Retailers have been suffering recently from an increasingly large number and severity of new trends. The rate of technological advancement is accelerating, the economy is decelerating, and consumers are increasingly deliberating about even the smallest purchases. This is placing pressure on retailers to lower prices, squeeze more from their margins, and meet customer service expectations which are continuously shifting.
The depth and severity of the current economic recession are exacerbating and quickening this trend even more, and retailers are looking to both their IT and process experts to help relieve the pressure. Here are 4 simple and effective ways that retailers can meet these new pressures inexpensively and quickly.
1. Change batch-based inventory availability pictures to being event-driven.
Consumer-facing real-time stock checks and pricing capabilities make it less and less likely that a customer will settle for a back-ordered product. This can translate to lost sales for retailers that return long ship times, backorder notifications, or inaccurate inventory pictures. Many retailers are turning to more advanced methods of inventory promising. While it may not be feasible or even wise for you to return instant availability pictures for all of your products due to sheer transaction volume, it does make sense to provide better service levels for your most popular items.
One way to handle this is by providing tiered inventory pictures, in which you maintain high-velocity Skus separately. This ‘hot-sku’ functionality allows you to set a more frequent inventory synchronization schedule, or even an event-driven (near real-time during order or inquiry placement) model. This can provide more accurate, timely pictures of inventories to your customers and reduce lost sales, increase fill rates, and increase overall customer satisfaction.
2. Invest in your returns processes
A frequently under-utilized and ignored retail fulfillment component is the need to have a robust return functionality. Between social media’s popularity and the increased information availability about all products and retailers, the chances of losing multiple customers because of a difficult or painful returns process has increased exponentially. The old adage ‘a happy customer tells one person, but an unhappy one tells 10’ has been multiplied by a factor of ‘x’, where ‘x’ is the relatively independent factor of that product or company’s online popularity. By using your supply chain applications and information availability you can empower your customers and employees to correct these situations like never before. While unexpected events cannot be controlled,
3. Make your application/process testing more flexible
As the frequency of changes increases, and your willingness to invest additional IT resources decreases, it becomes even more important to create a testing platform capable of supporting situational tests dynamically. As your users ask ‘what if?’, you should be able to translate their questions quickly and easily into test scripts and scenarios. This will help increase your response times, better assess the impact and priority of IT changes, and capitalize overall on the changing landscape. In a world of ubiquitous comparison shopping, it becomes obvious that the first companies capable of capitalizing on new trends, products, or requirements, will gain immediate revenue advantages over those that can’t. This can translate to better customer reviews as well, which in turn leads you back to increased revenues.
4. Increase your social media capabilities
It still amazes those of us in the ‘digital native’ generation (aka those who were born into the age of the internet, iPods, and Facebook) that large corporations do not have truly significant presence in their digital world. While no one wants to be bombarded with ads 24/7, the new retailer consumer does demand that information be at his beck and call. As you increase your returns capabilities, make your product more flexible, and provide better customer, you also need to provide the hooks to allow your customers to brag about your advances. Robust social media integration in key places can not only provide increased marketing opportunities but also additional capabilities to get honest and in-depth feedback about your processes. By using trending data from search engines, social media applications, and mobile applications, retailers can now get a better picture of who their customer is, what they want, and how they would like to get it!
As retailers move forward in this daunting business landscape, they should remember that while a recession can impact your business, it is definitely a catalyst for strategic change. In the supply chain industry, pressure to decrease costs and increase customer satisfaction often drive the most significant innovations. It has led to more efficient milk-run sourcing strategies, revolutions in packaging strategy, and ingenious new business models like those of Dell and Amazon.
For more information on how to implement these solutions please contact us.