Each time Essential Retail talks to a retailer the phrase "omnichannel" tends to crop up at some point in the conversation, with businesses citing it as the approach they must take to meet the needs of today's demanding and multiple-device-using shopper.

It seems to be a case of industry players talking about the concept, but very few practicing what they preach by actually setting up their supply chains to deliver the desired seamless service across each shopping channel.

There are various reasons for this: one being the advent of technology in the hands of consumers has moved at such a rapid rate that retailers have been unable to keep up with the pace.

As retail businesses appeared to be dealing with the concept of eCommerce as a side-line to their stores, they were hit by the emergence of mobile, social and other cross-breed product order channels which has put pressure on their inventory management systems. And that's not to mention the changing requirements when it comes to fulfilment of the products, with shoppers now expecting a multitude of pick-up and delivery options wherever they order an item.

Brian Hume, founder and managing director of retail consulting business Martec International, said that despite the talk and the investment that has already gone into developing transactional websites, the majority of UK retailers are yet to start on their omnichannel journeys.

"There are a number of retailers that have implemented things like click & collect, but there are only a few pioneers that have started to use data captured in one channel to improve performance in other channels and very few have a single view of the customer," he explained.

"Many cannot connect store transactions with online transactions for the same consumer. Many use all sorts of work-arounds to compensate for the fact that they do not have a single view of inventory, or inventory records that are accurate enough to service click & collect orders from store inventories."

Despite the seemingly long journey ahead, Hume suggested things will change in the coming 12 months as some of the larger players embark on new projects free from the financial shackles created by the recent recession.

It is against this backdrop that US inventory and supply chain solutions business 4R Systems launched in the UK market, in September. The Pennsylvania-based company hosted its Elevate Symposium at St Ermin's Hotel in central London, where UK retailers were in attendance to hear about the organisation's scientific approach to omnichannel inventory management.

The company was founded in 1999 by Wharton School professor Dr Marshall Fisher and Dr Ananth Raman of Harvard Business School, who created a specific algorithm to forecast the most profitable way of managing inventory, simply by analysing early sales data. By assessing stock levels and managing forecasting and replenishment planning data, 4R says it can help retailers identify "true north" in terms of profitability potential.

4R co-founder and Wharton School professor, Dr Marshall Fisher, addresses delegates at the 4R event in London

CEO and president of 4R, Kevin Stadler, whose career in retail technology to date has seen him hold senior roles at the likes of Pricer, JDA Software and SAP-owned SAF-USA, said that the time is right to bring its services to the UK because retailers require support in achieving their complicated omnichannel targets.

"Going omnichannel provides great opportunity for retailers to create more powerful customer experiences," he argued.

"Better customer experiences means more revenue. Disjointed channels result in lower profit and are inefficient for retailers from a management standpoint. We can help UK retailers address the demands of managing omnichannel without adding staff and provide a dramatic increase in revenue."

Although businesses operating in the industry typically recognise that data management is critical in modern retailing, some of the future-gazing notions expressed by Dixons-Carphone CEO Sebastian James at this year's British Retail Consortium Annual Retail Lecture were not necessarily accepted by the wider sector.

James spoke about his expectation that retailing will become increasingly mathematical, where analysts and PhD-level marketing executives might be able to assess consumers' digital footprints to predict what they want to buy before they even know it themselves, but some of the mid to large retailers at the event said they were more concerned with everyday operations to even consider this advanced level of thinking.

Stadler and 4R's argument is that the analytics-driven approach to retail can actually help companies succeed with their fundamental business processes. Indeed, the company's founders established the Consortium for Operational Excellence in Retailing, which highlights their close links with the industry.

"Analytics are no longer fancy science, but a powerful way to make better informed inventory decisions," said Stadler.

"4R's solution removes much of the day-to-day supply chain challenges and decisions, because omnichannel inventory decisions are based on our proven algorithm rather than guesswork or costly trial and error."

Martec's Hume, for one, expects 4R's approach to be welcomed by the UK retailing community, saying: "In this case, the founders of 4R have published the key ideas in their book [The New Science of Retailing: How Analytics are Transforming the Supply Chain and Improving Performance], and they will explain it to potential customers.

"Hence potential customers can understand what their solution will do in enough depth to grasp it."

Brian Hume, founder of Martec International, presented at the 4R event in London last month

Among the North American retailers that have bought into what 4R has to offer is Vitamin Shoppe. The 650-store retailer, which sells vitamins, supplements and health products, and is similar to Holland & Barrett in the UK, spoke at the London event about its increased profit and some of the key strategic benefits it has experienced since implementing 4R’s omnichannel inventory solution.

Vitamin Shoppe has spent a lot of time over recent years on improving inventory accuracy and it considers 4R a key partner in reducing its store out-of-stocks, decreasing distribution centre-to-store lead times and general financial planning. The retailer meets weekly with 4R, where challenges are discussed and improvements to their relationship are made.

Jason Scheffer, vice-president of inventory and transportation at Vitamin Shoppe, said: "The 4R solution delivers profit-optimised inventory targets at the individual store SKU level, the ability to incorporate supply chain improvements and other business changes quickly into the model, key reporting to assist in running the business and a team of inventory experts to tackle inventory challenges. 

"Combining all of these components together allows for a scalable solution to support growth, while maximising profit."

At a time when retailers are finding it increasingly necessary to recruit analytical experts and data crunchers into their businesses, a partnership with 4R may be welcomed by the companies that would rather focus their attentions on other operational issues. Tier-one and tier-two retailers can increase profits by outsourcing this big data management to 4R, without increasing staff. 4R attests one of its retail clients require a team of only three people to support more than 55 million store re-order points generated every week.

"This allows us to focus our resources on driving improvements throughout the business that a system cannot drive, such as vendor performance," Scheffer noted.

"In addition, we gain the analytical expertise and knowledge from a team of 4R experts that works with many clients enabling them to bring creative solutions back to the Vitamin Shoppe for implementation."

Many of the inventory and forecasting issues the US retailer has looked to address over the last few years will ring true with companies operating on the opposite side of the Atlantic.

Research published at the start of 2014 commissioned by Tata Consultancy Services found that global retail CIOs understand that they are not maximising the full value of the data they have at their disposal, with less than half of the 192 global business leaders who were questioned saying they had invested in cross-channel analytics.

Investing in big data to support customer service was a key target for a quarter of respondents, and there has been further evidence throughout the year to suggest supply chain efficiencies are at the heart of many retailers' strategic planning.

"We believe that all retailers have supply chain improvements as one of their top three objectives, which is pretty much how it has been in retail for many years," Hume remarked.

"Most retailers are permanently overstocked but also have availability issues at the same time. The starting point for some companies is to build well-researched merchandise and range or assortment plans and then to buy according to those plans and mange in-season performance as proactively as they can.

"For others, there is much more foundation work to do before they can provide a planning system with the quality of data needed to produce good plans."

With 4R entering the market from the US, there is now one more vendor promising to help UK retailers along the way.

4R Systems will be exhibiting at RBTE for the first time in 2015. Visitors to the event, which will take place at London's Olympia between 10-11 March, can meet with 4R at Stand 510.

Click below for more information:

4R Systems