It’s clear that retailing is not all about the shop window – especially in the world of e-commerce. For example, with the excitement in the Middle East around the acquisition of Souq.com by Amazon, the capacity to scale a business significantly and enhance customer experience becomes the real challenge.
Digital supply chain management can help manage the process. This is because online shopping is all about quick (and even instant) gratification, so it is not enough to sell the item, it needs to be picked packed and despatched immediately, and then tracked and traced in real time, all the way to the customer’s door. Amazon can do this incredibly quickly in the UK – order in the late evening and delivery early the next morning. The challenge will be to replicate this performance in the Middle East.
This really is the science and art of online retailing – it’s as much about the back end as the ‘shop window’.
IoT is driving the retail experience
There’s no denying that we live in an increasingly digital world. Everything we want or need can be obtained with just a click of a button or swipe of a finger. But as technology advances, consumers gain more and more power – and with more power comes higher expectations for a great customer experience.
A key technology retailers should be embracing to drive customer experience is Internet of Things (IoT). Put simply, IoT has the power to transform how we shop. In today’s omnichannel world, product availability is critical and many retailers have in-store inventory visibility challenges. Technological advancements in areas such as machine vision, RFID and data analytics – underpinned by IoT - are enabling more advanced business visibility by allowing retail inventory to be “seen” and connected by both staff and customers alike. This improvement is critical given that currently, on average, only 65% of inventory reported through retailers’ inventory management software is correct.
High-tech makeover for retailers
As online shopping continues to grow at a rapid pace, retailers’ supply chains are forced to keep up with demand and provide unprecedented levels of convenience to help businesses drive customer loyalty and achieve consistent revenue streams. Retailers can no longer rely on traditional or outdated supply chain processes if they want to stay competitive with e-commerce giants. That’s why many of them are beginning to shift their focus and give their supply chains a high-tech makeover. According to our recent Zebra Retail Vision Study, 72 percent of retailers plan to reinvent their supply chains with real-time visibility enabled by automation, sensors and analytics.
In regards to automation, 65 percent of retailers plan to invest in inventory and supply chain automation by 2021. Because multichannel shopping has become the norm, inventory accuracy is more critical than ever as products from both brick-and-mortar and digital channels flow through the supply chain. Studies show superior omnichannel support requires 90 percent inventory accuracy or greater. As an industry, retail inventory accuracy falls much lower at around 65 percent.
To improve accuracy, many retailers are budgeting for digital upgrades that enable automated, real-time inventory visibility via Internet of Things (IoT) technologies such as RFID. Using RFID platforms increases inventory accuracy to 95 percent, while out-of-stocks can be reduced by 60 - 80 percent with item-level RFID tagging. So, it’s no surprise over 70 percent of retailers plan to provide, or are currently providing, item-level RFID technology.
Along with RFID, retailers are also turning to analytics to enhance visibility as well as inventory demand and forecasting. According to Zebra’s study, 75 percent of retailers plan to invest in predictive analytics by 2021. If retailers can determine what’s selling and what’s not, they can better manage inventory to keep customers happy and avoid out-of-stocks and overstocks. The study indicates one of the key sources of customer dissatisfaction today is out-of-stock merchandise, and McKinsey & Company found reducing out-of-stocks and overstocks can lower inventory costs by 10 percent.
Retailers are also migrating from siloed supply chain processes to unified commerce models. These models ensure end-to-end, digital and brick-and-mortar enterprise visibility of store associates, shoppers and merchandise. Taking this approach allows stores to double as distribution centers, getting customers what they want and in their hands faster — which means no longer having to solely rely on warehouses to get the job done and providing a better overall shopping experience.
The future of retail
Every inch of the retail industry is changing, from the aisles of the warehouse to the shelves of the store, and retailers are driving this change in a race to better serve customers. In 2017, retailers have told us that they are poised to meet and exceed their customers’ expectations with new levels of personalization, speed and convenience. Tech solution providers should be committed to help retailers reinvent themselves, “survive” – and thrive – in this changing landscape by providing solutions that enable a successful omnichannel strategy with greater insights and visibility into store operations, associates, inventory and shipments.
By 2020 it’s estimated that we’ll see somewhere in the range of 20 – 30 billion connected devices across the globe. Many retailers may be thinking this is a long way off, but, the way I see it, beaconing solutions will lay the groundwork for the connected store IoT is already impacting and reshaping the enterprise landscape, forming more intelligent enterprises across industries and markets regardless of their size. I strongly urge retailers not to get left behind in such a fast-moving market, as you may not survive.
Mark Thomson, Retail and Hospitality Director, EMEA, Zebra Technologies
Image Credit: Zapp2Photo / Shutterstock