Supply chain management is evolving rapidly in the retail environment where consumers in the different channels have different expectations and it is the supply chain managers responsibility to manage these expectations.
The nature of multi-channel retail environments provides the supply chain manager with both new opportunities as well as challenges.
The online channel is a completely different supply chain to the brick and mortar retail store supply chain for example.
Consumer are becoming more demanding and depending on which category of retail you are in:
- Simply expect you to have stock available now
- If they don’t like the product they can return it
- The ability to compare prices
- To view in store and order online for delivery
These are a few of the examples that retail supply chain managers are facing. Some of these expectations are driven by mobile internet availability. Consumers are able to compare prices at other retailers while they are in your store! This makes it very tough on retailers who would traditionally have a unique selling point that could be conveyed in the store by a well trained sales person.
Sadly in some respects, these relationship style shopping experiences are becoming less important for consumers who want the item for the lowest possible price. It is not uncommon for someone to walk into a fashion retail shop, take a picture of the item they wish to buy, compare the price at other retailers and while still in your store, order from another retailer for delivery, purely because the price is better.
From a consumer perspective, these advancements are fantastic, they are sure to always get the best deal on their purchases.
Consumers demand instant gratification and if your call center is not up to scratch you will lose customers. Emails need to be responded to within seconds if possible, but at the very least within a minute or two.
A more recent requirement in the retail supply chain is the pay online and collect at a distribution centre. This in my opinion may very well be the best opportunity for retailers to cross sell and satisfy customers. Many collection centres that are established simply have lockers that consumers are able to unlock and leave with their goods. In my mind this represents an incredible opportunity for a concierge type service, where consumers are offer free trial sizes of new products, coupons and even be shown displays of new or sale products.
This type of innovative retail collection environment would of course need to be equipped with technology that would allow the consumer to order there and then. It of course also presents an opportunity to have a skilled sales person/concierge operator introduce products and services to consumers at the point of satisfaction.
The picking and packing processes present a challenge for retailers. The more successful your online channel is, the more demand there is on your technology and processes to pick, pack and process orders for delivery or collection. This, coupled with the demand for a larger product line means that retailers channel output and profitability need to be very carefully monitored. Consumers are able to buy your products from a number of different retail outlets, channels and even channels in other countries, so the pressure on each channel to hold onto a customer becomes vital.
The bottom line is, that a supply chain manager needs to be innovative, aware, alert and ready to make changes to satisfy customer demands at the drop of a hat. Each and every part of the supply chain, whether you are a single channel or a multiple channel retailer presents both opportunities and challenges. The difference between a profitable retail supply chain and a failed supply chain will rest squarely on the supply chain managers ability to innovate.
If you are an aspiring supply chain management professional or an existing supply chain professional feeling the pressure of multi channel supply chains or customer demands, then studying supply chain management is a necessary forst step to being able to add value to your business.
As an aside and observation while finishing off this pots, the education industry has seen tremendous supply chain challenges which has resulted in the proliferation of online and correspondence educational institutions whose delivery method is dramatically different to what it was 10 years ago.
Online and correspondence course delivery is a good example of how the education industry responded to the changes in course delivery and consumer demands.