Infosys on the perfect retail Xmas with optimised supply chain data
Written by Prateek Sinha (pictured, right) of Infosys
As the nights draw in around us and the air takes on a distinct chill we need to face up to the fact that the summer is long gone and Christmas is bearing down on us like heard of flying reindeer. For the majority of us the Christmas period conjures up images of long family lunches and time off work, but for the retail sector the festive period means one thing and one thing only: peak sales.
But with our economic recovery uncertain, the jury is still out as to whether consumers will loosen their grip on their purse strings this year, especially as Scrooge-like national austerity measures continue to bite. In this environment, retailers need to plan for the worst while hoping for the best, and this means doing all they can to make this Christmas’ retail experience the most compelling yet.
Good will to all supply chain partners
This year’s Christmas winners will be those retailers who work closely with their trading partners and branded suppliers to build an ‘ideal store’ – increasing basket size and display conversion rates, reducing new product introduction times and eliminating ‘out of stocks’ to improve customer experience.
During the Christmas period it goes without saying that the latter is of most importance. If a parent can’t get the latest must have toy on the shelves, there will be a world of tears on Christmas morning and not a little ill will towards the retailer from harassed mums and dads.
This of course all comes down to transaction and stock data being effectively shared across the supply chain, especially between the retailer and the consumer goods brand – ensuing that just the right stock is available to meet demand without being left with a load of surplus products come January.
However, some recent research carried out by Infosys suggests that sharing of data between the two parties is not yet at the level to create an effective in-store experience. In fact, only 16 per cent of retailers share customer data on a daily basis, suggesting that the majority seriously impacting ability to react in real time to customer trends. Furthermore, while 71 per cent share basic shelf data, only 48 per cent of retailers are prepared to share POS data with their FMCG suppliers and 38 per cent willing to provide shopper behaviour characteristics.
While it is understandable that retailers want to protect their data assets, in this instance this practice is stopping them from working more effectively with their partners. With Christmas being the season of goodwill to all men, this is the perfect opportunity for retailers to more freely share data with their suppliers – it will ensure that the right products are in store when needed and that retailers are able to react to changes in demand with more agility.
All retailers want from from Christmas is multi-channel supply chain management
This openness needs to extend to data extracted from all of the retailer’s sales channels, and increasingly this includes mobile. 2012 saw m-commerce during the festive season increase by 135 per cent compared to 2011. This trend is likely to continue and most probably accelerate. However, in order to take advantage of the yuletide mobile boom, retailers need to be able to process mobile sales data and ensure it is fully integrated with online and in-store sales information, so that supply chains can be managed effectively.
This means that retailers need to invest in analytics tools to collect and interrupt data in real-time across all channels. This real-time, big data approach to stock management holds the potential to make Christmas more profitable than ever for retailers, allowing them to perfectly tailor stock to demand and even predict customer demand before it happens – the Holy Grail of supply chain management.
The primary opportunity for retailers is to ensure they are connecting the various streams of transactional data they get – data from in store, online and mobile sales and related traffic patterns. What separates the good from the great is being able to unify this sales information and use it to provide a single view of each customer. With this, they are able to offer relevant bundles, ancillary products, accessories, and show ‘what others like you’ bought.
Looking outside the organisation, there is an even greater opportunity to track and understand the wider context in which customers are browsing and buying. Social media provides the opportunity to get a much wider and richer understanding of both the individual customer and different communities; what shoppers browse, social interests, locations, sentiments, searches and reviews. Coupled with transactional information, this behavioural data allows them to create a complete picture of the customer and use this to drive a richer and more targeted proposition throughout the Christmas period.
But this analytics-based approach will only bear real fruit if there is a level of transparency between the supplier and retailer. In fact, to be really effective, retailers must look to completely integrate this information with their suppliers’ data so they can act as soon as spikes in demand are registered.
Make this Christmas a cracker
This Christmas, the retailers who’ll do well will be those that truly understand and implement a joined-up, multi-channel retail experience. Customers are becoming more tech savvy by the year, and with this they are getting more demanding. They understand the power of technology to enable great experiences at the touch of a button and they will, quite rightly, have questions to ask of those retailers that are failing to deliver this. Retailers should look to their trading partners and suppliers to help create this fulfilling shopping experience. Ultimately both retailers and brands have the same end in mind: to hear the sound of till bells ringing all over the UK this Christmas. By working together it is more likely that they will achieve just that.