An unprecedented combination of circumstances is culminating in a perfect storm for retailers and brands. This blog unpacks the turbulent retail environment, how this is impacting retail operations and how brands can avoid damage to their business by leveraging innovative technologies.
Challenge #1 = Economic climate increases
The UK has seen the biggest and fastest rate of inflation recorded in over 40 years. Prices have jumped a massive 9% in the 12 months leading up to April 2022 according to BBC News.
Challenge #2 = Energy price increases
In April 2022, energy prices rose for businesses and households, making it the highest gas and electricity price hike ever. This has piled extra pressure on business operational sites as well as the worker's livelihoods.
Challenge #3 = Customer spending decreases
As a result of the first two challenges, it has led to tighter purse strings amongst consumers. People are spending less to combat these other increases and minimise their outgoings.
Challenge #4 = Raw materials increases
The raw materials market has been under considerable strain since the pandemic. Demand is still high amongst businesses but supply is short, influencing the highest prices ever seen worldwide.
Challenge #5 = Logistics havoc
The covid crisis changed the way we shop and receive goods, starting a sequence of logistical challenges and supply chain nightmares. Not only was it hard to ship between countries, but it also created a mass shortage of delivery drivers among other things.
Challenge #6 = Customer demands rise
As businesses scrambled over the pandemic to provide goods and services in new ways, consumer expectations increased. We wanted more delivery options, faster shipments, more customisation and more digitalisation. As the covid risk has reduced, customer demands have not.
The perfect retail operations storm is brewing
All of these circumstances are creating a volatile demand pattern for retail operations to overcome. Supply chain networks must stay agile and diligent to keep ahead of the demand and disruption, all while ensuring they satisfy their customer's needs and remain operationally efficient, despite balancing increasingly fine retail margins.
Striking the perfect balance
One of the saving graces in all of this has been technological innovation. New technology has enabled agile organisations to keep up with these stormy times and advances such as machine learning and digital twins have enabled businesses to predict and evaluate different sets of circumstances for their business before implementing real programmes. This allows an organisation to test different scenarios and find the most beneficial and efficient solution.
Technology can help retail businesses monitor economical changes, project impacts on their business, scale more efficiently and bring entire supply chains together to collaborate. Take Yoobic for example, a digital workplace for frontline teams. Their platform helps employees and wider supply chains communicate seamlessly and digitise their operational tasks using a unified system. One of their clients Lancôme, the luxurious makeup, skincare and fragrance retailer, was able to eliminate low-value work, elevate standards and gain real-time visibility into what was happening in each store. The Yoobic system enables the brand to identify problems instantly as opposed to months of not knowing, and implement efficient changes.
Another technology aid is StorIQ, a retail operations platform that brings the detail together in a single application. M&S International used this technology solution to improve brand standards and compliance across all 1,519 stores worldwide. Now all of the brand’s store portfolio has streamlined retail operations and it's transformed the communication channels with its franchise partners.
Synerise, another innovative platform that provides in-depth knowledge about customers through real-time AI-based analytics and insights, helps customers increase their sales, prevent churn and boost customer loyalty. One customer called Eobuwie.pl, specialising in online sales of footwear, handbags and accessories in Central and Eastern Europe, chose the Synerise technology solution to support their digital transformation process and enhance their omnichannel presence. Its integration of data on user behaviour in one unified place and the possibility of managing it in real-time on over 30 business profiles across the group enables Eobuwie.pl to provide the customer with a shopping experience tailored to their preferences and needs. The Synerise ecosystem delivers unique knowledge about customers based on the analysis of data from each touchpoint with the company. It creates individual profiles and dynamically segments groups of recipients to give highly personalized messages through multiple channels. These solutions have a real impact on increasing the retention of a brand’s customers, which directly translates into the achievement of sales goals.
Improving your retail operational efficiency can be achieved in multiple ways using a combination of techniques such as automation, omnichannel, inventory management, in-store transformation and logistics programmes, and there are plenty of tech vendors available to help you get started.
Try out Validify’s hassle-free vendor management platform to discover, evaluate and select the best technology solutions for your retail operations by creating a free account today.
You may also like to read this: How to attract more customers using digital transformation technology in retail stores