Five supply chain trends to watch in 2021

Raghav Sibal, Manhattan Associates’ Managing Director for Australia and New Zealand shares five key trends with MHD that will impact the local supply chain sector in 2021.

The future is always uncertain, but perhaps now more than ever. A global pandemic has accelerated innovation in supply chain industries to ease disruption and meet consumer expectation. Raghav Sibal, Manhattan Associates’ Managing Director for Australia and New Zealand says that with disruptions from COVID (and other sources) expected over the coming 12 months, it will be those companies with the ability to adapt and move goods in spite of changing operating and market conditions that will succeed. He has identified five trends that will impact the local supply chain sector following this unprecedented year of change.

1. Resilience and flexibility will be critical factors in the success of supply chains in 2021

Advanced systems are key to delivering on flexibility and meeting customer expectations. Manhattan Associates customer, Super Retail Group, used the Manhattan Active Omni solution to accommodate major order and fulfilment changes within minutes as a result of COVID-19 disruptions within Australia (and Victoria specially) this year. With Manhattan, they were able to change their fulfilment logic so that orders that were going to be shipped out of Victoria were stopped when the lockdown measures were announced in that state due to its second wave of infections and they were able to re-allocate all pre-planned shipments out of Victoria within minutes. Additionally, the system allowed Super Retail Group to deploy a ‘site outage’ action for both their DCs and stores so that if any site is unable to trade (such as due to a positive COVID-19 test or other reasons) they can quickly close that site and redirect order activity to be fulfilled elsewhere. It is this type of approach that will enable businesses to adapt quickly to changing operating conditions and ensure that customers still receive their goods in a timely manner.

2. In the future, the instore experience needs to be as seamless as online

Australian consumers’ expectations since the pandemic began are sky high and their loyalty will be harder to attract than ever before. This means one bad experience or poor customer service interaction could see a shopper abandoning their purchase, or even the entire brand forever, and being sent straight to a competitor. Recent research shows that shoppers’ have high expectations that retail staff will be knowledgeable about all products and know when out of stock products or new products are due in store. Today the in-store experience must meet (or surpass) the online experience with seamless, interwoven touches such as expert product knowledge and often acknowledgment and understanding of their digital behaviour. This poses a new challenge for retailers who must lift their in-store experience to new levels and ensure that staff are supported by the right technologies that deliver product information and stock availability data at hand.

3. Retailers need to listen to their customers and tailor their approach to ecommerce 

A Manhattan survey of 2,000 Australian consumers and 100 large-end retailers, found that the largest group of consumers said they consider home delivery in 2 or more working days to be the most useful option when online shopping, whereas only 6 per cent of retailers said that this was the most popular delivery option with their customers. Almost 50 per cent of retailers said that Click and Collect in 2 plus working days was the most popular delivery option amongst customers, which contrasted with only 6 per cent of consumers agreeing that this was the most useful delivery option. A further 31 per cent of retailers stated that same day home delivery was the most common delivery choice with customers, however, only 8 per cent of consumers consider this to be the most useful choice. Only 27 per cent of retailers reported charging for same day or next day delivery. These research findings indicate a major divide between what retailers believe is the desired delivery option, compared with what consumers really want or find most effective. This could mean that the delivery options retailers are offering today are not in line with consumer expectations, leading to unnecessary pressure on already stretched supply chains to deliver goods quicker than consumers actually expect or need them.

4. Businesses can’t sell what they can’t see

Recent Manhattan research highlighted an ongoing issue for retailers and their supply chains. Only 6 per cent of Manhattan survey respondents indicated they have accurate inventory insight 100 per cent of the time. The biggest group of retailers said they only have visibility 26-49 per cent of the time, while another 36 per cent said they only have visibility 50-75 per cent of the time. Put simply, retailers can’t sell what they can’t see, and this concerning lack of stock visibility and supply chain visibility in general, especially when the bulk of retail activity is currently online, is risking lost sales opportunities. 2021 will show just how important it is for retailers to have real-time insights into their supply chain operations and product inventory, so they can stay informed and react quickly to sudden changes in the market.

5. ‘Fulfilling from store’ should become the new supply chain ‘normal’ in 2021 

The consumer behavioural shift to online shopping, which has been accelerated by COVID-19, has increased the business case for an expansion of hybrid fulfilment methods that blend ecommerce and store resources. Hybrid fulfilment offers retailers increased flexibility enabling them to pivot, scale, adjust and respond to changes. Fulfilling online orders in retail stores is a by-product of this new economy. Customers enjoy picking up online purchases in local stores, which satisfies their insatiable demand for immediacy and flexibility. Further, ship-from-store is vital in an age where ecommerce orders are booming, and bricks and mortar operations are operating at much lower levels. It makes little sense for a retailer to ship a large electronics item from their Melbourne-based warehouse to Cairns, if that same item is already available in a retail store in large volumes in Cairns. Manhattan has technologies that support underutilised retail staff to handle store order picking, staging, packing, shipping for fast delivery and customer pickup.

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