“The digital media revolution is not just an added channel as most bricks and mortar retailers seem to regard it,” said Miller. “It is the tip of an iceberg and has the potential to rip the base out of the retail sector as we know it today.”
“Development of a cohesive strategy addressing all the channels a retailer chooses is critical to the success of today’s retailers,” said Miller. “A sound, analytically based understanding of customers’ values and satisfaction drivers, particularly for their target customer segments is also a necessity.”
Miller also pointed out that development of a multi-channel or cross-channel strategy involved decisions about their supply chains not just retail space. He went on to say that supply chain costs can be significantly reduced. Steps to reduce inventory costs, refine shop stocking strategies and create seamless servicing of all channels will put retailers in a strong position for future retail success. In addition, retailers need to consider potential new roles for shops and develop delivery / collection options for their shops, such as local ‘hub-based’ deliveries and localised distribution centres to hold stock and manage local deliveries.”
Miller also highlighted the potential for reduced supply chain costs through ‘customer expectation education’. If customers are offered lower prices and an increased product range, many are willing to wait longer for delivery or tolerate lower levels of in-store assistance. As retailers well know, remaining viable and competitive in the new global retail sector is not just about improving the existing ‘customer experience’ through superior service.
In summary, Miller stated that to achieve the three primary supply chain execution objectives, right product/right place/right time, three primary supply chain capabilities need to be in place:
· Supply chain visibility, particularly for ordered but not received inventory, to improve forecast accuracy
· Increased supply chain responsiveness, both internal and external, in all service channels
· A balanced distribution network capable of meeting the fulfilment shifts in cross-channel growth.
Matt Miller and the GRA team are available to discuss your retail strategy issues in further depth. Please contact GRA on (03) 9421 4611.