Report Finds Retailers Need New Solutions To Meet Supply Chain Challenges

The changing retail landscape requires adaptation and flexibility to meet new challenges.

Inventory accuracy and visibility in real time  has been  a top internal challenge for retailers, but this year, RSR Research has found that retailers are finally getting a handle on it to meet today’s Omnichannel requirements. In their report, “Supply Chain Execution: New Challenges Demand New Solutions,” RSR found that approximately half of all retailers now say they are “very confident” that they know where their inventory is at any given time.

In fact, the report found, “Retail Winners” (over-performers) have invested more time, energy, and technology in order to ensure confidence in the currency and accuracy of their inventory. This also benefits the consumers, since such efforts are designed to expose inventory that is available-to-sell to digitally-enabled shoppers while also optimizing customer service without overloading inventory stocks. Modern technologies like RFID-tags and more traditional means like frequent updates of central stock locator databases from operational systems have helped to boost system-wide inventory visibility for the majority of Retail Winners identified by RSR.

For the study, researchers surveyed 99 qualified retail respondents, 92 percent of which are headquartered in the U.S. The results revealed both supplier pressures and competitor pressures among the supply chain challenges faced by retailers. And, according to the report, “Winners emphasize getting closer – and faster – to customers. But they also value moving beyond relying on reactionary measures to meet consumer demand – by better identifying sources of demand upstream. They value this at nearly 2x the rate of their colleagues.”

Brian Kilcourse, managing partner at RSR Research, said that the study also revealed that “more merchants of highly replenishable fast moving products – grocers, drug stores, and general merchants – have achieved a higher level of inventory visibility throughout the supply chain than have their counterparts in fashion and specialty.”  This finding counters what is often assumed, that GMCG and GM retailers actually report a higher level of confidence in their accurate inventory visibility as it moves through their enterprise than their Fashion & Specialty retail counterparts.

The report also provides several critical recommendations for retailers determined to get ahead of their supply chain challenges. These include:

• Think ‘different.” Retail Winners lead the pack because they realized that the traditional supply chain isn’t working. Those who want to get ahead need to think differently about how to meet growing customer expectations.
• Trust your KPIs – or invest until you can. Retailers need to be able to trust inventory-related information (including accuracy and visibility) in order to insure that they can meet customer demands at all points on the omnichannel circuit. Those who can’t will fall behind.
• Don’t fear Amazon: respect the customer. The key is focusing on meeting customer demands. If a competitor such as Amazon has stolen customers away, ask why? You don’t necessarily have to offer up apples for apples, but figure out what options your company can offer that will sway the consumer in your direction. Most often, this includes ways that get your employees interacting with customers in more engaging ways.
• Take a risk. The report demonstrates that the time for action is now for retailers to solve supply chain issues. Consumers are adamant that their chief concern is getting what they want exactly when they want it. A number of leading retailers have also been focused on supply chain execution as a priority for years now, and that work is about to reveal its results in a big way.

Ultimately, the report concludes, “If you don’t know what you have, where it is, or how you can get it, nothing else really matters. Not price, not product mix, not even the shiny stores or sexy mobile sites you’ve managed to convince a consumer to visit.”