Why The Supply Chain Deserves To Take Priority In Retail’s Digital Transformation


Worldwide spending on retail technology will increase by 3.6% to $203.6 billion in 2019, according to Gartner. However, many of the retail technologies getting developed seem to be customer-facing. Could it be that technologies that enhance essential ‘behind-the-scenes’ areas like the supply chain are getting forgotten, and if this is the case, what are the implications for retail businesses?

Ensuring the products consumers want are available to them at the right time and place is as important, if not more important, than making the buying experience more convenient, or engaging.

Investment in retail technology must build value

Deloitte’s, “Global Powers of Retailing” 2019 report, cites increasing inventory availability as one of the top factors contributing to Amazon’s 33% growth in sales in the North American region between 2017 and 2018. Ensuring availability is a core component to Amazon’s successful business strategy, and their ability to deliver within short time frames has undoubtedly bolstered the growth of its Prime model.

However, according to research commissioned by Gravity Supply Chain Solutions, only 15% of retailers have completed supply chain digitization projects that will enable faster and smarter decision-making, and help retailers deliver on customer expectations.

A digitized supply chain management platform, enables retailers to overcome supply chain risks, by providing a holistic view of real time data from across the entire supply chain network. Typically, manual supply chain management processes rely on people manually trawling through rigid datasets stored in different silos relating to each different stage of the supply chain, from the initial purchase order through to receipt of delivery.

The Gravity research found that 77% of retailers that have undergone full supply chain digitization are more likely to say they are in complete control of their supply chains. What’s more, 76% believe that their organization has enough data and insight, to make the right decisions about its supply chain since undergoing digitization. It is clear that those that do prioritize the supply chain in their digital transformation efforts are reaping enormous benefits.

Future-proofing the supply chain

Investing in supply chain digitization now will help lay the foundations required for enabling exceptional supply chain management capabilities in the future. By using predictive analytics, the supply chain will use artificial intelligence (AI) and machine learning (ML) to predict consumer demand autonomously, and ensure the right products are in the right places as well as react in real time to supply chain disruptions to guarantee timely product delivery, but the fact remains: “Retailers must start digitizing their supply chains, now.”

The beauty of supply chain digitization is that it can get achieved through a phased approach. By digitizing one area of the supply chain, retailers can grow their profits and use some of that capital to digitize the next area of the supply chain. This compelling argument is one to remember when selling a digitization project to the C-suite.

By investing in supply chain digitization through a phased approach, retailers can begin the journey towards the eventual self-propelled and predictive supply chain, but those that fail to make this investment, risk losing ground to competitors that are prepared to innovate and gain a competitive advantage in doing so.

-Graham Parker, CEO, Gravity Supply Chain Solutions

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