Like those first-day outfits or that must-have laptop, “omnichannel” is a hot commodity in retail. As retailers look to create a unified selling front to consumers whether they're in-store, online or on their smartphone, they must simultaneously reinvent their supply chains, which have historically been optimized for brick-and-mortar. To capitalize on the combination of back to school plus omnichannel, leading retailers are turning to the ABCs of a next-generation supply chain: agility, better visibility and a closed-loop customer experience.
A for Agility: Prerequisite
In an online business, the supply chain is one of the few places where retailers can make a measurable difference to the customer. With less revenue from traditional store channels, supply chain agility is crucial. Seasonal demands like back to school underscore the requirement for flexibility and speed, especially given hard-to-miss promotions throughout a seasonal cycle. The challenge for many is that retail supply chains have been optimized for lower cost and not necessarily responsiveness.
Purchase price, however, has become table stakes with omnichannel. Customers will pay for value-added services and place their loyalty with retailers that deliver with excellence. For example, next- and same-day delivery choice continues to drive many retail markets. This dictates that supply chains are much more streamlined. While keeping supply chain costs down is critical, retailers today must find ways to improve service and, more importantly, to use service to drive sales and generate services-based revenues.
Retail innovators are also looking to integration and supplier and carrier performance in the quest for greater supply chain agility. They're evaluating better information sharing, more dynamic transportation strategies and retail-ready labeling to help accelerate goods through the network. For manufacturers and distributors, the opportunity lies in evaluating their own supply chain to see how to help lower the cost of the retailer’s supply chain, improve their service and deliver their value-added services.
B for Better Visibility: Required
Despite the best laid plans, the flow of products from suppliers too often fails to match retailers’ requested quantities or delivery dates. During back-to-school season, this can be an acute problem. To be on time and know exactly what's arriving, retailers, suppliers and carriers need to collaborate during the end-to-end shipment execution process. Information visibility is critical to ensuring reliable operations.
This form of collaborative execution spans the entire purchase order (PO) to distribution center dock door process. Inventory/shipments are planned and maintained in one place and “pulled” to a logistics chainwide synchronized delivery appointment. Therefore, all parties participate in a unifying process with a single goal using technology that provides PO/shipment visibility. POs can then be appropriately consolidated in advance and appointments prescheduled with confidence that the retailer will accept them upon delivery. Changes made by any party can be instantly assessed and shared.
Better visibility changes how retailers communicate and manage rapidly evolving PO priorities with suppliers and in-transit goods. During back to school, retailers can leverage this concept to reprioritize goods in transit and to shift up deliveries for those No. 2 pencils that are flying off the shelves and need replenishment. Without a unifying process supported by technology, this level of coordination to meet consumer demand is impossible.
C for Closed-Loop Customer Experience: Extra Credit
Consumers want to engage with retailers more than ever. This presents an excellent opportunity for supply chains to add value to the overall back-to-school customer experience. There are five basic steps in the order life cycle where supply chain information plays an important part of the overall customer experience:
- Confirm: Capture the customer
- Notify: Minimize non/late deliveries
- Track: Manage delivery disruptions
- Deliver: Document delivery
- Survey: Measure the experience
Using supply chain information interactively with the customer throughout the order life cycle creates a closed-loop customer experience.
Supply chain and related technology advances are making the closed-loop customer engagement strategy more possible than ever. Delivery booking and optimization technologies used during the ordering process provide the tight time windows customers expect. GPS-enabled tracking tied to real-time location and dispatching systems provide up-to-the-minute status and ETA calculations. Smartphones with scanning, signature and picture capture document what happens at the customer’s location. Surveys help companies gauge the success or failure of the delivery experience. Notifications technology, which itself has gone omnichannel, brings this all together for the consumer, as retailers can interact with their customers through a variety of mediums, including text messaging, mobile or web applications, and automated voice.
Whether back-to-school consumers are ahead of the game or facing a last-minute rush after Labor Day, technology is available now to help retailers cost effectively enhance their omnichannel capabilities and differentiate themselves.
If you’re a retailer, does your supply chain make the grade for:
- Better visibility?
- Closed-loop customer experience?
In an omnichannel world, how retailers reinvent their traditional supply chains will become a valuable indicator in scoring their overall business health and success.
Jason Read is the vice president of applications consulting at Descartes, a provider of on-demand, SaaS solutions for logistics-intensive businesses.