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.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.