Commentary

Opinion: Why digitising supply chains is so vital for bricks and mortar stores

Exponential-E

David Sharpe, senior account director at Exponential-e, discusses how retailers can use the cloud to better enable their store networks.

According to the latest PwC report, around 14 shops are closing across the UK every day, as the nation’s high streets face one of the most difficult seasons in half a decade. A cursory glance at recent headlines demonstrates all too clearly that the convenience of online shopping is a threat to traditional bricks-and-mortar (B&M) retailers that shows no signs of easing off.

As the world of technology continues to evolve and the convenience of online shopping increases, physical retailers know they need to adapt and change to keep up with their competitors. Now accustomed to holding high-powered technology in their hands, customers expect nothing less than a fluid, omnichannel experience when shopping. Customer intimacy, too, is expected – and a must.

Naturally, intelligent customer-facing interactions are where B&M stores excel, in contrast with the relative anonymity of the interactions provided by Amazon – but the B&Ms can’t capitalise on these interactions without the right information to hand.

This is where the power of supply chains becomes most apparent. After all, no shop is an island; each shop works with a variety of organisations, from SMEs to large enterprises, in the complex supply chains that power the economy. As such, the importance of a well-connected supply chain cannot be overstated – and a fragmented supply chain could jeopardise everything.

 

The power of cloud

A fragmented supply chain throws up two challenges. Firstly, if B&M retailers can’t bring together data from their supply networks, opportunities will be missed to optimise supply chain efficiency. Secondly, failure to integrate complex legacy systems presents a real barrier to digital transformation.

Digitising the supply chain is vital for the retail sector. It gives real-time visibility, and this is needed to gain valuable consumer insights that help cultivate the closer customer relationships that are the primary benefit of digitisation. New business models, higher revenue, and more cost-savings will follow from establishing such relationships.

To achieve the necessary transformation, physical retailers need a complete cloud-focused culture shift. By harnessing cloud technology, retailers can keep a much more accurate eye on the channels of goods flowing into their shops; this enhances workflows in real-time, thanks to heightened communication between every part of the supply chain – from warehouse management systems, to material handling equipment, to the sales staff in-store.

What’s more, highly-scalable hybrid cloud technology can keep things running smoothly by growing or shrinking capacity as quickly as a store’s business demands – scaling in line with seasonal and promotional spikes and dips.

Furthermore, physical retailers who adopt such technology will gain the capacity and secure environment required for advanced data analytics and machine-learning technologies, improving customer insights in the process. After all, the most successful retailers refer to cultivated insights to anticipate what their customers want – and then give it to them.

What do customers want? Firstly, a personal relationship: to feel that a retailer knows them and cares about them as individuals. Secondly, and even when shopping offline, customers want to feel they are shopping with an innovative, fast-moving retailer that’s always striving to give them the best service that technology can provide.

For physical retailers, cloud technology and the right cloud provider can cater to all of these customer expectations – but they have to be managed correctly.

 

Getting cloud right – and staying supply chain-savvy

B&M retailers can maximise their cloud ROI by using the right cloud management platform (CMP), supported by the right supplier. A CMP allows for the selection of the right cloud for each use case, boosting efficiency. They also need to use a hybrid cloud model, to give them the agile and responsive platform they need for innovation – a platform that needs to be backed up with services that allow for maximum speed, minimum fuss IT changes.

Turning back to supply chains, when approaching all this digital transformation, B&M stores mustn’t forget the network within which they operate. In short: stores that consider the business benefits not only for themselves but for their supply chain partners will reap the most rewards. Think about it: digital transformation will no doubt be taken into account by the likes of Heathrow when considering which retailers to house in its airport – or Westfield in its shopping centre.

As such, those who underestimate any aspect of the supply chain do so at their peril. Equally, none of these cloud-focused benefits of digital transformation can be enjoyed without partnering with the right supplier to help integrate existing legacy IT systems, nor without a robust and reliable network – the engine for modernising supply chains across the globe.