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Digital Transformation for Retail Supply Chain

No one saw the pandemic coming. Retail businesses could not forecast what it could mean to their supply chain operations. So many supply chains experienced pressure, which exposed loopholes and serious shortcomings. Most retailers thought they had plenty of time to fix challenges while shifting to eCommerce. As per McKinsey research, the pandemic forced 10 years of growth in only 3 short months.

As we try to gain our footing through the pandemic and the way consumers shop changes, it’s clear supply chain operations can be a big differentiator for retail businesses. It really helps to create value for businesses and their customers. However, you have to enable your supply chain digitally to meet today’s customer expectations.

For example, consumers compare lots of different shipping options before making a purchase. They look for the best available deal. According to Salesforce, nearly 60% consumers are willing to switch to a competitor who has quicker and cheaper shipping.

On an ecommerce site, the sale doesn’t end at checkout. Retailers need to deliver the product to the consumer’s doorstep as promised. A negative shipping experience such as delays or poor package handling can severely harm your reputation. According to Shipstation, 83% of consumers are less likely to purchase from a retailer again after a bad shipping experience.

Unsatisfied consumers will leave a negative review or post on their social media accounts about their ill experience. Your brand can go under quickly.

Most retailers struggle meeting consumer’s expectations, infact 95% of companies have experienced delays in their order fulfillment process. Nearly half faced issues with order picking and handling, while more than a third struggled with effective inventory management.

Digital Transformation Benefits for Retail

Warehouse operators are preparing to meet order fulfillment and delivery challenges head-on. They are investing in new technologies and digitizing their processes so their supply chains can meet ecommerce demand hikes. Just like any digital transformation process, you must adopt a new mindset rather than fancy systems. You don’t just need technology that works or upgraded order fulfillment technology. You also have to improve inventory management and delivery management capabilities.

When done right, here are the main benefits of a digitally transformed supply chain:

Speedy Delivery

Consumers do not prefer to wait longer to receive a product. They look for options that deliver products faster at a cheaper rate. Consumer’s expectations are increasingly rising on shipping times. Previously, 4-5 days or even 10-15 days was acceptable. Now, it is the same day, next day or a two-day free shipping. These high expectations are creating one of the biggest impacts in the ecommerce industry.

According to My Total Retail, when a company does not offer same-day delivery, one-third of consumers feel frustrated. 74% consumers are more likely to re-purchase if they receive same-day delivery. To make this kind of delivery happen, retailers need digitally automated workflows and strategic inventory management. A tight, well-synchronized integration between your eCommerce platform and order management systems can sync new orders in time to pick and pack for next-day delivery.

Omnichannel Fulfilment

To make the deliveries quick, retailers typically offer consumers different shipping options like Buy Online, Pick Up Instore (BOPIS), curb-side delivery or a local pick up location.

According to Business Insider, 68% of consumers have made multiple purchases with BOPIS. The benefits of BOPIS include shipping cost savings, speedy delivery and convenience. You can successfully implement BOPIS by integrating eCommerce operations with brick-and-mortar operations to give customers a smooth shopping experience.

Real-time Inventory

Seamless, integrated supply chain operations require a single view of inventory across multiple sales points. These may include external agencies acting as sales partners. A holistic view provides a clear picture of your most accurate inventory levels at any given moment. This means better customer satisfaction as the correct product availability will display and decrease disappointed customers.

Real-time inventory visibility lets you strategically move inventory and avoid stock-outs before they happen. This optimizes overall costs and boosts revenue.

Lower Costs with Improved Shipping Services

As all selling happens via ecommerce channels, retailers must pay higher costs for transportation, warehousing, inventory storage, and packaging and material expenses.

Try these advanced technologies to lower costs.

  • Automatically assign order fulfillment centers by calculating the delivery location and associated costs
  • Automatic order routing to most efficient supplier
  • Reduce or eliminate late/wrong shipments
  • Automated splitting of orders to multiple fulfillment centers
  • Accurate demand forecast to maintain the right amount of inventory

Build Resilient Supply Chains

Unexpected challenges always cause problems in the supply chain. We witnessed this during the pandemic. Other unknown challenges can include political events, natural disasters, transportation failures, new competitors, and cyber attacks.

Adopting the right technology early, recruiting good people and implementing new processes can help a business prepare for the future. Retailers need to build resilience to prepare for new challenges.

Digital transformation will not happen overnight. All businesses and supply chains are unique. There is no shortcut so finding professional help to navigate your digital transformation is key to reducing the headaches and increasing sales.


12 Oct, 2021

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