5 challenges retailers face in giving customers what they want
It’s 2020, and omnichannel retailing is the bare minimum when it comes to meeting consumer’s growing expectations. Now, error reduction is the name of the game. Consumers are beginning to expect retailer’s to deliver the same frictionless, channel-less experience they get when browsing online. Furthermore, modern consumers aren’t the forgiving type. 32% of shoppers will stop doing business with a brand after just one bad experience.
Retailers face the task of lowering prices and reducing shipping times, while simultaneously pinpointing and addressing all the operational inefficiencies that arise during day-to-day operations––such as out-of-stocks, misplaced inventory, and supplier meltdowns. Let’s look at 5 of the biggest challenges retailers face as they strive to achieve supply chain efficiency.
1. Building fulfillment objectives around each customer
It’s easy for retailers to build their fulfillment objectives around their core customers… until they begin to scale. Then the challenge becomes how to bring big picture understanding to each unique customer interaction. Let’s say customers within a certain urban geographic area prioritize shipping speed above all else, while their rural counterparts need free shipping to place the order. A single retailer addressing both regions needs the ability to adjust optimization goals with targeted profiles, so they can offer both urban and rural customers a shipping option that suits their priorities.
But what happens when retailers need to prioritize multiple objectives at once to get a particular customer to cross the finish line? Intelligent order routing enables retailers to fulfill a wide spectrum of customer orders, adhering to fulfillment objectives in order of importance, so there’s never a reason for customers to abandon a purchase in the final leg of their journey.
2. Communicating with existing supplier networks
When retailers switch order management providers or seek out new suppliers to conserve resources in light of recent import tariffs, they need to maintain supply chain transparency to remain relevant and effective. Reports show that 65% of logistics, supply chain, and transportation executives recognize that there are tectonic shifts in their daily processes.
Open API solutions work with retailers’ existing supplier networks but are also open to new developers and can receive data from third-party sources. So, retailers don’t lose their end-to-end inventory visibility if their supplier’s network isn’t compatible with their supply chain management platform––with open API, it’s always compatible.
3. Mastering minute-by-minute inventory visibility
Real-time inventory visibility is quickly becoming table stakes for omnichannel retailers. A staggering 94% of customers say real-time inventory visibility is a significant factor when shopping with a retailer. But only retailers know the important role reverse logistics play in getting returned inventory repackaged, individually SKU-ed, repriced, and back on the sales floor (or online catalog).
The sooner a retailer’s reverse logistics platform makes refurbished or resellable returned inventory visible to customers, the less chance of markdowns or retiring the returned product. Statista found that 40%of retail organizations are producing less waste as a direct result of their reverse logistics investments.
4. Using a ‘big data brain’ for strategic fulfillment
When it comes to order fulfillment, customers appreciate the option to choose between free shipping or fast shipping at checkout. Retailers can meet these expectations by intuitively identifying the most cost-effective and timely shipping option right when an order is placed.
Strategic fulfillment options that also take a location’s sales velocity and cost of freight into account, give retailers the ability to instantly choose the right shipping option to best adhere to customer and retailer priorities, whether it’s shipping-from-store, shipping from warehouse, or drop-shipping directly from the manufacturer. This may be why retailers that use fulfillment optimization tools in their supply chains lower shipping cost per order by 7% on average.
5. Developing a self-correcting supply chain
Many retailers still use a test and learn strategy to try out new technologies. In a world where customers are increasingly unwilling to forgive retailers after a bad shopping experience, this can be risky when rolling out new applications that impact customers’ shopping experience.
Retailers need the ability to check their seasonal priorities and respond to market changes as they occur. There are many intelligent, self-correcting supply chain offerings that provide retailers with minute-by-minute data and actionable recommendations. These solutions help deliver better experiences and make it that much easier for customers to shop their brand.
Do you want to learn more about the challenges and opportunities for retailers in 2020? Read this blog.