Covid-19’s impact on the retail supply chain

The Covid-19 coronavirus pandemic has exposed gaps in the ability of retailers to mitigate supply chain imbalances and offer an omnichannel customer experience, among other challenges in the retail industry.

That is according to Sameer Dhingra, director of retail and consumer packaged goods at Google Cloud in Asia-Pacific and Japan, who noted that these challenges have strong implications on the infrastructure and platforms that retailers are using to gain visibility into their supply chain.

Elaborating on the challenges, some of which had affected retailers in consumer segments such as cycling goods that saw a surge in demand amid the pandemic, Dhingra said that with the purchase cycle no longer linear and the push towards e-commerce, retailers would need to have a “giant supply chain”.

“They will need to have real time visibility across the value chain so that they are able to manage fulfilment as well as customer experiences,” he said, calling for retailers to rebalance supply chains that had been distributed and fragmented.

Meanwhile, growing consumer demand for product customisation and personalisation is driving the shift towards mass customisation, which will have an impact on supply chains. “That is a big challenge for retailers because it means you need to look at the supply chain and manufacturing very differently,” he said.

With more consumers preferring to engage with responsible and sustainable businesses, the importance of having sustainable sourcing, procurement and retailing has also emerged.

“To a large extent, values-based buying and what the brand and retailer stands for now needs to be look at very seriously,” said Dhingra, noting that this will have an impact not only on cost but also create operational and cultural challenges for supply chains.

According to Zebra’s latest Asia-Pacific shopper study, 88% of retailers in the region reported that maintaining real-time inventory visibility was a significant challenge, with 85% noting that they 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 maintaining 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.

According to Dhingra, having a single pane of glass, strong connectivity and a technology stack that supports multiple touchpoints, including physical and online retail channels, could help.

This technology foundation will enable retailers to create intelligent stores underpinned by data analytics and artificial intelligence capabilities,” he said. “Once you have the connected and intelligent core, then you can talk about automation and driving visibility across the whole value chain.”

According to the e-Conomy SEA 2020 study by Google, Temasek and Bain & Company, over a third of 2020’s online commerce was generated by new shoppers, of which eight in 10 planned to continue buying online in future.

By 2025, the global merchandise value from e-commerce in Southeast Asia is tipped to hit $172bn, up 23% from $62bn in 2020.