A price-conscious consumer base is growing accustomed to using multiple channels such as social media and mobile to shop, compare products and services, and compare prices to make more informed purchases.
However, with increased online competition and thinning profit margins, combined with the balancing act of managing current IT infrastructures, many retailers are being pushed to the edge.
Driven by a combination of the current market climate and new demands of the consumer, smaller retailers are witnessing an increased level of complexity in managed supply chains. This is creating a growing sense of urgency on the part of retail buyers and merchandisers to standardize and simplify their supplier interactions.
The Path of the Supply Chain Leads to Understanding the Individual Consumer
This urgency – fueled by the pressures to increase efficiency and supply chain visibility – can only result when retailers and their suppliers begin communicating with one another. However, it is a lack of integration between channel-specific inventory and order management systems that continues to be the biggest challenge for retailers – a challenge that is exacerbated by the growing complexities of their supply chains.
That said, this has generated retailer demand for a more simplified approach to both consistent and collaborative supplier interaction and seamless integration of back end systems. Multichannel retailers know that they must displace manual supply chain processes, not only to achieve efficiency but also to improve the quality of customer information. Collaborating with suppliers on a common platform ensures accurate product information (i.e., size, color or style from the source) and allows multichannel retailers to populate their sales mediums (i.e., social channels and mobile devices) with that information in a format that is efficiently uploaded and easily consumed.
And it is the need for these technological advances that not only change the operations of an organization but also make an impact on the ability of retailers to meet the demands of the individual consumer. The key will be to ensure that there is visibility – a single version of truth – into a retailer's inventory shared on a common platform for retailers and their suppliers to access.
Retail web sites are becoming more complex with interactive applications. And, with more and more data to store, cloud-based computing and storage systems offer a cost-efficient way for web site operators to run their sites and scale up with computing power and data storage as necessary.
Retailers need to determine what makes sense to operate in the cloud. If an application is critical, and losing it even temporarily might drive customers away forever, it may make more sense for a site operator to arrange for special back-up from a local technology provider.
Many retailers are turning to Managed Services Providers (MSPs) to improve operational efficiency and enhance the customer experience. Retailers gain a single point of contact with the MSP managing the retail infrastructure, looking at the bigger picture and knowing the client's systems inside and out, so they can respond accordingly, as well as preempt technical problems.
This can only be done by having a proactive network monitoring and performing optimization around-the-clock so the retailer knows it can get help quickly, whenever it may need it. This ensures that fewer customers are affected by technology failures and will be more likely to come back, increasing customer loyalty.
With a standardized trading platform in place, it can become significantly easier and less costly for retailers and suppliers to exchange information.
Retailers are in the midst of evolving the way they are serving the individual consumer. We are now moving to an environment of anticipating what consumers may buy and where service interruptions can be forecasted and fixed before they hit. New functionality that will improve the retailer’s business is also being delivered faster, in an easy, simplified manner.
And it is the managed service provider that will help drive this evolution.
Guest Author – Andrew Monshaw is general manager, Global Midmarket Business. He is responsible for leading IBM's company-wide focus on expanding sales to midsize companies and working with our Business Partner ecosystem to deliver innovation to this key IBM market segment. Responsibilities include global sales, Business Partner ecosystem, offerings portfolio, strategy, and marketing.