still attempting to consolidate operations into a 鈥渦nified, omnichannel supply chain,鈥� which allows for more nimble control of pricing, inventory management, sales, and order fulfillment. As one executive noted, 鈥淚t doesn鈥檛 really matter where the consumer buys it or where they order it from. It鈥檚 how do we get it to them in a consistent, efficient and timely manner based on their expectations.鈥�

Increasingly, it seems the 鈥渨here鈥� involves a website or mobile app. More than 8,600 retail stores will close by the end of 2017 as shoppers continue to browse and buy goods online. Shopping mall mainstays like Macy鈥檚, Sears, JC Penney, Payless, and Chico鈥檚 have announced numerous store closures in recent months. Even the once-iconic Sears Holding Corp. reported in a March Securities and Exchange Commission filing that 鈥渟ubstantial doubt exists鈥� over its survival prospects.

Credit Suisse recently predicted that between 20 and 25 percent of the nation鈥檚 shopping malls will close in the next five years. E-commerce giant Amazon鈥檚 acquisition of Whole Foods and efforts to expand its Prime membership program through a try-and-buy approach to apparel place even more pressure on retailers struggling to hold on to market share. 

As the Auburn researchers noted, this fuels a 鈥渞ace to the bottom鈥� trend. The minimum order value to guarantee free shipping drops, or free standard shipping is promised with every order, as retailers jockey for position against competitors. 鈥淭wo-day, free shipping is now table stakes,鈥� one executive stated in the report.

Only a handful of retailers have figured out how to serve today鈥檚 impulse-driven, 鈥渞ight now鈥� customers efficiently. For most, free shipping and two-day delivery strategies hurt the bottom line. Fewer than 10 percent of the companies involved in the study fully recover their omnichannel fulfillment costs, making it very difficult to maintain strong profit margins.

As retailers seek to find their footing amidst the turmoil, there is no single or simple solution. 鈥淪upply chain executives must integrate operations across multiple channels, use analytics to drive supply chain decisions, and monetize supply chain capabilities,鈥� Gibson noted. 鈥淥ur report covers these initiatives with extensive discussions and prescriptive strategies for success.鈥�

The State of the Retail Supply Chain study is produced in partnership with the  (RILA) and .