Keeping fast-moving consumer goods on the move
There’s been a monumental paradigm shift in the retail and e-commerce industry. It has happened under the influence of emerging technologies and ever-changing consumer expectations. This effect has been most prominent in the fast-moving consumer goods (FMCG) sector, driven by the wholesale move to online shopping. Fast-moving goods are having to move even faster.
The net effect has been increased strain on the supply chain functions, as consumers demand quick and high-quality delivery complemented by a good online shopping experience. Retailers are striving to meet these demands that are likely to be sustained. A new type of consumer with different expectations of speed, quality of product and safety will emerge.
To meet these, some retailers have moved to an omnichannel model which connects physical stores with the online and mobile sales experiences. The success of this depends in part on a robust supply chain and logistics processes. Technology, especially using network video surveillance, can support retailers at different stages in supply chain, including product delivery.
The challenges of an omnichannel model
For this model to work and to accommodate the growing number of orders, the efficiency of the back-end processes become even more important. All warehouse processes – including picking, packing, and shipping – must be optimized.
This becomes even more relevant when dealing with FMCG. The convenience and ease of buying in-store must be replicated online. However, connecting online and offline is particularly tricky to achieve, and highly dependent on internal communications and logistics. The rising popularity of integrated options such as ‘Click and Collect’ is putting pressure on retailers to get this right, and those who succeed will immediately have a competitive advantage.
So, how do retailers achieve this, while preserving speed and efficiency? By judiciously using technology to support and smooth processes. Different types of technology will be critical to the omnichannel approach and surveillance technology can be used in store and distribution centres or warehouses to help manage queues and inventory management.
For example, we know that consumers hate to wait in long queues and ‘Click and Collect’ retailers must have an efficient system in place to keep waiting times to a minimum. The retailer can monitor the pick-up area outside the store using a camera and get an alert when a consumer arrives and when the queue forms. Intercoms can be used for two-way communication and staff sent to the consumer when needed.
This is also true for returning items to store. Catering to online shopping is not complete without comprehensive returns processing, to accommodate the constantly increasing return rates across virtually all product categories. Returns processes can be inconvenient or complicated, which can discourage or irritate consumers. Contactless methods, such as curbside or designated locker return methods are rising in popularity, and retailers must consider these options going forward. Surveillance technology can also be used here to support monitoring and communications on the store premises.
Switching gears to meet new operational demands
Satisfying the modern consumer requires increasing the speed and accuracy of order fulfilment and optimizing delivery times. This is another area where technology comes into its own. This first requires a frank assessment of processes and implementing the right solutions to offset any bottlenecks. Automation or digitalization can reduce man hours and improve operational efficiencies at warehouses.
Operations can be streamlined by making the most out of technology solutions already in place. For example, some retailers could use an existing network video surveillance system to support both security and communication.
Bemol, an electronics retailer required a security solution to monitor its premises, but also found that the cameras could be used to support workers in stocking and customer service. The store and distribution center could exchange live messages to facilitate the coordination of deliveries and other production control issues. For instance, an alert message might be sent from the distribution center to the docks where products were delivered, and collated with relevant information about other stores to support operations.
Investing in the supply chain
As mentioned, the challenge of meeting consumer demands – particularly in FMCG – relies heavily on efficiencies within the supply chain network. Each stage or node of this ‘relay race’, must be optimized, even those not owned by the retailer. This involves knowing how to work best with potential partners (such as local couriers and on-demand delivery players) to improve overall supply-chain performance.
Disruptions over the past six months have exposed inefficiencies in the supply chain and retailers are keen to address these. A recent study by Deloitte revealed that eight of ten retailers expect moderate to major supply chain investment in 2021. Order fulfilment (for example, last-mile delivery and curb-side pickup) will see the heaviest investments, followed by warehouse management and procurement.
One aspect that cannot be overlooked is the impact of Organized Retail Crime in supply chain logistics. There is opportunity for fraud at the vendor’s location, transportation companies and ports before the product even reaches the retailer’s distribution center causing huge disruptions. This can have a significant effect not only on the retailer’s bottom line, but on customer service as deliveries can be delayed or lost.
Complete visibility of the supply chain is needed. Retailers can deploy a supply-chain control tower to orchestrate actions across different functions and improve end-to-end visibility in responding quickly to emerging trends. Other key capabilities include centralized management of transport service providers and courier express parcel services to control cost. Track and trace functionality, including proof of delivery, helps to keep track of shipments during the “last mile” to the point of delivery. The result is that the retailer received information from the supplier to the point of sale to the end customer.
Technology will ultimately make fast-moving goods faster
As restrictions list, the increased demand for FMCG will continue, and , retailers will be under more pressure to ensure their entire supply chain is optimized and secure. The omnichannel model will continue to grow in popularity, to meet consumer preferences for different modes of delivery and shopping behaviours. Technology will play a significant role in supporting retailers in bringing this model to consumers, by effectively increasing the speed, accuracy and fulfilment of delivery of FMCG.
The net effect will not only be seen in-store, but throughout the entire supply chain as each stage of the product journey will become more efficient. Retailers will not only benefit from a satisfied consumer base, but be able to respond with agility to future disruptions.
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