As the holiday season approaches, retailers are gearing up for the annual rush, both online and in-store. The 2023 holiday season will pose many challenges due to changed consumer demand, the uncertain economy, ever increasing delivery charges and unreliable delivery service in part caused by lack of warehouse labor. During this festive, yet highly complex, frenzy, supply chain visibility emerges as a critical factor that can make or break the holiday success for retailers. Real-time Item Level Visibility (RTILV) supported by technologies such as Radio-Frequency Identification (RFID) and advanced traceability software play a pivotal role in achieving this visibility goal.
Here are six compelling reasons why retailers should make supply chain visibility a top priority, especially during the holiday peak season:
- Accurate Inventory Management
One of the primary challenges during the holiday season is managing inventory effectively. RTILV enables real-time tracking of products as they traverse the supply chain through the use of RFID technology allowing retailers to move beyond traditional barcode scanning. Paired with traceability software, this technology provides a comprehensive view of inventory levels, locations, and even product conditions. Retailers can thus maintain precise control over their stock, ensuring that popular items are readily available and reducing the risk of overstock or stockouts.
- Enhanced Order Fulfillment Speed
Holiday shoppers expect swift and reliable order fulfillment. RTILV allows retailers to monitor the progress of orders in real time. When integrated with traceability software, this data can be leveraged to identify bottlenecks and streamline fulfillment processes. By optimizing order processing speed, retailers can meet customer expectations for timely deliveries and elevate their overall shopping experience.
- Proactive Issue Resolution
The holiday season is rife with potential disruptions, from unexpected surges in demand to logistical challenges. RTILV empowers retailers to identify issues before they escalate. By tracking the movement of goods in real time and providing key insights based on the collected data, retailers can pinpoint delays or inefficiencies in the visibility platform, allowing for swift intervention and resolution. This proactive approach minimizes the impact of disruptions, ensuring a smoother supply chain operation during the critical holiday period.
- Optimized Customer Experience
Consumer expectations continuously increase and even more during holiday peak season, making an exceptional in-store experience paramount. RTILV enables retailers to go beyond basic inventory tracking. Smart shelves and real-time pricing adjustments become possible, providing customers with accurate product information and reducing the likelihood of frustration due to inaccurate stock levels or pricing discrepancies. This also creates efficiencies for in-store employees improving their jobs and allowing them to focus more on the in-store shopper.
- Data-Driven Decision Making
RTILV platforms generate a wealth of valuable data providing retailers with real-time insights that can be turned into real-time decisions. Retailers can leverage this data to gain insights into consumer behavior, supply chain performance, and overall operational efficiency. By applying artificial intelligence and machine learning on this data, retailers can make more real-time, faster, better informed, data-driven decisions that extend beyond the holiday season. This analytical approach positions retailers to adapt quickly to changing market conditions and continuously optimize their supply chain strategies.
- Increased Retail Profitability
Retail profitability is significantly impacted by supply chain visibility in several ways. When retailers have a clear and real-time understanding of their supply chain processes, it enables them to make informed decisions, reduce operational costs, enhance efficiency, and ultimately improve their overall profitability.
Enhanced visibility allows retailers to identify and eliminate inefficiencies in their supply chain processes. This can result in reduced operating costs, including transportation, warehousing, and labor expenses, contributing directly to improved profitability. Accurate visibility into inventory levels and demand patterns helps retailers optimize stock levels. By preventing overstock or stockouts, retailers can reduce carrying costs, minimize the need for markdowns, and avoid missed sales opportunities, positively impacting profitability. Clear visibility further enables retailers to minimize holding costs associated with excess inventory. This includes costs related to storage, insurance, and potential obsolescence. Reduction in holding costs directly contributes to higher profit margins. Improved visibility also facilitates better decision-making in order fulfillment processes. Retailers can choose the most cost-effective shipping methods, warehouse locations, and distribution strategies, leading to cost savings and increased profitability. Finally, supply chain visibility helps minimize stockouts by providing insights into inventory levels and demand fluctuations. This prevents lost sales opportunities and ensures that retailers can meet customer demand, positively impacting overall revenue and profitability.
The holiday peak season presents both challenges and opportunities for retailers. By embracing real-time item level visibility, retailers can ensure seamless operations during the holiday rush and also establishes a foundation for long-term success. Supply chain visibility allows retailers not only to meet but to exceed customer expectations during the most crucial time of the retail calendar.
Supply chain visibility is also a critical factor in enhancing retail profitability. By optimizing operations, reducing costs, and making strategic decisions based on real-time data, retailers can create a more efficient and resilient supply chain, ultimately leading to improved financial performance.
Author Bio
Bart De Muynck is a strategic advisor at Mojix, a provider of enterprise SaaS solutions for the automation and digitization of operations and supply chains in the luxury, retail, food, and industrial markets. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.
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