Retailbiz recently sat down with Raghav Sibal, Manhattan Associates’ managing director for Australia and New Zealand, to find out about the company’s innovative approach to the retail supply chain and why data is more important than ever.
First, why is it important for retailers to have good supply chain processes in place?
When a company introduces processes delivering a more granular understanding of inventory across the entire network and information on a customer’s preferences and purchase history, it has far more ability to take advantage of that information to match supply with demand and get goods into the hands of the customer in a way which is both timely and convenient.
Visibility into network-wide inventory allows a company to do a better job accessing inventory to fulfil a customer order profitably, as well as change transportation routes and balance supply and demand according to market conditions. But before that can happen, a business needs data from a number of different channels and processes: from its warehouses, stores, website and finished goods supplier or manufacturer as well as from freight forwarders, 3PLs and local carriers. If this data cannot be consolidated and rationalised, a company is failing to exploit significant business value.
With data as a primary resource, the system’s architecture—how one collects and aggregates the data to make sense of it—becomes critical. The back-end technology that supports and maintains the data must be open and able to accept input from different sources and in different formats. The flow of data is only going to increase for every type of business. Gaining visibility will become a more acute priority as supply chain and business leaders seek more value from their data, but the right tools and processes need to be in place for professionals to be able to access and understand it and to use it intelligently.
How have supply chains changed in recent years?
It’s undeniable that supply chains are evolving around the world. In Australia and New Zealand there are significant changes around how retail items are delivered today compared with even five years ago. This is due to the rise in usage of mobile technology by consumers, the rapid growth in online retailing (which has resulted in the need to deliver direct to residential addresses as opposed to warehouses or storefronts) and increased timeframe demands around deliveries made to consumers.
Omnichannel has had a huge impact on the operations and business models of many local businesses, but it has also had a tremendous impact on the need for flexible and efficient supply chains and better visibility of inventory and customer transactions.
What are the most important things for retailers to consider when thinking about their supply chains?
After years of in-store underinvestment and a devaluation of the store experience, retailers are entering a new era of personalised customer service. To achieve this new vision will require a significant transformation and three essential pillars of information: complete visibility of customer orders, purchase history and preferences in one place; up-to-date product file, including shipping and location costs; and a single, real-time view of inventory, network-wide.
With these three key components in place, retailers can begin to explore other opportunities for differentiation and improving the customer experience, from the adoption of single swipe transactions to express click and collect and a seamless returns process.
The good news is that this shift represents a massive opportunity for retailers willing to evolve as they can quickly outpace the competition. The combination of increased sales and decreased operational costs resulting from this new model enables retail organisations to devote capital in other areas and further their advantage. As those companies gain momentum and market share, it becomes continually harder for competitors to make up lost ground, underlining the importance of keeping pace from the start.
Omnichannel continues to grow, what are common problems retailers encounter when scaling up this part of their business?
Consumers want a frictionless experience. That means buying online, collecting in-store, swapping their purchase for a product of different value or spending vouchers to buy something a little more expensive—all in one transaction. It also means an in-store experience that includes pertinent recommendations, for example a pair of shoes to go with the dress bought last week, a cashmere throw to complement the cushions being collected. Today, just a few retailers—the world’s most innovative—have the tools, technologies and processes in place that empower their sales people to deliver that quality of experience.
As the various retail sales channels have evolved at different times, most organisations have built and managed systems to address those channels individually. However, we’re now at a turning point where those individual legacy systems can no longer meet the demands of the consumer. With cross-channel shopping now accounting for upwards of 40 per cent of total retail revenue, retailers cannot afford to miss out on such a large piece of the sales puzzle.
Retailers now understand that their omni-channel strategy needs to focus on much more than simply supporting the various sales channels through which consumers shop. All of those channels must be woven together into one cohesive structure. The next step retailers need to make is ensuring that the structure is flexible and supported by knowledgeable, empowered in-store sales people or customer service staff.
What are some supply chain innovations you’ve seen?
Over the past year Manhattan Associates’ solutions have evolved to address new challenges retailers are facing as the omnichannel and ecommerce areas of their businesses expand rapidly. Retail operations are under more pressure than ever to fulfil orders in shrinking timeframes. Manhattan has built applications specifically catering to the needs of ecommerce and omnichannel commerce to help retailers better meet customer demand.
Manhattan has also witnessed a changing workforce, with many university students and graduates taking short-term contracts, often during peak periods where retailers have increased orders to fulfil. These shorter-term millennial workers often take contracts during which they use their own mobile device at work. Manhattan’s ecommerce app can be easily downloaded and used by these workers to fulfil online orders. For retailers that are today facing much higher turnover in their workforce, it is vital that their workers are able to access apps that are intuitive and easy to train on. A younger workforce also demands more advanced technology, which today means apps on mobile devices.