How Technology Can Alleviate Retail’s Globalization Challenges
The challenges retailers are facing in 2021 aren't simply regional anomalies. From the economic instability and demand volatility caused by the COVID-19 pandemic to sustainability concerns from rising levels of waste, these obstacles exist on a global scale and will only continue to evolve in the years to come. Finding the right answers requires an all-encompassing approach that unifies every step of the supply chain and front-end operations.
On the bright side, leveraging technology can foster exactly that. The past year has provided a series of lessons for retailers in the fashion and CPG industries. Above all, they're learning that the right investments in advanced technology solutions are a proactive way to develop the critical supply chain visibility and e-commerce flexibility needed to prosper in a global environment.
Streamlined Global Supply Chains
From 1990 to 2019, globalization rose from 39 percent to 58 percent of the global GDP. However, the pandemic, coupled with external factors like the U.S.-China Trade War, extreme weather events, and supplier disruptions, has exposed the structural problems of global supply chains. The importance for retailers to avoid being overly dependent on single-sourced supply chains has been further magnified. However, since globalization is here to stay, their focus should shift to building supply chain resilience that enables them to quickly detect, adapt to, and recover from unexpected disruptions.
How? By employing next-gen technology solutions like advanced analytics and artificial intelligence (AI) that provide data-driven insights for enhanced supply chain transparency. This way, retailers can further adapt to fluctuating demand, identify loopholes or gaps that cause disruptions, and diversify their sourcing with offshore, nearshore, and localized suppliers to align with locations of highest demand. These tactics will streamline the supply chain, giving front-end operations the means to preserve profits by preventing excess and depleted inventory levels that lead to lost sales, customer dissatisfaction and eco-harmful waste.
The pandemic also placed a spotlight on the importance of prioritizing e-commerce in a digital age. Consumers now expect seamless customer experiences online just as if they were shopping in-store. In 2019, before the pandemic began, global e-commerce sales had already surged to $29 trillion — and its prominence will continue to rise. With the new reality, retailers must ensure they have the bandwidth and capabilities to support e-commerce fulfillment on a global scale.
First, that means investing in robust (but simplified) e-commerce platforms that can withstand increasing global e-commerce demand. Machine learning, like the use of AI robots in macro-fulfillment centers, can help employees maintain consistent operational efficiency during periods of high demand. E-commerce should be versatile as well. The retail winners of the pandemic were those that fast-tracked omnichannel with flexible offerings like BOPIS and curbside pickup. Both are here to stay and should be treated as such.
As the world enters an upcoming post-pandemic environment, now is a make-or-break period for retailers to begin preparing for the future of globalization. It's time to view the future as an era of opportunity rather than an unknown entity. By embracing globalization and all that comes with it, companies can position themselves for growth and sustained success in the years to come, regardless of the challenges that arise.
Ronen Lazar is the CEO of INTURN, an enterprise solution that empowers brands to efficiently convert slow-moving and excess inventory into working capital.