2023 Gartner® Market Guide for Retail Store Inventory Management Applications
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Retailers are constantly looking to make efficiency gains to boost their overall performance. In fact, 67 percent of retailers state overall business operations efficiency to be of critical importance. Operational efficiencies enable retailers to cut costs, reduce risks and increase outputs, resulting in overall business growth. However, many retailers still struggle to serve customer demands accurately and quickly whether in stores or online. Research reveals almost one in three retailers struggle with operating performance.The challenges range from human error and lack of stock visibility to delayed fulfillment times and wasted use of labor. These hurdles damage customer experience and negatively impact retailers’ bottom lines. As customer experience is expected to overtake both price and product as a competitive advantage, retailers can’t afford to harm or ignore the experience they provide customers.In a world where consumer behaviors are constantly evolving and retailers are striving to keep up with these needs, ineffective operations will lead brands to fall behind. Instead, consumers will turn to the brands whose operational systems can deliver a better customer experience.
To achieve operational efficiency and thrive in the future of retail, brands must establish a customer-focused supply chain driven by innovative technologies such as artificial intelligence (AI).
E-commerce in the last year has grown by 46 percent, its strongest growth in more than a decade. Physical stores were closed, forcing shoppers to move entirely online. Interestingly, even as stores have reopened, people have continued to shop online, enjoying the conveniences e-commerce delivers. Expectations to make those experiences even more convenient is only growing.
The traditional linear supply chain can’t keep up with modern customer desires. Only 8 percent of executives believe their businesses are structured correctly to operate in this new environment.
Most supply chains are hampered by insufficient inventory visibility and accessibility across online and retail channels, legacy systems with limited capabilities, cross-channel returns, and organizational silos. Those retailers that have evolved along with their customers are enabling cross-channel shopping with multiple delivery options that are timely and accurate, communicating frequently with shoppers, and providing hassle-free returns through whatever channel the buyer prefers.
Transforming outdated operations is central to delivering superior customer experiences. Satisfied shoppers are twice as likely to be repeat shoppers. Putting them at the center of supply chain decisions is the best way to keep customers returning and becoming brand advocates.
An honest assessment of current processes from the customer’s perspective is essential to identify disconnects and gaps in workflows and processes that get in the way of delighting customers.
Identifying the gaps requires retailers to first understand what customers want from their shopping, buying, delivery, pickup and returns experiences so they can adjust to deliver those requirements. Do customers want record-time deliveries, accurate deliveries, free deliveries, faster returns, or all of these? Acknowledging customer expectations will help optimize the processes.
AI can reveal insights at the heart of reducing inefficiencies and streamlining end-to-end operations. In fact, research suggests that more than three in four (78 percent) businesses that employ AI will improve operational efficiency by more than 10 percent. With AI, retailers can ensure they make decisions and create processes that protect and advance customer experiences while also optimizing costs.
Overall operational efficiency requires real-time visibility and communication. Lack of visibility and communication prevents effective monitoring and management and impacts the ability to respond to customer inquiries in a timely manner, resulting in wasted human time and effort. Rather than enhancing the overall customer experience and focusing on higher value responsibilities, workforces are spending more time monitoring and managing end-to-end processes.
With the real-time visibility and communication AI technology enables, retailers can ensure a 360-degree view of their entire operations. These insights can reduce the chances of miscommunication and incorrect information as well as bolster their ability to quickly react to — and even anticipate — sudden changes in circumstances.
Not only can AI provide real-time inventory visibility across warehouses and stores, but it also monitors, manages and improves daily performance to ensure orders and items are received and shipped out to individual customers and stores on time. AI also improves worker productivity by automatically assigning the right tasks to the right teams at the right times based on real-time customer expectations. This boosts performance by focusing employees on higher value responsibilities dedicated to delivering an enhanced experience to customers. AI puts the customer at the forefront of fulfillment activities so that their desires are met and they don’t turn to competitors for what they want.
The pandemic has highlighted that operating processes in their current state aren’t prepared to tackle sudden disruption, uncertainty, and changes in consumer behavior. To achieve absolute operational efficiency, processes must be adaptable, agile, resilient and flexible. They must be capable of scaling up or down as needed to meet changes in shopping habits, supply chain disruptions, and peaks and troughs in activity. AI’s ability to absorb data and calculate the best outcomes is a meaningful advantage in an always-changing environment.
Retailers can utilize data from AI to calibrate the outcomes of various decisions and guide activity according to consumer demands. AI also can predict and forecast trends to remain one step ahead and support better-informed retail decision making. By taking advantage of real-time data, retailers can understand how to coordinate their workers to fulfill the right orders at the right time.
Operational efficiency relies on customer satisfaction and experience. Operating systems must evolve to deliver those key characteristics. By deploying AI-capable systems, retailers can equip their operations to adapt to changing circumstances so that they continue to deliver optimal experiences to all customers regardless of evolving preferences in shopping channels, item choices, and costs and conveniences of delivery and return options.
Akash Gupta is chief technology officer of GreyOrange, a global company that modernizes order fulfillment through artificial intelligence-driven software and AI-driven mobile robots built together so they cooperate in deciding on and executing warehouse activities that maximize payoffs and minimize tradeoffs to create the highest yield.
Read full article at Total Retail.