Retailers need synchronized supply chain solutions for better demand forecasting and inventory visibility, new data from Blue Yonder and Retail Systems Research shows
Report argues for data-driven, AI-powered supply chain solutions
SCOTTSDALE, Arizona, December 21, 2021– (COMMERCIAL THREAD) –Blue over there, the leading provider of digital supply chains and omni-commerce fulfillment platforms, and Retail Systems Research (RSR), the leader in retail technology research, released a new benchmark report: “Retail Supply Chain: Navigating Choppy Waters with Improved Agility. “
The report found that retailers are slow to make headway in resolving issues associated with forecasting demand and visibility of available-for-sale inventory. The survey also presented a strong case for prioritizing AI-centric supply chain solutions in the new year. You can download and read the full benchmark report here.
“Supply chain disruptions are a priority as the holiday season approaches, but the weeks following this season can prove to be even more difficult for retailers,” said Edward Wong, SVP Global Retail Sector Leader at Blue Yonder. “Retailers have so far benefited from strong consumer spending, but inflation and supply chain delays threaten to slow demand and weaken pricing power, potentially leaving retailers with a mountain of stocks unsold on January 1. The good news is that retailers can use AI. supply chain solutions to address these challenges. “
The state of the supply chain
Even at the onset of the pandemic in early 2020, retailers were not confident in their ability to see real-time supply chain conditions or model contingency plans to respond more effectively to disruptions. . A year later, the confidence they had has only crumbled, according to the report:
41% of retailers say they can monitor capacity and add more when market conditions demand, up from 56% in 2020
40% of retailers can currently understand the impact of bottlenecks and prioritize those that need to be addressed, up from 48% in 2020
32% can currently simulate the effect of changes on the supply chain before implementation, up from 42% in 2020
The supply chain is also now subject to new demands, including a greater focus on sustainability. Research shows 93% of retailers agree or strongly agree that they need to find more sustainable practices and products to meet changing consumer tastes, with 51% saying they strongly believe agree with this statement.
While retailers are solving the issues that hamper greater supply chain agility, they still have a long way to go. Fashion, General Merchandise (GM), Fast-Moving Consumer Goods (FMCG), and Fashion / Specialty / Brands retailers were asked to identify the key challenges that a more agile supply chain would help their business to be addressed.
65% of FMCG retailers identified creating more flexible sourcing strategies due to geopolitical and environmental issues as their top concern
52% of GM retailers said rapidly changing consumer demands that undermine the ability to buy high and low prices was their main concern.
67% of fashion / specialty / brand retailers cited the need to be able to monitor and adjust the supply chain in real time as their main challenge
Opportunities for growth and innovation
Retailers recognize the need for a more agile supply chain and see the solution in data and artificial intelligence (AI). And when asked to rank the top three opportunities associated with an AI-powered supply chain:
60% of FMCG retailers declared predictive models to anticipate supply chain disruptions at the individual SKU level and recommend cost-optimized corrective actions
41% of GM retailers said they have real-time and accurate visibility throughout the supply chain to better control timing and costs
38% of fashion / specialty / brand retailers said they have the ability to take advantage of external influences such as macroeconomic factors, weather, consumer sentiment, demographic trends in medium and long term forecasts to guide supply chain decisions
The report found that retailers not only think about these opportunities, but budget for them as well. According to the report, 60% of retailers are budgeting or planning projects focused on current demand versus forecasting analysis and rebalancing.
“The pandemic has been difficult for everyone, and it has only accelerated the changes needed in the supply chain to respond to the radically new and different ways that consumers shop,” said Brian Kilcourse, Managing Partner, RSR Research. “While the outperformers (‘Retail Winners’) and their competitors are also eager to weather the disruption, the Winners have not given up on their relentless search for new efficiencies. In fact, achieving “operational excellence” is a core strategy for Retail Winners and the recent disruptions on the customer and supplier side of the operating model have not changed anything at all. “
Blue Yonder can help retailers make this change and is attending NRF 2022: Retail’s Big Show in New York from January 16-18, 2022, with the goal of helping retailers make “smarter customer connections.” If you would like to schedule a meeting to discuss this research or learn more about Blue Yonder’s leading digital supply chain and omni-commerce order fulfillment solutions, click here.
RSR conducted an online survey during the summer and fall of 2021 and received responses from 90 qualified respondents. The report details changes in retail supply chain processes and supporting technologies. RSR uses its own model, called The BOOT Methodology ©, to analyze issues in the retail industry. In RSR investigations, the research group continues to find differences in the thought processes, actions and decisions cited above. BOOT helps RSR better understand the behavioral and technological differences that lead to lasting improvements in sales and successful execution of the brand vision. To learn more about RSR, visit www.rsrresearch.com.
About Blue Over There
Blue Yonder is the global leader in digital supply chain and omnichannel commerce execution. Our intelligent end-to-end platform enables retailers, manufacturers and logistics providers to seamlessly predict, pivot and respond to customer demand. With Blue Yonder, you can make more automated, profitable business decisions that drive greater growth and redesigned customer experiences. Blue over there – Realize your potential™ blueyonder.com
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