Retailers with exceptionally high sales growth are more likely to take steps to address supply chain issues that are rising in the wake of the pandemic and social strife.
According to “Managing Through Disruptive Times with Data Driven Speed and Adaptability,” a new survey of 160 qualified global retailers (predominantly U.S.-based) from RSR Research and Relex, 76% of retail “winner” respondents with comparable store/channel sales growth above the industry average of 4.5% say strategic placement of inventory throughout the supply chain to better fulfill customer needs provides a “big opportunity” to address supply chain issues in the next 12-18 months. Only 29% of other respondents cited this strategy.
Similarly, 63% of winners and 49% of other respondents said better understanding (and reacting to) unplanned events that drive a dramatic change in customer behavior are a big opportunity to address near-term supply chain challenges. Sixty-one percent of winners and 40% of other respondents said better understanding the dramatic changes in customer preference and “path to purchase” are a big opportunity, while 61% of winners and 44% of others mentioned optimized omnichannel order fulfillment to improve profitability.
While these supply chain remedies are all forward-looking, they all also relate to challenges that became prevalent during the COVID-19 pandemic, such as shipping delays, social unrest events, sudden demand spikes for certain products, and consumer migration to omnichannel shopping. To an extent, the results tie back to a previous RSR Research survey, which revealed that winners were more likely to report having a “lot of impact” from a number of disruptions during 2020.
The latest survey also indicates that winners (77%) are much more likely than other respondents (51%) to say being able to produce highly accurate and granular forecasts (e.g., store/channel/SKU/day level) offers “high value” in demand forecasting. Differences between the two cohorts of respondent are narrower in giving high value ratings to demand forecast aspects such as the ability to leverage new data sources such as social media or regional mobility data (61% winners, 60% others), being able to react quickly and automatically to changes in local demand (61% winners, 64% others), and ability to accurately capture the demand impact of promotions and price changes (55% winners, 53% others).
However, winners were also much more likely to assign high value to aspects of demand forecasts such as leveraging the same forecast throughout operations (59% winners, 47% others), the ability to forecast returns (58% winners, 29% others), using the same forecast for end-to-end supply chain management (57% winners, 42% others), and the ability to capture the impact of external factors such as weather or local events (54% winners, 36% others).