To say it has been a challenging year for retailers could be considered something of an understatement. 2020 brought stringent lockdowns to counter the spread of COVID-19, resulting in estimated retail industry losses of $2.1 trillion. Businesses had barely gotten used to this new way of operating when, on March 23 this year, they were dealt another major challenge: a ship sailed into a canal.
This may sound like the setup to a joke, but the global retail ecosystem isn’t laughing. When the 400-metre-long Ever Given ran aground in the Suez Canal, the resulting six-day blockage caused losses exceeding $9 billion daily by blocking a shipping channel that handles 12 per cent of all worldwide trade.
Are you ready for the punchline? The impact on the global retail ecosystem could have been mitigated.
Understanding data’s role in the two worst crises the retail sector has faced in years
Long before COVID-19 had locked us all in our homes, BlueDot, an AI-based infectious disease surveillance system, identified the indicators of an epidemic by analysing real-time data from thousands of sources. The alert was raised on December 30, 2019, more than two months before COVID-19 was declared a pandemic. Had retail players been able to use this data to inform their business decision-making, industry losses would have been much less severe.
Even more baffling was the level of unpreparedness for the Ever Given crisis. Experts have long warned about the exponential increase in ship sizes, while port handling capabilities and shipping channel capacities remained stagnant for years. Concerns were also raised about the incremental risks accrued on such megaships, where a single delayed vessel could have a cascading impact on trade and business across regions and industries.
With a plethora of information available before and during both events, the implementation of Active Intelligence – taking immediate actions decisions based on real-time data – could have proactively addressed or reactively contained the impact of these situations.
Why Active Intelligence is needed in retail for a more resilient, future-ready supply chain
So what does Active Intelligence have to offer in these very different scenarios? In the case of the pandemic, retailers with an Active Intelligence-led framework can look to incorporate data in real-time to factor in the impact of changing restrictions and outbreaks along their supply chains. These real-time, contextual insights, based on the current situation and future projections, can help build alternative sourcing and distribution channels to stay ahead of this or future pandemics.
In the case of the Ever Given crisis, Active Intelligence could have been implemented to avert or at least mitigate its impact. By identifying adverse weather conditions, ship captains could have been notified in real-time that it was not safe to enter the canal due to strong winds, given alternative options and told when it was safe to do so again. Even with the crisis underway, such a system could have helped retailers contain its impact on operations by evaluating various factors such as shipment delays, container availability, supply and demand dynamics, and healthcare information, among other factors. Contextual insights generated by the real-time data analysis could have helped stave off potential disruptions and identify other consequential challenges. With these systems implemented, retailers could build more resilient, adaptive supply chain frameworks driven and continually refined by predictive analysis.
This is just the tip of the iceberg in regard to the difference that hyper-contextualised data enabled by Active Intelligence can make. Retailers can implement dynamic pricing based on real-time factors such as supply and demand or procurement costs. Repetitive functions like inventory management can be automated to improve business efficiency. It can even help retailers introduce hyper-personalisation in marketing and customer engagement efforts.
By implementing Active Intelligence, businesses can improve their business continuity, build stronger relationships with customers, and more effectively support their teams in everyday proceedings. They can also better protect their interests against any future global pandemic or Ever Given blockage, or whatever ‘once in a lifetime’ disruption may come next. In a world as interconnected, dynamic and unpredictable as ours, Active Intelligence is a critical strategy for business resilience, adaptability and success.
Paul Leahy is country manager for Australia and New Zealand at Qlik.