Traditional supply chains are a thing of the past. Today, retailers must be ready to handle the data supply chain of the future – one that is based on increasing demands from consumers. Amazon has raised the bar for customer expectations; now, consumers demand a wide range of products to be available and expect deliveries to be faster. When consumers have no visibility over when their orders will turn up, they will go elsewhere.
Out of stock items and slow delivery speed are no longer acceptable to keep up with consumers’ demands and expectations
We are currently on an exponential curve of change in the retail sector, and the impact on the supply chain is significant. Existing systems are not fit for purpose. Out of stock items and slow delivery speed are no longer acceptable to keep up with consumers’ demands and expectations. Here we outline five tips for retailers to adapt their supply chains to ensure they can compete in today’s competitive retail environment.
Convenience is at the centre of all this, and it is arguably more important than the product itself. Consumers are now valuing and prioritising convenience, ease and availability. As a result, retailers need to establish better supply chain management methods, such as ‘dropshipping’ (where a store does not keep products in stock but transfers customer orders to a third party), click and collect and next or same day delivery services in order to keep pace with consumers’ ever-increasing demands.
In a new survey, 72 percent of consumers said they want retailers to have full supply chain visibility so they always know where their product is. Establishing these functions is critical for retailers, as customers now want unlimited choice, speed and visibility over orders. Generally, customers now lack loyalty and tend to be incredibly fickle, so getting this right is key.
Provide an omni-channel presence
Retailers are all striving to provide a unified omni-channel presence, where customers can have same the experience regardless of what device they are using and whether the product is coming from a marketplace, ‘dropship’ or directly from the brand itself.
Consumers will now migrate across different channels. In many cases, consumers will do their research in store where they can have a physical experience, and then they will go online to buy that product from the same retailer or marketplace.
Stay in the physical fight
E-commerce giants are increasingly turning to the physical world. Clearly, all retailers have to have some degree of coverage in different channels, whether those channels are in the ascendancy or in decline. We have heard a lot about traditional brick-and-mortar retailers trying to establish online channels, but concurrently, online giants are trying to establish a presence in traditional brick-and-mortar retailing. In July, Amazon announced it was going to publish a holiday toy catalogue to be mailed to millions of households in the US shortly after its $13.7bn (€11.8bn) purchase of Whole Foods.
Despite the emergence of smartphones, children still enjoy searching through toy catalogues, and toys, particularly during Christmas, attract shoppers. Amazon recognises that there are many routes to the market within the omni-channel world we live in. While the catalogue is a declining channel, it is still currently big enough to be relatively interesting to Amazon as it looks to consolidate its grip on the market.
Effectively manage data
If traditional retailers want to compete with Amazon, which is adding 1.3 million products on a daily basis, then the existing methods they use to add products to their systems and platforms has to change.
Often encumbered with legacy systems, retailers need an army of admin staff to upload products, check the product description and physically manage supplier spreadsheets. This is not a scalable and sustainable way to do business.
Speed to market, or the time it takes to get a manufacturer’s product selling on a retailer’s website, is crucial. Entering data manually can create a time lag that represents millions in lost sales. At the same time, trying to rush a broken process can lead to poor data being processed.
Product lifecycle management should be automated so retailers can sell more products and ensure that the product data is accurate to improve the customer experience.
Understand the tech ecosystem
The battlefield isn’t just against online pure plays – technology will also influence and enrich the omni-channel experience. New stores will aim to use radio-frequency identification and augmented reality technologies.
Retailers must think about the architecture of a technology ecosystem that creates best-in-class solutions for their varied and changing requirements. Additionally, they should not solely rely on internal IT team to build solutions in house – there is simply is not the time to do this. Within the retailer, the business must work in collaboration with the internal IT department to ensure that the ecosystem is right and can be managed properly. There is often an ‘us and them’ mentality between these divisions that must be bridged in order to redefine how technology delivers solutions to the new demands imposed by the consumer.
Getting this right is crucial – the dynamics in retail are changing at an unprecedented rate and those who are not reacting to the data revolution are paying a heavy price.
Retailers need to have the necessary adaptability to respond rapidly to market trends and consumer behaviour. The ones that are succeeding in meeting customer demands tend to have the greatest agility, visibility and scalability across their supply chain.