Why Supply Chains and Manufacturers Can’t Ignore the Retail Revolution

Over the past year, the news cycle has been saturated with stories of struggling brick-and-mortar retailers fighting to keep up in an increasingly digital world. But the reality is that we saw more retail store openings than closures in 2017.  

The outlook is strong and retail technology spending is expected to rise three percent over the next three years among retailers with greater than 50 stores. It’s undeniable that we’re in the midst of a retail revolution. Here are four of the resulting trends most likely to impact supply chain managers and manufacturers:  

1.       Retail Stores Blur with Distribution Centers

The rise in alternative fulfillment options, like buy online, pick up in store (BOPIS), is driving a holistic integration of e-commerce and in-store operations. This end-to-end visibility model means retail stores should now be equipped to double as distribution centers.

New ways to place orders continue to emerge. For example, shoppers are growing increasingly comfortable with digital voice assistants. A recent study from SAP Hybris found 38 percent of voice assistant owners would consider using their assistants for holiday shopping in 2017. Furthermore, consumers may soon order coffee from their car’s infotainment system, or groceries from their flights. As these trends continue to proliferate, so will the corresponding fulfillment models. 

 

2.       As Shopper Expectations Continue to Climb, Supply Chains Must Rise to the Occasion

Our recent Global Shopper Study found 66 percent of shoppers prefer next- or same-day delivery. Meanwhile, more than half of online shoppers are not satisfied with the returns/exchange process.

Heightened fulfillment expectations are shifting retailers’ focus to providing online customers the immediacy of what you historically get in store. Adjusting to today’s demands will require major shifts to streamline operations, rethinking supply chains and improving transportation efficiency.

3.       Mobile Devices Give Life to a ‘New’ Store Associate

Store associates are typically available near the front of the store to best serve customers and answer any questions. At this year’s NRF: Retail’s Big Show, one trend that could not be ignored is the explosion of mobile devices – from the backend to the retail floor.

Associates armed with advanced, user-friendly mobile devices are suddenly able to take on backend or warehouse tasks without ever leaving the customer’s side, giving life to a new type of associate.

A popular demonstration at Zebra’s NRF booth highlighted the real-time visibility into stock and inventory that the right enterprise mobile device can provide. In fact, associates can identify an item’s exact location, see if an item is out of stock, and even help a customer place an online order – all right there in the moment.

4.       Renewed Focus on Quality Creates Opportunity

It was clear at NRF that quality is top of mind for retailers, even those who aren’t in the luxury business. Whether it’s recycled and environmentally-friendly materials, or custom-made, today’s consumers increasingly ask for a new standard in quality.

Achieving better quality is now more attainable and affordable than ever thanks to advancements in technology and automation. In a connected supply chain, every physical asset has a digital profile, giving manufacturers greater visibility into what is happening every step of the way. Manufacturers use these profiles to track real-time location, material allocation and condition of assets. The data can also be used to improve the overall manufacturing process, eliminate bottlenecks and communicate with suppliers.

Multiple checkpoints and real-time monitoring along the production line allow them to easily identify a point-of-failure or reconcile the bill of material, ensuring the best quality from conception to the store shelves.

The retail industry’s revolution continues to accelerate. And as the industry transforms, the integration of ecommerce and store operations, rising shopper expectations, mobile device explosion and increased focus on quality will offer tangible business opportunities for manufacturers and supply chain managers.