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Meeting Digital Retail’s High Customer Expectations Means Being Clear-Eyed About Weaknesses, Capabilities

Carol Raimo, Managing Director Consumer Products and Services Industry Practice Leader
Lucas Manganaro, Managing Director Supply Chain Innovation Practice Leader

The big picture: Today’s digital retail consumers have little tolerance for organizations that do not meet high customer service standards for accurate and timely fulfillment of orders. Transparent and real-time communications about order status have become an industry norm, which means that retailers need constant access to real-time data and inventory management tools to keep pace with customers’ expectations.

Providing this seamless omnichannel shopping experience is a continuous struggle for many brick-and-mortar retail organizations, particularly those that digitally came of age during the pandemic. Part of the problem is that many were woefully unprepared for the big shift to ecommerce and have been playing catchup ever since.

Another big issue is that the fundamental design of supply chains has not changed enough in the last 30 years. Order management, inventory placement and route planning remain standalone processes – and these processes are not equipped to adapt when any of the others are disrupted. In many cases, the systems supporting these processes are not visible to one another, which means many retailers don’t have much (if any) visibility beyond their own four walls. Read this blog for more on how companies can achieve value-chain harmony.

Optimizing order management for customer loyalty 

Order management is another area of importance. Customers should have a good, and intuitive online experience when placing orders. The ability to provide a robust omnichannel experience within the order process is a key differentiator for retail companies to retain and acquire new customers. Of course, once the order gets into the system, the fulfillment and shipment requests need to be processed accurately and timely. In the post-pandemic era, this is an area where customer loyalty is most fragile.

Inventory visibility is an essential ingredient for success, but so is agility, automation, resilience, and effective people management in today’s constrained labor environment. Retailers and CPG businesses must be able to balance these priorities against cost or inflationary pressure.

Imagine this: A customer purchases multiple disparate products online (let’s say, a heavy set of pots and pans, a candle and a tablecloth). Those items may be stored across multiple distribution centers. Balancing delivery timing, shipping cost and packaging expectations successfully require accurate inventory visibility across the network of fulfillment centers. As customer expectations continue to evolve, analytics and automation will play a larger role in optimizing order fulfillment and this will only continue to elevate the importance of having an accurate real-time view of inventory.

Retail leaders should constantly ask:

  • Do we have the right products in the right places at this time?
  • Do we require more or different distribution centers?

Another important consideration: Smaller distribution centersor warehouses in close proximity to where products are needed may be more efficient than having a larger regional-centers approach. Investing in smaller brick-and-mortar micro-warehouses to avoid extended shipping times can lead to better customer service. This blog about winning at the retail supply chain game offers crucial advice.

Boosting retail efficiency with integrated tech solutions

Most retailers have some combination of an order management solution, which may or may not be embedded in their ecommerce engine. On top of that, many have a separate warehouse management solution and a transportation management system. Technology enablement, such as a cloud-based supply chain orchestration platform, can help to stitch these systems together, acting as an integration solution for the different data and processes to communicate seamlessly.

A new wave of supply chain systems, applications and technologies can be leveraged to support and enhance order management systems.This includes advanced analytics, visualization dashboards and a variety of artificial intelligence, machine learning (ML), natural language processing (NLP) and cognitive technologies.  This white paper on making supply chain agility a reality offers more insights on this topic.

Technology will not solve every problem. Company leaders need to be clear-eyed about this, and also their weaknesses and capabilities. They need to ask themselves these crucial questions:

  • What are the gaps or challenges in the fulfilment processes?
  • Have investments been optimized to enhance customers’ omnichannel shopping experience?
  • Are the fulfilment centers managed by the right expertise?

With these questions, retailers can begin to pin down weaknesses in longstanding order management and fulfilment challenges while setting themselves up to enhance customer satisfaction and customer value.

This blog was originally published on Retail Dive.

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