The online giants such as Amazon have changed the way Indians buy their items including personal care items to food items and consumer goods. The key to this is an integrated supply chain and logistics system. The logistics and inventory management capabilities have actually proven to be so crucial that it could become the deciding factor in retail.
I admit that I am one of the growing tribes of Indians who have tried the sweet fruits of digital and online shopping. We are not only spoiled only by the variety but also by the convenience of speedy and simple shipping of purchases, whether they are clothes or fashion accessories food items, household goods or even food items. Therefore, it was a shock to witness a top offline retailer’s online platform fail to work on its delivery and inventory management system. It started out as a simple enough procedure. I was online shopping for kitchen appliances, and discovered it on their site and then added it to the shopping cart, paid the purchase and then waited. Once I was used to this procedure, I had forgotten all about itand relied on the status of ‘in transit’ of my order. After a few days of waiting I received an unexpected shock when I received a text message from the seller stating that my order had been cancelled! The retailer had suddenly discovered the item wasn’t in stock however, their website did not provide any evidence of this. After some unpleasant exchanges and back and forth, they finally reimbursed the amount I had paid. This could be a one-off incident. It was not. I was in a similar position in two retailers that both of which are established retail brands that were able to compete.
At first, I gave them a reason – the internet is a brand new thing and they’re still working out the nuances of it. However it was pointed out by another person that they should have out that they should have avoided it until they had their complete process for managing inventory and logistic systems put in place.
It is true that newer types of consumers have been embracing the ease of shopping online, people who previously were averse to the convenience of buying items with a click. The pandemic could have contributed to the increase in sales but it was in the pipeline. The majority of brands wasted no time jumping on the omnichannel train. However, research suggests that not all were aware of what omnichannel means. It is a fact that the retail experience is evolving. A stand-alone, exclusive store in the mall might be in the near future, be transformed into an open-air store within the residential area in the future, and then emerge in its digital form within the Metaverse. But the customer on the other end of the spectrum is looking for ease of use, enjoyment and value for money. All of this can be achieved through an efficient supply chain, inventory as well as logistics and supply chain system.
According to an Mckinsey research report regarding Supply Chain of the Future states “The retail and consumer product environment continues to change as businesses try to keep up with the top online retailers. Traditional brick-and-mortar stores like Macy’s, Nordstrom, and Walmart are expanding their online offerings and are introducing new models, including the ability to fulfill online orders in-store. Online retailers like Amazon as well as Zalando are opening brick-and-mortar stores. Vertically integrated players like Bose, Burberry, and Nike are pushing hard for their direct-to-consumer offerings via both online and physical stores. Players of all sorts are supplementing their retail stores and e-commerce offerings with new applications and social media in order to establish an omnichannel presence. But, many companies struggle to achieve omnichannel success due to the demands it puts on their supply chains, particularly with regards to speed, complex and effectiveness. Customers want to get their goods at any time and from anywhere in a short period between purchase and delivery, with top service and a high degree of efficiency. Our research has shown that service is the most important aspect that retailers and brands can leverage to distinguish themselves and “delight” omnichannel shoppers.”
Logistics, inventory management and logistics are interconnected but each is an distinct sector on its own. There are plenty of indicators to show that the success of a retail company will be largely dependent on the three above. In addition, it’s not just pure play brands that need an efficient back-end logistics system. As I mentioned earlier traditional brick-and-mortar retailers are embracing the platform of digital as a logical choice, and this could mean finding ways to improve their inventory management and logistics to adapt to the changing dynamics. This could also lead to new alliances and partnerships as well as the emergence of new solution providers that will help these companies strengthen their supply chain, logistics and inventory by utilizing new ways to be compatible with the omnichannel eco-system. A lot of exciting times are coming for the retail ecosystem.
