It is safe to say the events of the last two years have altered the retail landscape. In 2020 and 2021, we saw lockdowns imposed, resulting in estimated industry-wide losses of $2.1 trillion in 2020. On top of this, Australians proved to be the world’s biggest panic buyers as sales of canned and dry soup surged by 180 per cent and purchases of toilet paper doubled resulting in huge shortages.
Before regaining momentum from COVID 19, retailers were dealt another major blow: The Ever Given crisis. Lasting more than six days, the crisis caused losses exceeding $9 billion every day, by blocking a shipping channel handling 12 per cent of worldwide trade. This event coupled with a major spike in e-commerce spending has created prolonged supply chain disruptions, pushing the global retail ecosystem to a breaking point.
But did it really have to go so far?
Data’s role to play in retail
Looking more closely, COVID-19 has accelerated the digitisation of the retail industry with a necessity for consumers to shop online during lockdown. This has led to growth in the e-commerce industry with the market expected to exceed $43.7 billion by the end of 2021. However, retailers have not been able to meet this with supply as the congestion in the global supply chain has caused significant delays in deliveries.
This is affecting even leading fashion houses who are unable to quickly turnaround inventory to stock new seasonal offerings. As the disparity between supply and demand increases, the extreme pressures on the retail sector are unlikely to return to pre-COVID conditions until at least 2023.
Looking back, it is clear that these situations could have been better navigated through the effective use of data. There was extensive information available before and throughout the events, meaning businesses could have adapted swiftly to meet demand, and at the same time, reduce the impacts of confounding factors in the supply chain.
This is something that Active Intelligence, with its focus on hyper-contextual data, could have supported in either proactively addressing or reactively containing the situation and its eventual impact. As the amount of data produced from e-commerce spending increased, Active Intelligence could have combined information on consumer buying habits and changes in demand to ensure businesses have the correct stock available for them.
Active Intelligence and its impact on retailers and their supply chains
Although it was nigh on impossible to predict the pandemic, fluctuations between supply and demand is a common occurrence in the retail sector, so how does the effective use of data translate to better, more resilient, and future-ready operations for the global retail industry?
In the case of the pandemic, retailers with an Active Intelligence-led framework can look to make data-informed decisions that foresee supply shortages and help build alternative sourcing and distribution channels to stay ahead of this. The contextual insights this generated could have helped businesses avoid future potential disruptions and identify other prospective challenges.
Looking at the effects of the pandemic, it is evident retailers have experienced enough unprecedented disruption to know the scale of impact and damage these circumstances can have on a business. In order to prepare for present and future events, they need to become more resilient and adaptive. This, in a world as interconnected and dynamic as ours, can only be achieved with Active Intelligence.
Paul Leahy is country manager for Australia and New Zealand at Qlik.