Since the advent of e-commerce retailers have continued to adapt their supply chain strategies to meet the demands of selling in a wide range of environments. Product returns from impulse buys done directly on social media may be higher than from purchases done in-store adding layers of complexity as new channels are monitored and prioritised to maintain hard won margins.
Online marketplaces and multi-channel services such as ‘click and collect’ continue to grow as shown in a recent report by Advanced Supply Chain Group which found that 65% of retailers are selling through more channels than they did five years ago with 71% expecting to sell through even more over the next five years. The agility demonstrated by retailers throughout the pandemic will be tested once again with the reopening of shops to consumers whose habits may have changed long term.
Macro changes in customer behaviour with new sales channels will be amplified by the recent disruption seen on the high street. This could lead to an acceptance of inevitability when it comes to growth and mistakes leading to an unnecessary impact on revenue. An optimised supply chain can completely mitigate potential errors when dealing with hard to predict circumstances by rebalancing the dynamic between management and technology.
- 53% of retailers said that selling through more channels creates stock management challenges
- 35% have experienced overselling and out of stock situations
- 26% report stock problems negatively affecting customer service and satisfaction
- 50% plan to invest to solve problems of selling through more channels
Claire Webb, managing director of Advanced Supply Chain Group, commented: “Retail sales growth often means more products, places, processes and people are added to supply chains. Without the right strategies and systems, this can jeopardise supply chain integrity and efficiencies, as greater scale can heighten the potential for errors.
“It’s easy to think that the answer to increasing scale and driving efficiency is more automated processes that can reduce the scope for human error. This isn’t the case. There’s much more to managing a growing supply chain than handling higher volume. Increasing scale requires integrated, agile and bespoke strategies and technology that all understand the complexities and variables of all the different parts of the supply chain. This will provide retailers with a control tower view of the supply chain, which covers right from the start of each of the sales channels, back to the sources of supply. It ensures that the right data, in the right format, moves to the correct part of the supply chain at the right time to effectively control stock flow and forecasting. It also allows for a level of human intelligence, involvement and intervention that can better manage uncertainty and unpredictability, which is critical when dealing with unforeseen events.”
A hands on approach to supply chain management can quickly respond to changes that will be seen later this year as restrictions are lifted. This will in turn lead to a faster turnaround time when it comes to implementing automated systems. While retailers plan to service more sales channels it is yet to be seen how customers will behave after an extended amount of time in lockdown. Customers buying online for the first time and digital natives starting to make regular purchases on platforms like Facebook and Instagram are just a couple of recent trends that have impacted supply chain management.
Retailers are preparing their supply chains to meet the demand of shoppers as the doors on the high street are opened to them once more. The opening of stores and general ease of restrictions on April 12th saw a surge of shoppers return to the high street creating a sharp rise in sales, but with few certainties available to both consumers and retailers an acceptance of increased losses due to errors doesn’t have to be factored into a supply chain strategy. Best practices developed by those who have already adapted to the complexities of multi-channel selling will be well placed to deliver a seamless customer experience while maximising on the growth potential of changing consumer habits.