As retailers juggle peak demand with the constraints of the pandemic, can our logistics operations hold up?
2020 has been one of the most unpredictable years in living history. It’s seen a seismic shift in how we work, live, shop and socialise; most likely leaving a lasting impression on how we go about our daily lives forever more.
Retail and logistics has been one of the sectors which has required a pivot in operations. Unlike many other sectors – like financial or professional services – employees have not been able to work from home. As front-line staff, many have been required to go into work each day; ensuring social distancing regulations are adhered to, and service levels continued to be met. Of course, some have been unfortunate in terms of furlough, whilst high street shops were closed, but now we are seeing the majority back in work and doing all they can to maintain normality in the most disruptive of times.
As part of this desire to retain an element of normality within retail, the British Retail Consortium’s (BRC) campaign to start Christmas early is an interesting one for the industry. It’s meant to bring much needed buoyancy but it also could trigger headaches for those working to traditional timescales.
For example, the campaign centres around switching on the Christmas lights earlier than normal. We all know that the London switch-on is the signal that Christmas is here – akin to the Coca-Cola advert. People will visit and not only retail, but hospitality will benefit too from more people nearby. This could bring about a surge in demand for restaurants, meaning suppliers may well be required to up their orders at relatively short notice. Plus, with restrictions on who and how many people can dine in or out changing quickly, it has the potential to lead to excess or scarce stock.
This brings us on to the most practical consideration – getting people spending early means having the necessary stock levels and delivery capabilities to accommodate this. Yes, it should level out demand as it will be spread more evenly over the golden quarter, but this relies on consumers getting involved in the campaign. However, on the flip-side it could front-load demand to the point retailers can’t keep up.
The pandemic has exposed flaws in some retailers’ supply chains, and a Christmas rush has the potential to do so once again. Distribution will be a key battleground, as retailers and logistics partners are operating under strict social distancing measures, perhaps with fewer operatives in the warehouse and affected by supplier lead times. It only takes one delay to disrupt operations significantly, which will then impact the user experience. So, whilst theoretically it makes complete sense to encourage consumers to spread their spend to ease the pressure on lead times in case something does go wrong; it is not always feasible. There is no magical remedy to this issue, but optimising slick front and back-end retail operations will help accommodate this process.
Traditionally physical retailers, such as those in the grocery sector or retail, prioritise investment into their brick-and-mortar stores – but this will no longer cut it, especially this year where online will most definitely come to the fore. Even those with a multi-channel offering must reassess whether their eCommerce and online fulfilment processes are as seamless as they can be. They should be looking to implement an end-to-end initiative that covers everything from the eCommerce experience and warehouse practices to order fulfilment and how their physical and digital offerings collaborate to keep up with demand.
By implementing an integrated platform to facilitate eCommerce and fulfilment, retailers will be able to take advantage of a closer integration between their online and brick-and-mortar offerings to better serve customers hungry for a Christmas bargain. A connected end-to-end solution can enable retailers to achieve quick delivery to customers from local stores, and will allow shoppers to receive the items they want even if they’re out of stock in the warehouse; ideal in the festive period when retailers want to shift stock before the January sales. The seamless integration of information from an OMS is vital as it will enable staff to keep track of stock levels across the retailer’s entire estate and leverage it to fulfil orders when customers would previously have been told that their item is out of stock, causing them to look elsewhere – optimising opportunities to sell.
With the current unpredictable political and economic landscape likely to continue into next year, it’s hard for retailers to predict sales levels. Some have money to spend after months of home working, saving on the commute; whereas others have sadly seen wages hit. Whilst you could argue the BRC’s campaign is designed to encourage spending whilst some have the funds, retailers should also be wary that others will be tightening their belts as a result of lost income from the pandemic. With the proliferation of buy now, pay later payment platforms this might be negated to a degree, but for many this Christmas may not be a happy one.
Retail is a cornerstone of the UK economy, and as we progress through the ‘golden quarter’, with sales days coming thick and fast, and initiatives to get us spending, retailers hopefully will be able to find some joy in a turbulent year. However, to give themselves the best opportunities, they can’t forget the holy grail – customer experience. It will be a bun fight, so those whose processes are optimised best and can leverage their channels and store estates to manage their stock efficiently will no doubt come out on top, no matter when people start buying.
This article was written by Tom Williams, Head of eCommerce at Naveo Commerce. This article was originally published by CILT Focus, you can view the magazine entry here.