Online shopping represents 10% of retail sales in North America but retailers realize that change is necessary in order to grow.
Online Shoppers Expect More
In the tremendously competitive world of retail the customer is in charge. Online shoppers want to know they are receiving the best prices that the retailer will fulfill its promise by providing home delivery . Alternatively the retailers may hold the item in-store for subsequent pickup. Customers also want the option to receive regular shipment updates. They may even decide to change their minds about where they want to receive their items. Providing improved supply chain visibility is the key.
Retailers Need To Transform
Although many storefronts have been closed, retailers realize that many customers still enjoy the in-store shopping experience. A senior executive of a $3B retailer said:
“If the item that you want to purchase is not on-hand we know that suggesting you come back next Wednesday after our Tuesday shipment arrives, will no longer work. We must equip sales clerks on the floor with tools they can use to inform customers when they will have their purchases and close the sale. We must promise.”
Becoming More Demand-Driven
In simplistic terms retail has traditionally been a “provide it and they’ll buy it” industry. Retailers built supply chains that supported this approach. The impetus for selecting the items that were placed on store shelves was the result of much forecasting experience. Brand loyalty, unique items, pricing, availability, etc., all played a role in our selecting what stores we would shop at. The environment has drastically changed. Customers now demand virtually unlimited choice and supply chains must become more demand-driven. Retailers must offer more supply chain visibility.
Evolving Technology Innovations
Supply chains represent:
- established processes
- significant capital investments in technology
- long-standing relationships
- sources of employment for tens of thousands of workers
Although change is required and in many cases is driven by information technology, becoming more demand-driven is not achieved overnight. A well-planned series of incremental steps that build on each other to provide supply chain visibility for customers and for staff will allow the organization to evolve to a more demand-driven posture.