After the 2018 NRF Big Show, you could say there’s good news and bad news for retailers.
The good news: the hype around the retail apocalypse is largely overblown. But the bad news: in 2017, 21 major retailers filed for bankruptcy, 9,000 stores closed and 170,000 retail employees lost their jobs, reports Retail Dive.
The retailers that are surviving and even thriving are those embracing the digital supply chain. Physical and online retailing can complement each other, not cannibalize sales from one channel to the other. Customer surveys indicated that consumers are welcoming of innovations such as showrooming and buy online, pick up in store capabilities, reports Retail Dive.
Unfortunately, the retail supply chain is still mostly analog, but consumers are going fully digital, leaving retailers scrambling to meet fast-changing consumer preferences, Spencer Fung, CEO of Li &Fung said at an NRF session.
As retailers have risen to meet consumer expectations, the thought of “omni-channel” in retail is no longer a differentiator. It’s a must-have. Especially for big retailers, customers expect to have the product they want via the channel they choose.
The digitally savvy consumer doesn’t make distinctions anymore between online shopping and in-store shopping. Rather they see shopping as a seamless experience, writes Mike Cassidy.
Meeting those expectations means investing in a higher level of a digital supply chain, Fung, added, driven by end-to-end data that boosts efficiency and delivers full traceability and transparency.
Retailers are shifting their focus from a low-cost supply chain to a faster supply chain, Fung told the NRF audience. The supply chain will become shorter and more nimble, reflecting the warp-speed changes in consumer demand. Fung said that companies that reduce their supply chain cycle from 50 weeks to 20 weeks increase turnover by a double-digits, and cut inventories and markdowns significantly as well.
One of the drivers behind the faster supply chain will be artificial intelligence, backed by advanced analytics. Artificial intelligence will use advanced analytics to get smarter, faster. With more in-depth insights, retailers will be able to have more control. For instance, they can track trends in social media and their own customer buying behavior to anticipate ramping up and down on specific products.
Companies that started in the digital age are able to design their supply chains from a data-first point of view. Using analytics they can repeatedly try new technologies and occasionally fail as a way to learn new things, Cassidy wrote.
For retailers, technology is not the end game, though. It’s simply the tools we use to solve problems. The experts at NRF cautioned retailers to not look at AI or analytics and think you have to find a way to implement a specific technology. Instead, start with your problems first and look for the best ways to solve them. For retailers willing and able to make the transition to a more digital, intelligent supply chain, the good news is still on the way.