Managing supply chain peak periods, by Automic

Written by Craig Beddis (pictured, right), Chief Marketing Officer at Automic

Customer demands aplenty, schedule attainment taken to task, and a real-time understanding of fundamental breakage points; it’s beginning to look a lot like Christmas. During the holiday peak periods the supply chain is the elves, reindeer and sleigh all in one, keeping the retailer ticking and customers merry. Greater accessibility to mobile technologies accelerating the growth of ecommerce has created a new generation of shoppers, who are always connected and from Black Friday/Cyber Monday to the New Year will be on a mission to score the best deals, quickly, conveniently with the proper delivery date. 

To make the most of this holiday season, retailers and brands need to realize that reformulating their supply chain strategies to match the shift in consumer demand and increased expectations will ensure all inventory and financial forecasts make it home for the holidays. 

The most wonderful time of the year

Hyper competitiveness and customer expectations are learning a thing from Saint Nick. They exist whether brands are sleeping or awake and expect the best behavior, all year long. This naughty and nice list will continue to drive retailers and the IT behind them to embrace agility. Consumers have come to expect speed and ease-of-use through all available shopping channels i.e. mobile internet devices, desktops, bricks-and-mortar, television and/or catalogue. While omni-channel retailing is still relatively new, retailers have been dealing with the complexities of selling to consumers through multiple online channels for many years and have started to move away from channel specific strategies to focus on cross-channel customer consistency.

As consumers have increased accessibility 24/7 their year-round expectations of service delivery have consequently risen. However peak period are a critical time to avoid any delays or backups since mistakes can be devastating, to both repeat/return business along with brand posture. If a consumer can’t get what they want when they want it, they won’t think twice about going to a competitor to get it. In fact, research from Oracle found that brands can lose up to 20 percent of revenue due to poor customer experiences. The good news is that retailers are taking this on-board, and an impressive 93 percent  of executives say that improving the customer experience is one of their organization’s top three priorities in the next two years.

All they want for Christmas

One of the key factors that influence online shopping behavior and the decision to purchase from a particular retailer is delivery times. The role that fulfillment can play in customer retention is vital when hitting peak season, as annual profitability is sitting on the shelves for a very short window. While majority of business put massive stock into this period, it is also the time to cultivate a relationship with customers, and simple wins such as trustworthy delivery goes a long way.

New research from IMRG found that 74 percent of customers are encouraged to shop again with a specific online retailer if the delivery experience was positive.The research also identified that delivery information, before purchase and ‘in transit’ would help to improve the overall delivery experience. Retailers grasp how imperative this part of the purchasing process is to consumers with smooth delivery options front of mind but to really revolutionize this particular process, changes to the supply chain must be made.

Streamlining santa’s workshop

Fundamental to achieving a streamlined supply chain is ensuring retailers collect the right sales data from point-of-sale and process it quickly and correctly through their core systems to ensure customer expectations are met, the right products are delivered and made available to the right places at the right time across all available shopping channels. However, with multiple potential points of failure caused by the transition from one system in the supply chain to another, processes can experience frequent delays and errors that will impact the customer, and could result in a lost sale or the likelihood of the customer returning.

Poor coordination is the biggest culprit. For example, by relying on one system to transfer point-of-sale data from stores and another to execute core batch processes in a merchandising system, there is a risk of processing incorrect or incomplete data. This will have negative consequences on downstream processes that could result in empty shelves, online availability and being outpaced by competitor promotions.

This is where streamlining the supply chain can help by removing unnecessary steps from the process that can cause delays and errors. Through consolidating the process from point-of-sale data to replenishment, retail processes will flow faster and foster agility and competitive advantage. This will have a direct impact on the customer benefiting from improved experiences, quicker turnaround times and increased product availability.

Curbing holiday hiccups

Further, the continual shift in consumer behavior both on and off line means retailers need to be able to deploy application and code changes quickly and efficiently. This is continually challenging with the increased use of cloud technology and virtualization, alongside deploying solutions across various business units and applications. As a result, many retailers and brands are now turning to utilizing software featuring a real-time, event driven and messaged based infrastructure integrating multiple applications. This enables data accessibility across hardware platforms, applications and operating systems where legacy systems, ecommerce, and CRM can be consolidated in a fast and cost effective way. Typically, data from a point of sale module can help a retailer with fulfillment; yet having the same data within a CRM application can create additional sales and marketing opportunities, particularly critical during holidays.

Historically, without this integration, end users have had to rely on manual processes and entering data into multiple systems which is time consuming, ineffective and error prone. As consumers become more demanding, the need for the best ERP, CRM and fulfillment data warehouses all working together, (alongside legacy systems) becomes critical to protect a retailer’s brand, and ensuring in-store and online customer experiences are unified and optimized. By having completely control of the business and streamlining the supply chain, retailers can deliver holiday cheer with measurable benefits they can experience all year long.