Mar 15 2022

Retailers Can Leverage Technology to Address Supply Chain Issues

It’s hard to satisfy shoppers without well-stocked shelves, but an array of emerging technology can help.

When the pandemic arrived two years ago, retail was one of the hardest-hit industries. As retailers grappled with store closings and labor shortages, supply chain disruptions catapulted to the top of their list of challenges, and those issues haven’t subsided since.

As The New York Times recently predicted, “It will require investment, technology and a refashioning of the incentives at play across global business. It will take more ships, additional warehouses and an influx of truck drivers, none of which can be conjured quickly or cheaply. Many months, and perhaps years, are likely to transpire before the chaos subsides.”

As the pandemic stretched on and retailers began reopening, they were confronted with the need to maintain a loyal and satisfied base of customers, despite the many challenges of remaining connected in a remote world. For many of them, that meant developing digital tools that could keep their supply chain efficient while speeding up delivery.

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Retailers Face Lingering Supply Chain Issues That Demand Solutions

In a recent report by Deloitte, experts recommended that in 2022, “retailers should continue down the remediation path they began at the onset of the pandemic to realize long-term and lasting benefits.” In fact, the report said, 2022 could offer opportunities to update and restructure outmoded supply chains, revamp inventory management systems and find innovative ways to transform the physical shopping experience for the digital age.

“This will likely require entirely new ways of thinking and long-term commitments from retailers, but these efforts could forever shift the way retailers conduct business,” according to Deloitte. “That future begins today, by addressing near-term retail challenges with an eye to the future.”

True supply chain resiliency will likely require significant change across the board. That type of change doesn’t happen quickly. “But retailers can’t afford to wait, given that 80 percent of executives we surveyed believe consumers will prioritize stock availability over retailer loyalty in the upcoming year,” the report said.

The pandemic has altered employee expectations as well as the ways customers shop. Both shifts have affected the supply chain: Changing employee expectations have contributed to the labor shortage, and the convenience of online shopping has heightened customer expectations of product availability. “Organizations need more credible information and technology upgrades to develop agile systems that can handle the new consumer scenarios,” Deloitte wrote.

HEAR MORE: Read what tech leaders say retailers must do to overhaul the in-store experience.

Tech Can Address Supply Chain Issues and Offer Competitive Edge

The Deloitte report notes, “A key takeaway from the pandemic has been that consumers have reset their level of reliance on technology and digital platforms.”

The report includes survey results that indicate retailers plan to invest this year in e-commerce, digital marketing and automated checkout technologies. “Over the next five years, leaders are buying into the prospects of digitization of the physical world, such as voice commerce, staff-free cashier-less stores, and the selling of digital goods,” the report states.

The report included survey results indicating the technology investments many companies are making to address supply chain difficulties include such tools as digital inventory management, supply chain analytics software, warehouse management systems from providers such as NVIDIA, and real-time traceability.

All these tools can ameliorate the effects of supply chain disruptions. As the report states, “Leaders are making this a higher priority, and forward-thinking retailers should strive to automate their processes as much as possible and consider making significant investments in automated driving technology and last-mile delivery.”

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Tech Tools Can Help Restore Customer Loyalty

The reduced availability of products has combined with the shifting habits of in-person and online shoppers to present new challenges to retailers seeking the kind of customer and brand loyalty they may have had before the pandemic. According to a recent study by McKinsey, “Since the onset of the pandemic, more than 75 percent of consumers have changed their buying habits. In a historic shift in brand loyalty, 39 percent have either changed brands or retailers, and 79 percent of those intend to continue exploring their options in the next normal.”

Forbes recently noted that technology can help businesses build back the loyalty their customers showed before the pandemic. “For businesses that lean toward early adoption of new tech tools, the impact on the bottom line can be tremendous. When you leverage technology to facilitate a better customer and employee experience, you're more likely to have high retention and loyalty rates, thus keeping your business profitable and successful.”

Loyalty programs are an effective tool that can be used to mine valuable customer data and bring customers back. McKinsey noted in another recent article that paid loyalty programs have become a growing trend that allows companies to offer their customers a unique experience. “These companies and many others are capitalizing on this emerging loyalty model as a way of satisfying their increasingly connected and experience-driven consumers.”

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