Of all the challenges that have emerged as retail has evolved over the past decade—challenges such as knowing your customerand engaging your employees--trying to keep up with the impact to the supply chain has been the most difficult. You can update your sales forecast pretty quickly as conditions change. But sales is in the middle of a spiderweb and any changes to the forecast radiate outward, affecting inventory and the whole supply chain. This spiderweb has steadily expanded from just your network of bricks and mortar stores; to bricks and mortar plus online; to shop online pick up or return in store; shop in store return online; shop in store and have it shipped, shop on Amazon return to warehouse, shop in store pick up curbside etc.
Then came COVID, turning supply chain management into utter chaos, and making it crystal clear that the only way to manage the complexity and dynamism of the modern retail supply chain is with real time data and analytics.
COVID is an extreme situation, and it has given the central question facing the industry new urgency: How can retailers use data remain flexible and ready to pivot when necessary, in order to meet the customer where they are? That is inevitably a supply chain management question. Here are five things I think retailers need to do:
The next generation supply chain
The supply chain of the past was opaque and disconnected. A lot of companies were not leveraging technology. People were acting on disparate sources of information, causing chaos in the business. The ability to get data quickly was not there. External partners not connected into overall demand. Canceling goods or adjusting quantities was a manual process.
Too many retailers are still living in that world to some extent today. COVID should make it clear that you can’t afford to keep living in Excel world thinking that is going to work for your entire organization going forward. Change is happening faster than ever. Customer behavior is changing faster than ever.
The supply chain is so much more complicated and there are so many more data points. But we have the technology to have one central direct data platform where everybody can access shared information to better plan their part of the business. If you know online is up 100% and brick and mortar is closed, your return rate will be higher, and you can prepare for that. There’s opportunity to give partners access to sales forecast and keep them more connected; to be able to look at data daily, and to use external data to react more effectively to things we’ve always been aware of but couldn’t quantify or model—things such as weather; social media sentiment, and catastrophic events such as COVID.
COVID has accelerated our understanding of what the future of retail needs to look like. Life is forever changed. Shopping behavior is forever changed. The retail landscape is forever changed. Let’s not wait for the next extreme situation to adopt technology. Do it now, to support your customers, and your team.
Connie Walsh is Senior Director of Transformation Services at eCapital Advisors. She has extensive retail leadership experience across buying, planning, analytics, and operations. She loves to dive deep on opportunities that exist within companies and empower them to translate their data, using technology, to grow business and increase bottom line profitability.