How retail supply chains are dealing with lockdown disruption to deliver excellence
Nov 10, 2020 Comments (0)
The arrival of the second national coronavirus lockdown has hit retail supply chains at a crucial time of the year. Many retailers will have been gearing-up for peaks including Black Friday, Cyber Monday and, of course, Christmas.
Whilst the timing of lockdown couldn’t have been any worse for retailers and supply chain partners, many are agile enough to quickly change their strategies and tactics. They evolved during the first national lockdown, dealing with the immediate impact of disruption and developing solutions that can cope with ongoing uncertainty.
A two-pronged approach
Advanced Supply Chain Group commissioned research of 200 senior professionals involved in buying, stock inventory management and logistics to determine how lockdown and COVID-19 disruption is reshaping their supply chains.
This showed that the retailer response to coronavirus can be separated into two different areas. The first was the immediate response that dealt with the ‘here and now’. National lockdowns in the UK and around the globe led to staffing issues, unpredictable market demand and bottlenecks at borders and throughout supply chains. There was an urgency to deal with these challenges to try and capitalise on what sales opportunities were available to protect cashflow and the bottom line.
This first area involved a number of the ‘quick fixes’ identified in the research, such as adjusting lead times, delivery times and increasing levels of stock held.
The second focus area has seen retailers taking more of medium-term view of stock, which could actually change inventory management in the long-term. A third of retailers (33%) have taken the time to audit the performance of the goods they’re selling to focus on the most profitable items.
Retailers are essentially optimising the value of the goods that pass through their operations to ensure that every sale – which is increasingly unpredictable and hard-fought – delivers a noticeable return.
This auditing of stock performance has also led to retailers changing what they sell. 33% have since diversified the type of stock held. Businesses want to give shoppers more choice and reasons to increase how many items they are putting in their baskets. They also want to provide shoppers with alternatives to help maintain consumer satisfaction and loyalty in the eventuality of out-of-stock scenarios.
A clearer view
Optimising stock performance has also involved retailers focusing more on supply chain visibility. 37% of retailers have already changed stock inventory management practices to improve the transparency of stock movement and levels – a factor that ranks highly for future investment.
Four in ten retailers plan to invest in improving the accuracy of their inventory management. Having a real-time view of the status of stock will enable retailers to remain agile and respond more quickly during periods of uncertainty. At the press of a button, they can access critical data about the age of stock, changes in its value and determine rates of depreciation to pinpoint when to discount retail prices and run other promotions that maximise sales opportunities and margins.
Accurate, real-time stock inventory management is also being prioritised by retailers as they aim to grow sales. 42% are planning to do this by selling through new channels. To fully maximise the reach of multiple platforms, it’s essential that retailers are constantly getting the right products to the many different places at the right time. There’s really no margin for error, as just one chink in the chain can quickly cause a domino effect that quickly causes widespread delays and jeopardises customers satisfaction and brand loyalty.
The pandemic has left many consumers frustrated by how long it takes for them to receive refunds and also disappointed by unavailable goods they thought they’d bought. Retailers can strengthen consumer trust and loyalty by managing their expectations about what goods are in stock and delivering these to shoppers on-time. This requires a connected, constantly updating supply chain management system that can quickly process data from different channels.
Retailers are dealing with the disruption and ongoing economic uncertainty of COVID-19 by making their stock work harder for their bottom lines. They appreciate that ongoing uncertainty about employment and lockdowns affects sales and that every customer transaction carries even more significance. By improving stock performance and accuracy, they are able to extract maximum value from every sale and boost the chances of repeat purchasing across an ever growing number of channels.
Click here to read more about the five trends and download the full report ‘Retail Supply Chains in the ‘New Normal’; Evolving from Disruption to Delivering Excellence’.
Ben Balfour is Commercial Director at global logistics company Advanced Supply Chain Group. Ben has over 26 years working with brands and retailers in developing supply chain solutions that effectively and efficiently move prime stock internationally to optimise stock inventory management, maximise sales availability and minimise margin dilution.