In the intensely competitive retail market, technology investments (or lack thereof) can make a company flourish or fail. Retail companies no longer compete against their peers – they compete against their peers’ entire supply chains. Today’s winning retailers and suppliers adopt technologies to modernize and intertwine their operations with those of their retail trading partners to serve shoppers better and faster.
The business case for transparency
Today’s savvy shoppers scrutinize the products they see on retail shelves and online. They want to know specific details about a product, including where the manufacturer sourced the ingredients, how they produced the goods and what retailers are doing to protect consumers’ well-being.
Consumer confidence depends upon supply chain transparency.
For instance, Whole Foods Markets has committed to providing GMO transparency for its customers by 2018. Meanwhile, manufacturers like Nestle differentiate themselves with food products free from allergens like peanuts.
Apparel retailer Everlane’s entire business model reflects supply chain transparency to prove its ethical labor practices. The company outlines the entire production costs of their products: materials, labor, duties and markup. They also share information, photos and videos on the factories in which products are made and their employees. Such visibility and authenticity help Everlane prove it has nothing to hide, which boosts brand trust.1 Retail Trends and Predictions 2017: 12 forecasts for the retail industry in 2017. Vend.
To achieve the transparency that consumers demand, retailers and suppliers must work together because companies (and supply chains) that “promote product quality, transparency and sustainability will flourish.”2 Retail Trends and Predictions 2017: 12 forecasts for the retail industry in 2017. Vend.
Technologies promote retail partnerships
The following tech trends help retail companies achieve superior transparency within their own organization and across their supply chain.
1. Big data analytics
Retail buyers are more sophisticated, analytical and demanding than ever. Here’s proof: Amazon employs more than 1,000 big data professionals and each of the top 10 U.S. retailers employs an average of 70 big data analysts.3Alldredge, Kari, Brandon Brown, and Max Magni. Playing catch-up: How to partner with the retailer of the future. McKinsey & Company. June 2016.
To make smarter business decisions based on facts, these retail companies measure and analyze data on category performance, assortment, pricing, promotions, operations, innovation, and shopper and consumer behavior.4Alldredge, Kari, Brandon Brown, and Max Magni. Playing catch-up: How to partner with the retailer of the future. McKinsey & Company. June 2016.
They also apply big data using predictive analytics, as retail buyers now expect suppliers to deliver store-specific, real-time insights tailored to their strategic priorities. For more powerful supply chain results, experts cite the need for “deeper and wider levels of customer, product, physical object, and supply network focused information visibility, capture and analysis… for more predictive, analytics data-driven decision making competencies that involve outside-in insights.”5Ferrari, Bob. Supply Chain Matters Unveils Ten 2017 Predictions for Industry and Global Supply Chains. Supply Chain Brief. January 6, 2017. This means operating alone is no longer an option; supply chain integration is a must.
2. Supply chain information-sharing software
To improve product forecasting, minimize inventory levels and reduce out-of-stock, retail companies are adopting demand-driven supply chain systems. These systems allow suppliers to integrate near-real-time demand data with traditional forecasts, and proactively share product data with retailers to boost transparency.6Chandrasekaran, Sirish, Robert Levin, Harry Patel, and Roger Roberts. Winning with IT in consumer packaged goods: Seven trends transforming the role of the CIO. McKinsey & Company. March 2013
Product lifecycle management software is one example. To boost efficiency for in-store and e-commerce operations, localized assortments and agile responsiveness to evolving consumer demand, more retail companies are adopting lifecycle management software to communicate with one another. Transparent, ongoing communication between retailers and suppliers makes their supply chain more efficient and responsive, which helps companies serve shoppers better.
3. Digital retail management systems
To simplify the complexity of omnichannel, retail businesses are investing in digital retail management systems to replace the traditional point of sale (POS) system. Retail management systems integrate such retail functions as POS, customer relationship management (CRM) and store inventory to unify their valuable business data.7 iVend Retail. Retail Technology Trends and Predictions for 2017. December 19, 2016.
Have an integrated, centralized source of omnichannel data gives companies a strategic advantage, as winning retail companies “don’t really differentiate physical from digital shopping. They offer whatever experience and convenience the shopper demands, when they demand it.”8Frontier(less) Retail. J. Walter Thompson Intelligence. June 15, 2016.
Retailer Barneys analyzed data on both online and offline customer behaviors and learned women who purchase fine jewelry in their brick-and-mortar stores have previously browsed for it online – a pattern they would not have discovered without a complete understanding of their customers’ omnichannel path to purchase.92016 Retail Trends and Predictions. Vend. Unified data smashes the silos that keep data fragmented and gives companies a comprehensive view of their customers’ shopping journey.
4. Logistics tech
Free shipping is a requirement for today’s online shoppers. Now retail companies can gain a competitive edge by adding speedy, same-day delivery for almost-instant gratification. A recent study found 80% of shoppers surveyed want same-day shipping, while 61% want their packages even faster — within 1 to 3 hours of placing an order.10Retail Trends and Predictions 2017: 12 forecasts for the retail industry in 2017. Vend.
As a result, more retailers are embracing new technology apps, services, and third parties to fulfill shoppers’ needs, including trackable updates on product fulfillment and shipping information.11iVend Retail. Retail Technology Trends and Predictions for 2017. December 19, 2016. For instance, Apple partnered with logistics company Postmates to offer same-day delivery to its customers.12Retail Trends and Predictions 2017: 12 forecasts for the retail industry in 2017. Vend.
For convenient, fast delivery of e-commerce purchases, Walmart invested in partnerships with online transportation network companies Uber, Lyft and Deliv. Collaborative logistics technology improves the shopping experience, as “consumer expectations are higher than ever for free and fast shipping, making flexibility … more important than ever.”13Emin Wood, Eric. Survival of bricks-and-mortar among B2B firm’s 4 predictions for retail’s future. IT Business. June 9, 2016.
Technology for retail resilience
To compete in today’s disruptive retail market, these technology innovations can help retailers and suppliers evolve from arm’s-length, transactional relationships to mutually beneficial strategic partnerships. Unifying big data, sharing insights and adopting software, systems and apps can help retailers and suppliers align their efforts to boost efficiencies and delight shoppers.