Why supply chain visibility is key to APAC retailers

Retail is one of the sectors hit the hardest by the Covid-19 coronavirus pandemic, with many bricks-and-mortar stores shuttered by lockdowns and consumer spending pivoting online.

Those with non-existent or rudimentary e-commerce operations are now struggling to catch up, while more established retailers with an omnichannel strategy are realising that they do not have complete visibility over their supply chains to improve fulfilment rates and reduce inventory issues.

According to Zebra’s latest Asia-Pacific shopper study, 88% reported that maintaining real-time inventory visibility was a significant challenge, with 85% noting that their company needed better inventory management tools.

In most cases, this was due to the plethora of systems that retailers use for their e-commerce, customer loyalty and point-of-sale operations, leading to a fragmented view of different parts of their supply chain.

Stitching the pieces together is key to maintain consistency in the overall customer experience, starting with combining online and offline data to understand what products to stock, where and in what quantities. Only then can retailers optimise inventory turns and increase margins, as well as improve consumer conversions.

“To be able to pivot and transform your business effectively overnight is very hard to do if you can’t guarantee inventory,” said George Pepes, vertical solutions lead for healthcare and retail at Zebra Technologies in Asia-Pacific.

“And if you can’t guarantee that you’re going to be able to supply someone with an item, you’re going to have a bad customer experience and people aren’t going to stick with you as a brand just because they’ve stuck with you for a while now,” he added.

Retailers are aware of these challenges and plan to stock up on technologies to streamline their supply chain and make sense of inventory data, particularly through prescriptive analytics.

“Prescriptive analytics is basically taking a look at what’s happening at any one point in time – whether it’s via mobile computers that a store associate is using or the scanners at the point of sale system – and then utilising that data to make smart decisions on the fly,” Pepes said, noting that 73% of Asia-Pacific respondents in the study plan to start using prescriptive analytics.

Pepes said such real-time data on inventory levels would have been helpful to retailers that were caught off-guard by the rate at which household items such as toilet paper were being emptied out before lockdowns came into effect.

Putting that the visibility into the hands of front-line staff is just as critical. With handheld devices, Pepes said store associates will be able to advise customers if an item is available in store or at a warehouse – and have it shipped to the customer or a store to be picked up later.

“It’s about making sure that they’ve got that visibility to be able to do what they need to do, and that’s to give you the options rather than say, ‘I’m sorry, I don’t know’, and leave a bad experience for the consumer,” he said.

Pepes encouraged retailers to implement technologies such as radio frequency identification (RFID), which has been around for a while and offer a bird’s-eye view of what is in a store, distribution centre or on order from a manufacturer.

Amid concerns over the cost of RFID tags that vary widely depending on the application, Pepes called for retailers to focus on the overall benefits and visibility that the technology brings, such as the ability to ship products from locations closest to a customer to minimise delivery costs.

“Once we start having those conversations, we’ll stop having conversations about how much each tag costs, because the benefits and the return-on-investment are far greater, especially now that a lot of retailers need to transform their businesses to survive,” he said.