Bridging Retail’s Digital Transformation Gap
Retailers are investing in impressive new technologies to enhance the customer experience. Nike’s flagship store in New York, House of Innovation, provides an innovative shopping experience in which shoppers can create customized products by making personal selections from a variety of different laces, fabrics and decals. When the customer has made their choices, they can confirm the order and make payment while still in-store, and later collect their goods from a personalized in-store locker — with the entire process executed directly from their smartphone!
Leading grocery delivery companies, including Walmart in the U.S. and Ocado in the U.K., have invested in autonomous robots that are deployed to collect groceries in automated warehouses, rapidly increasing the speed of order processing and customer delivery.
This extensive investment in customer-facing innovation is all about mastering the customer experience. To remain competitive, retailers have recognized the need to remodel the shopping experience to give consumers what they want — fast service and personalized experiences.
The Reluctance to Invest in Back-End Technology
Retailers are often not very proactive when it comes to investing in the supply chain. Gravity Supply Chain’s latest market research shows that just 15 percent of retailers in the U.S. and 14 percent in the U.K. have completed supply chain digitization projects. Total Retail’s 2018-2019 Retail Technology Report also found that retailers are more likely to invest in technology that customers can interact with in-store and online than they are likely to spend on behind-the-scenes solutions.
According to Bain & Company, retailers that implement digital technologies into their supply chains can cut costs by up to 30 percent while rapidly improving service levels in the short to medium term. Over a longer time frame, retailers can expect results to increase even further with retail cycle times being reduced by up to 60 percent.
Tangible Results Rely on Real-Time Data
When it comes to bridging the digital transformation gap, data is key. Traditionally, supply chain management has relied on different data sets that are siloed to reflect various business functions. When it comes to processing this data from a supply chain perspective, it’s a case of manually entering and moving data through different spreadsheets. This outdated way of operating is a lengthy process that increases the opportunity for human error to transpire and allows retailers to make decisions based only on past events instead of those occurring in real time within the supply chain.
Real-time data enables better decision making, allowing retailers to get the right products to the right customers at the right time since real-time visibility will enable retailers to react to trends quickly and overcome supply chain challenges or disruptions as they unfold.
The ability to act quickly increases speed to market and ensures stock levels are in line with demand. In turn, this reduces obsolete stock levels within the warehouse, minimizing the need for markdowns and helping to protect profitability.
One Platform to Deliver Real-Time Insights and Enhance CX
Enabling all of this requires one digital platform that allows retailers to connect and share information with supply chain partners quickly, easily and transparently.
In an age when consumers are connecting and sharing personal experiences on social media platforms, supply chain management is transforming. Retailers and supply chain partners are building stronger connections that improve the customer experience. This opportunity gets achieved by utilizing a digital platform that allows data to flow freely across the entire supply chain network.
Retailers that are solely focused on customer-facing innovations must also consider behind-the-scenes technologies. Without real-time supply chain visibility, customer experience will get undermined, no matter how much money gets invested in front-of-house technology.
Graham Parker is CEO of Gravity Supply Chain Solutions, a supply chain management software providing seamless and real-time end-to-end visibility.