Retail sales are expected to increase this holiday season compared to 2020, with ecommerce sales predicted to grow by up to 15%, according to Deloitte. While this is positive news for retailers, numerous ongoing supply chain issues pointing to a great holiday shortage need to be dealt with before the benefits can be realized.
To minimize the impact, retailers need to leverage innovative technologies that provide the insights necessary to help navigate the disruption and reduce the risk of driving customers away not just during the holidays but into 2022.
Here are some critical ways technology can help retailers mitigate the effects of the great holiday shortage and better manage their supply chain, demand patterns and stock levels beyond it.
Digitize Everything, Including Supply Chains
Supply chains are complex systems spanning borders and industries, which makes identifying key pressure points difficult. Retailers must digitize and automate the entire supply chain to improve the speed, accuracy and flexibility of supply chain risk management.
This requires connecting all consumer-facing digital properties directly with back-office logistics, order management, warehouse, and supply chain management systems. By digitizing every element, you have increased visibility and coordination across the ecosystem, helping you manage inventory problems more effectively.
The AI Factor
You must also infuse intelligent technologies across your operations to garner further insights that can predict and anticipate issues. With everything connected, you have access to vast amounts of data. But without intelligent technologies to automatically analyze this trove, identify and predict the future, its value is extremely limited.
For example, with AI, brands can understand and anticipate demand fluctuations and trends. This enables them manage every aspect of their operations and ensure that every customer touchpoint conveys precise information.
You can’t afford to mismanage expectations. Once a customer shifts allegiance to a competitor; it’s tough to win them back. Forrester’s Holiday Planning Guide found that 70% of customers are less likely to shop with a retailer again if they fail to inform them about a delivery delay. With intelligent systems, shoppers know exactly what’s available and have accurate delivery information, eliminating the extreme frustration of gifts not arriving in time for the holidays.
In addition, inventory data and insights should be used to determine pricing and promotions to drive up sales of readily available items. Among retailers that have introduced AI technologies into supply chains, 53% reported increased revenues as a direct result, according to McKinsey.
Use Personalization to Offer Alternatives
Infusing intelligent automation into every aspect of your operations allows you to offer a more personalized, seamless experience. This enables you to understand customer shopping habits, demographics, social footprint and preferences, offering promotions of in-stock items based on their preferences. So, when supply chain issues occur, you can offer alternatives tailored to the individual.
You need to start gathering data across every possible touchpoint, such as product pages and at checkout, to create a treasure trove of information around customer preferences. These insights can then be used to deliver a personalized experience at an individual level, increasing the likelihood of a purchase. Research from McKinsey found personalized experiences increase customer loyalty and boosted revenue.
Optimize Customer Journeys
In addition to helping navigate supply chain disruptions, AI and automation are vital to gather insights and understand more about the customer journey across your digital properties. Websites and apps have millions of possible paths and hundreds of customer environments, but only a small number matter and generate revenue. With AI’s predictive insights, you can understand various customers (e.g., iPhone or Android) and the purchase paths that drive revenue, then focus on optimizing those experiences.
Intelligent technologies like deep learning and machine learning help you identify which behaviors impact conversions and propose optimizations to drive up transactions. With automation, you can further enhance and improve the performance of digital properties to optimize the omnichannel experience.
No retailer is immune from the ongoing shortages. And while mega players like Walmart and Home Depot have opted to charter ships to try and circumvent the problem, it’s not exactly a practical option for all. And with workers in short supply as well, intelligent technologies can be an effective way to navigate the ever-changing situation. By tracking real-time data analytics, retailers and brands can stay ahead of issues before customers are affected.
AI and automation provide the visibility required to not only understand and react to the current supply chain disruption, but to every potential problem and opportunity you encounter. Smart technologies are not just for tackling the great holiday shortage of 2021. Infuse them across your operations to ensure you remain a go-to destination for shoppers year round.