Slow Chain, No Gain: What Retailers Need for a Successful Supply Chain of the Future

This week’s guest blog is written by former WHL Holdings Ltd CDO, John Bovill.

The global COVID-19 pandemic has resulted in a supply and demand shock all at once. Coupled with digital growth and customer demand for a high quality lifestyle, our evolving purchasing behaviour has exposed the need to address the supply chain as we know it.

But how do you balance that shift in demand and how does that impact your supply chain, especially when the challenges brought by COVID-19 have been felt across the world? Here are my top predictions for the future of the supply chain and what retailers must consider to ensure their continued success.

Repair the Supply Chain

The global supply chain is more tightly coupled than ever and is broken – or is certainly under strain -from the COVID-19 pandemic. 

There is a resultant need to strike a balance between global efficient and local, near shore reliable supply chains that are responsive to consumer demand and develop strategies to counter the inevitable rise in costs – from people and materials etc – until supply can meet demand. 

The need to digitise and transform the supply chain will require investment to improve transparency. Automation such as robotics and 3D printing will help to increase productivity from near shore sourcing, offset margin risk and create a global supply chain that is responsive to consumer demand.

Digital Growth

COVID-19 has been a catalyst for digital growth as consumers have become reliant on online shopping during the pandemic. eCommerce, direct to consumer (D2C) models, digital marketplace and social commerce will continue to experience dynamic growth during this upcoming peak trading period.

The need for continued platform development from systems such as CMS (Content Management System), infrastructure investment (automated warehousing etc) and blending digital and physical store experiences (Cloud Computing and the Internet of Things), as people shop more in neighbourhoods and inbound tourists are less attracted to city centre stores, will underpin growth and serve the customers well across all brand touchpoints.

The Post-Sales Process

Customers’ dependency on digital platforms during COVID-19 has resulted in an increased emphasis on the post-sales process to deliver efficient growth and improve customer retention. Aspects such as order fulfilment, customer queries, targeted promotions and even social media content, such as styling videos, are all a crucial part of the post-sales cycle in order to deliver a positive customer experience – all vital for customer retention.

Investment in intelligent technology, such as AI or machine learning, not only grants improved supply chain visibility but is also extremely useful in customer query handling. Logistical innovation such as automated warehousing helps to deliver quick and accurate order picking and expedites the delivery part of the process, whilst sustainable thinking by reducing packaging delivers efficient growth by cutting unnecessary waste from the sales cycle.

Sustainability

People are looking for a high-quality lifestyle and customers require information to make more sustainable choices.

The market has seen customer demand drive developments. However, developments such as circular fashion, the growth in a ‘sharing economy’ such as clothing rental subscription services and publishing carbon emissions scores (so consumers can better understand the environmental footprint of their shopping habits) require the following in order to function effectively:

• Improved transparency across the entire supply chain. Technology is one of the best ways to provide this and retailers should look to implement systems such as PIM (a Product Information Management solution) to help manage efficient product data collection.
• Supply Chain automation, such as robotics, being used to supplement and support working environments, will drive the ability to protect product margins as well as helping to cut down on waste. H&M have introduced the pioneering ‘Looop’ clothing recycling machine, which is now operating in their Stockholm store. Customers can bring in old knitwear and the machine can transform the old fibres into a women’s jumper, scarf or baby blanket in just five hours, with consumers paying between £8-£13 per item.
• Data and analytics derived from machine learning or AI. Over the next few years, the traceability of a garment will prove to be critical: QR codes will enable suppliers and brands to trace a product’s journey from start to finish. Retailer Nu-in, offers full transparency of its products so that consumers can easily see what the garment is made of, where it was made (giving the factory details) and what it is packed in, amongst other product description details.

Conclusion

The spread of COVID-19 has demonstrated how interlinked we are as a global community: it’s a huge crisis for companies all over the world. 

The opportunity to digitise and transform the supply chain that is responsive to consumer demand and that will also take advantage of the economic rebound will define the successful companies that emerge from the current COVID-19 crisis.

John Bovill is a global (Northern and Southern Hemisphere) leader and former CDO and CIO, having previously worked for brands such as Harrods and Woolworths Holdings Limited.