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 the finger. But as technology advances, consumers gain more and more power – and with more power comes higher expectations for a great customer experience.
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 Retailers can no longer rely on traditional or outdated supply chain processes if they want to stay competitive with e-commerce giants.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 the 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, but the retail industry is not where it needs to be. 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 stock-outs and overstocks. The study indicates one of the key sources of customer dissatisfaction today is out-of-stock merchandise, and McKinsey & Company found reducing stock-outs 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.
