Retailers Say Meeting Growing Online Demand Is No. 1 Business Challenge
For retailers, the word “pivot” has been used time and again to describe what they’ve had to do to deal with the pandemic. But “pivot” is probably not a strong enough word to describe how retailers have had to deal with the upheaval created by COVID-19.
According to “Managing Through Disruptive Times with Data-Driven Speed and Adaptability,” a recent report from Retail Systems Research (RSR) based on a survey of 160 retailers, it is simply unfair to ask retailers to have adapted in as many ways as the market demanded of them between the first and second quarters of 2020.
“What worked until very recently no longer works,” said Brian Kilcourse, managing partner at RSR, a marketing intelligence company based in Miami, and co-author of the report. “How the buy (supply-facing) side of the retail business model is designed and how well it is synchronized with the new sell (customer-facing) side of operations has become front-and-center for retailers.”
Key findings of the survey include:
• Regardless of their size, what products they sell, or where they are located, retail respondents noted they were entirely unprepared for a world where every product is bought online. More than one out of every two retailers who participated in the research cites the ability to meet growing online demand as their No. 1 business challenge, according to RSR. The fact that long-established and highly efficient trade routes were completely shut down for months on end — coupled with a full upending of worker and product safety protocols — only further compounds these problems.
• When it comes to the opportunities they perceive, retailers want help predicting what products they’ll need on hand. Because the uncertainly of the past year removes the ability to forecast based on historical data, those whose sales are already outperforming the industry average place a much higher emphasis on the value of data coming in from external sources, RSR found. In fact, 77% of these “retail winners” cite “being able to produce highly accurate and granular forecasts” as the highest value thing they can do to better align supply with demand, and that means turning to next generation intelligence tools for help.
• The very first roadblock retailers self-identify is their own systems. Quite simply, old technologies cannot support the agility they so desperately need, the survey found. Equally as outdated? The reporting systems riding on the backs of these technologies that are meant to inform users on the state of the union. This is a dangerous combination, and respondents are virtually split (46% select each as their top inhibitor) as to which one is worse, RSR said.
“Managing Through Disruptive Times with Data-Driven Speed and Adaptability” contains analysis of the business drivers, opportunities and organizational constraints surrounding supply chain and planning operations within retail. It can be downloaded for free here.