The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Supply Chain: Walk Before You Run – But It’s Time To Get Walking

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If you read our content with any regularity you know that we’ve been calling the supply chain “the next big thing ” for some time now. Nikki’s story this week about McDonald’s willingness to get playful with consumers – without having the supply chain to back it up – is just another perfect example of why we feel confident in our, ahem… prediction. Most retailers don’t have the ability to know where their basic products are right now in order to fulfill demand in the event of even small event spikes, let alone something as fantastical that nearly-overnight mass event.

So what about just getting it right on a daily basis – the blocking and tackling stuff; how are retailers doing there?

In our latest supply chain report, New Challenges Demand New Solutions, we see there’s just a lot of it that they just think is beyond their control.

For Winners, the consumer’s disregard for who fills her order is very real: shoppers are clearly just as happy to buy from a supplier as they are any retail brand. This is a legitimate issue, as no retailer is able to access or allocate hot inventory as easily as the company who manufactures it or supplies it to the retailer.

At the same time, average and lagging retailers focus on overly complicated things: tasks that require a level of sophistication these retailers clearly don’t yet have. Same-day fulfillment? That’s incredibly difficult and remains a somewhat niche need. A seamless omni-channel experience? That is far more of an outcome of vision-driven execution than it is something to just “achieve “. As we often find, non-Winners focus on the ends and miss the means to get there.

Within the full report, retailers also show us that they are also more likely to point the finger at the existing supply chain’s technical shortcomings, rather than acknowledge their lack of investment in those technologies.

At the same time, Winners also have a vastly different view of the operational challenges that are currently running their efforts afoul. Again, these are factors that have a marked effect, but fall within a retailer’s purview, and are therefore much more in their control to change.

The best performers are vexed by direct-to-consumer (DTC) shipments – and want to get a handle on the situation as fast as humanly possible. Is this a result of receiving more DTC orders? Without a doubt. But more than that, it’s a result of powerful competition. It shows a recognition that they’ve put a lot of thought into what makes their competitors (in many cases, Amazon) the first choice of their old customer base. If they can get products to consumers from the warehouse – or the store – fast enough to satisfy the consumer, but without breaking the bank, these retailers know they will be back in the game again.

And on the flip side, due to the reckless abandon with which so many shoppers now buy-many/keep-one/return-the-rest, these high-level performers know they’ll also have to revamp their returns system to keep up.

If they can be successful in this one area alone, we strongly believe that all of the ancillary benefits associated with buying from a retailer (rather than an aggregate marketplace) will help bring back shoppers to brands in significant numbers.

As long as you don’t make promises you can’t keep.


Newsletter Articles October 17, 2017
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