By Prateek Sinha | Supply Chain Digital
With Christmas now a distant memory, retailers across the UK will be taking stock of how they have performed during the annual madness that is the January Sales. With indicators of an economic recovery seemingly everywhere, this year’s reckoning will be more important than most and any decline on last year pondered over in great detail.
As many retailers are aware, having a successful sales period involves much more than simply cutting prices and hoping for profitable growth; customer experience is vital and involves ensuring that the supply chain is working as effectively as possible to deliver on exacting customer demand and expectations.
There is some evidence however, that many retailers are not yet able to get supply chain management right every time. In fact, a recent Infosys study found that UK high street retailers are missing out on sales opportunities due to not sufficiently planning their supply chains. Nearly three quarters (71 per cent) of British shoppers have regularly faced in-store stock shortages, causing them to shop elsewhere or delay their purchase. So, what can retailers do to avoid such mishaps during one of the busiest shopping periods of the year?
Optimise the in-store experience
The first thing is to offer the best possible customer experience in-store. Beyond having a well-designed store staffed by well-trained employees, this also largely comes down to how closely a retailer works with its trading partners and suppliers.
Close cooperation allows retailers to build an ‘ideal store’ environment (one where the store is designed to fit customer requirements exactly) which increases basket size and display conversion rates – crucial for the sales period. Once the sales are over moreover, these relationships are essential for launching the next season’s range of goods as they can help reduce the time it takes to introduce new products while eliminating ‘out of stocks’ to improve the customer experience.
The ability to do this effectively comes down to transaction and stock data being effectively shared across the supply chain, especially between the retailer and the consumer goods brand. This ensures that sales stock gets delivered at the right pace to meet demand while helping to guarantee that no unsold stock remains at the end of the sales period.
Our study however, suggests that for many retailers this level of communication with trading partners is not happening. In fact, only 16 per cent of retailers share customer data on a daily basis, suggesting that the majority will face difficulties in meeting customer demand during the sales period. It is a fair bet that the organisations that boast the best sales by the end of the month will be those that communicate well across the supply chain.
Multi-Channel Demand Management
Crucially, getting the customer experience right means getting a view of the demand across all channels. In this respect, the greatest opportunity for retailers lies in joining up the transactional data they get from in-store, online and mobile. The ability to unify this sales information and use it to provide a single view of each customer is hugely beneficial as retailers look to shift a lot of stock. This is because such a view enables them to offer customer-relevant bundles, ancillary products, accessories, and deliver useful marketing information, such as showing customers ‘what others like you’ bought.
The best retailers will also look outside of the organisation to gain a wider understanding of customer buying behaviours and psychologies during the January Sales. Social media, for example, gives retailers the opportunity to understand customers both in terms of individual behaviour and how they behave as part of wider social communities. This includes vital information such as what shoppers browse, social interests, locations, sentiments, searches and reviews. By connecting this to transactional information, retailers can understand the customer like never before and use this understanding to target them much more effectively.
A new reality for retailers
The way in which people communicate with their favoured retailers is changing dramatically, driven by advances in mobile and online technology. Organisations need to adapt to this new reality and use it to their advantage to drive success not just around the January Sales period, but throughout the year. This means collecting the right supply chain data and implementing a joined-up multi-channel experience that is based on openness and co-operation with all trade partners. While this requires a change of mind-set and ways of working it will enable a much more effective and efficient retail organisation, one more than capable of making the most of the January retail opportunity.