Supercharge your supply chain with connected store technology
Deepdive #2 Connected Stores
In our second deep-dive into the Connected Stores PoV, we are going to take a look at the purpose of the store in the supply chain. New technologies are shaking up the industry and creating fresh opportunities to target consumers, personalise marketing events, and integrate brick-and-mortar stores into the retail supply chain in a way that will accelerate business. These new technologies play a fundamental role in fulfilling consumer demand by ensuring product availability or enabling other options.
Wesley Snoeren & Morris Boermann - 15 May 2018
If you got it, they want it: implementing seamless availability
It goes without saying that when a consumer orders something, they expect to get it. In fact, this is the most basic notion at the heart of retail. But today, consumers expect products to be available to them at any time and any location. And because leading retailers can deliver this seamless availability, anything less is a recipe for disappointment.
Imagine for a moment, a consumer shopping online for a jacket. They find one they love, but it’s out of stock on the retailer’s website. A few things can happen here. The consumer might try their luck at the retailer’s brick-and-mortar store, allowing the retailer to keep the sale. However, there’s a big chance they will go to a competitor that has the product stocked on their website. But what if the original retailer had the jacket in stock at one of their stores? If this were the case, the retailer could have and should have, been able to ship the jacket to the consumer from this store.
If you are struggling to provide this kind of seamless availability to your consumers, you aren’t alone. A significant number of retailers haven’t managed to master seamless availability just yet. And the results can be significant—leading to unavailable products, increased lead times, and eventually reduced revenue and bottom line performance. Thankfully, connected store technology provides an opportunity to improve seamless availability by adding data points and additional beacons to the value chain.
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Accelerate your supply chain
Like most things in today’s world, supply chains have been digitised. The linear “plan, source, make, deliver, return” framework is outdated and has transformed into digital supply networks that allow for more circular communication. In these digital networks, store systems can infuse data directly into supply and demand planning systems, inform suppliers and factories, make sure deliveries arrive at the store on time, and proactively manage return processes. By connecting stores and bringing them online, retailers can capture consumer data and create a feedback loop towards every point in the supply chain. This creates more productive conversations with their suppliers and lets retailers fulfil consumer demand and assure availability from the point of origin onwards. Connected stores also help optimise logistics, create more accurate supply and demand planning, and improve sourcing processes.
Point-of-Sale driven auto replenishment
Take the use of point-of-sale driven auto replenishment as an example of digitising the supply chain. This tactic was implemented by a global coffee brand. The brand takes POS data from its unmanned, self-serve coffee stations every 15 minutes. It uses this information to forecast demand, optimise inventory, and automatically generate nightly replenishment orders for distribution and procurement. They cut down on waste by automatically replenishing exactly what is sold. They get the right amount of beans every time.
A US-based grocery chain provides another excellent example of how to optimise the supply chain. Their IT bridge gives their suppliers full access to their inventory data and sales data by item, store, and data. By empowering suppliers with this level of transparency, production runs are timed more accurately. Suppliers can specialise and compete against each other to improve product demand. They can share forecasts, planning assumptions, stock rates, pricing, fill rates, and returns with the grocery chain as they position themselves to gain more shelf-space and increase the grocery chain’s buying power. This multi-entity supply chain planning has allowed them to grow revenue at 13% CAGR.
A connected store helps you to optimise logistics, create more accurate supply and demand planning, and improve sourcing processes
The right product at the right time at the right place
Stores are often seen as the end of the supply chain, the place where products enter the hands of the consumer. But connected stores can create real-time, seamless availability and continue to fulfil demands downstream in the supply chain so that the right product gets to the right place at the right time.
Dynamic inventory fulfilment
Let’s take a look at dynamic inventory fulfilment. This process integrates inventory visibility throughout the supply chain (think stores and distribution centres) to optimise consumer delivery. That means if a size is out of stock, the salesperson can identify inventory elsewhere, make the purchase, and have the product shipped directly to the consumer.
What opportunity will you take first?
So, how do you make the most of your brick-and-mortar stores? First, make sure it’s a connected store. Connected stores should be a requirement for every retailer. They help you fulfil your online promises. They enable your value proposition. The technologies retailers use in their stores can change the purpose of the store in the supply chain and extend it further than the company itself.
And if you do it right, connected stores provide opportunities to enhance seamless availability and create next-level omnichannel operations. There are plenty of technologies available to boost the role of the brick-and-mortar stores in the supply chain. What will you invest in first? What opportunities are thinking about implementing right now? Let’s connect and discuss!
Let’s connect and discuss!