Three Supply Chain Lessons from Momentum 2016

The recent Momentum 2016 conference held by Manhattan Associates in Orlando, Florida, was a great opportunity to catch up on the latest developments in supply chain solutions and strategies.



Here are three especially important retail supply chain trends uncovered and explained at the event:



Supply chain is key to omnichannel

Discussions about omnichannel retailing often focus on front-end customer engagement or personalized promotions and assortments. While marketing and merchandising are vital components of the omnichannel customer experience, they do not represent its foundation.



“Supply chain is at the heart of retail,” Rachel Mushahwar, head of global retail, hospitality and CPG enabling team for Internet of Things, Intel Corp., told attendees. “Merchants think they’re king, but they’re not.”



The point of this commentary was not to denigrate the important work of merchants, but to illustrate a larger fact. Modern consumers expect to connect with retailers at any time, via any channel, and have immediate access to the products they want to buy. Offering them tailored discounts and shopping carts that cross channels does little good if the merchandise is not immediately available.



Without a highly responsive back-end supply chain in place, the front end of seamless retailing collapses. Supply chain remains the foundation of retail, whether the shopper visits a store or taps their smartwatch.



Consumers are key to supply chain

Continuing the logic of the previous Momentum 2016 lesson, if omnichannel is built around the supply chain, then the supply chain is built around the consumer. No longer do retailers design supply chains with the idea goods will wind up on a store shelf. Now retailers design supply chains with the idea goods will be delivered directly to the hands of the consumer.



“Bed, Bath & Beyond has more than 1,000 stores, Alex Zelikovsky, VP of omnichannel solutions and supply chain technology, stated. “That means we have 1,000 warehouses and 1,000 returns centers.”



Throughout the conference, speakers from various retail chains explained how they are now using their stores as omnichannel fulfillment centers to get items to shoppers as quickly as possible. And it’s not just stores – Target geographically stocks warehouses to make sure they have adequate counts of regionally popular items.



However retailers respond, the new reality is the consumer is in charge of the supply chain. Items are pulled, not pushed, and must be pulled quickly and efficiently across all channels.



Visibility is key to consumers

It is also worth mentioning that in addition to getting customers the items they want ASAP, retailers need to be able to show them where those items are. According to Forrester data shared at the conference, 75% of consumers are more likely to visit a store if inventory is visible online.



Furthermore, 26% of consumers, and 33% of millennial consumers, are less likely to visit a store if inventory is not visible online.



Thus retailers need to invest in technologies that support real-time inventory awareness and transparency, for consumers as well as internal employees. Telling a customer a desired item can be ordered online and picked up at a store is not enough. The shopper wants visible proof of availability before leaving their home.