Most consumers have no idea how complex and critical supply chain management processes are. They simply go about their shopping business, expecting that their needs will be fulfilled in a timely fashion. A "sexy" looking brand and an attractive storefront, along with a complete e-commerce platform is all it takes for any retailer to get into business. Yet, with all of these systems in place, things can break down when the wrong technology is selected for the job.
It doesn't take a rocket scientist to realize that a positive retail customer experience depends on a reputable retail supply chain management system. Anything less, and an entire brand can be damaged with just a few breakdowns in the chain.
What are the three main elements of a reliable retail supply chain process and how can your business avoid the headaches of a chain that breaks down?
#1 - Mobile retail solutions are a must
A good retail supply chain solution gives your customers fast access to available inventory, using retail mobile solutions. We know from recent studies such as the KPCB mobile technology trends report that consumer use of smartphones for shopping (51%) has surpassed the use of desktop browsing as of the summer of 2016. Great technology makes all the difference in both your consumers’ experience as well as how processes are handled throughout the supply chain.
#2 - Warehouse management system stability
Behind the scenes, every retailer needs a stable warehouse management system (WMS) to handle large amounts of inventory. Greg Henry shares the factors to consider when choosing a warehouse system for managing retail effectively. He states that a good WMS must be able to have a deep understanding of your business to streamline processes, while lowering overhead expenses through greater efficiency. The signs of a good warehouse management system include: real-time inventory updates, reporting capabilities to identify forecasts, and RFID tracking to ensure products make it to their intended destination on time.
#3 - Collaboration with suppliers and vendors
A third element that makes for effective retail supply chain management involves shaping supplier and vendor behavior by using the brand as purchasing power. Wal-Mart stores is a prime example of this, as every supplier dreams of being associated with the retail giant in order to maximize exposure and profits. How is your company leveraging it’s brand in the retail market? Consider ways to become the premier retail home of specific suppliers, which can drive up consumer demand.
Stop breakdowns in the supply chain process
There are some beliefs in retail that often lead to a poor retail customer experience. Here are some ways to avoid falling into traps in the process.
Never believe there is a utopian ideal for retail
When retailers start to think that they have the perfect situation for the consumer retail experience, almost inevitably this is when things come to a screeching halt. Consumers are caught in an instant gratification mindset while supply chains operate on extended time for obtaining product, as much as 90 to 180 days out in some cases. Never over-promise and then under-deliver. Forecasting alone isn't the solution. Using a retail supply chain management solution that enables your business to position inventory carefully to consumers and then synchronizing supply chains based on demand variables is a far better practice.
Understand inventory flow patterns
To improve the retail customer experience, consider the behaviors of consumers in their quest for merchandise. Much of this information can be gleaned from mobile searches, customer service inquiries, and purchase patterns from previous seasons. But don't make the mistake of loading up on inventory in any one location, hoping that this large supply of product will entice customers to buy. This can create a breakdown in supply chain management if a central integrated system isn't in place. Inventory must be fluid and be able to go wherever consumer demand is.
Visual merchandising that fails to inspire
A critical aspect of both in-store and mobile-enabled e-commerce solutions is the ability to create appealing and compelling visual merchandising campaigns. A 2012 study published in the International Journal of Research in Marketing, shared insights about the power of visual merchandising. In this case, the study observed the behavior of female fashion shoppers and discovered that the visual layout of the store, the interior design, displays and other cosmetic additions created a more positive retail customer experience. This leads to more impulse buying as consumers spend more time in the pleasant environment of the store. The same concept can be applied to mobile shopping experiences, in which appealing graphics and merchandise layout can increase shopping behavior.
Silos in supply chain management
One of the worst case scenarios in retail chain management that needs to be avoided is when certain parts of the chain begin operating on their own. For example, a warehouse that refuses to undergo a change in technology because management refuses to comply. Or a store that neglects to think in terms of consumer needs and decides to opt out of an e-commerce model. The only way to be productive, efficient, and profitable in retail is to work with a retail supply chain management provider that offers solutions, which integrate with your existing systems, preventing silos from occurring.
How Sexy is Your Retail Supply Chain?
Did you identify some of the problems in your retail supply chain above? Is your business missing one or more of the key elements of retail success? Now is the time with Decision Point to evaluate where things stand so you can make a plan to streamline things using technology. Contact us today to get started!