Author: George Harb
Back to school season is the second biggest shopping season of the year. It touches millions of households and accounts for multiple billions of dollars in sales. According to Deloitte’s 2018 back to school survey, the average household has planned to spend $510, with 57 per cent of back to school spend set to take place in-store. Retailers face a challenge to ensure that enough inventory is available and in-stock from August to February.
Parents are spending most of their back to school budget on consumer electronics; as more classrooms integrate tablets and laptops as a mode of learning. Whether consumers are looking to purchase new laptops, tablets or the latest smartphones, ensuring that there is adequate supply of these products for the new school year is an ongoing challenge for both manufacturers and distributors. Today’s high-tech supply chains stretch around the world. To
meet back to school deadlines, supply chains must be well orchestrated; ensuring that parts are being delivered to manufacturing plants in the upstream supply chain, while goods are being distributed to retailers in a timely manner in the downstream supply chain.
To adequately prepare for the influx of back to school shopping, retailers should look to implement predictive analytics technology and move towards an end-to-end digital supply chain.
To derive the greatest benefits from these technologies, organisations must first ensure they have a digital foundation; whereby all of their data and workflows are managed digitally. This will allow information to feed into the new technologies more effectively and provide stronger insights, ultimately leading to more informed decisions.
Having this knowledge will allow businesses to forecast what products they need and at what quantity, to ensure they arrive ahead of time.
Continuing with the electronics theme… It can be difficult to forecast the demand for new high- tech gadgets, as they tend to have a short product life cycle. As a result, obtaining meaningful forecast data from the previous year can be challenging. For example, a PC manufacturer may have traditionally known roughly how many laptop PCs they are likely to sell, but these forecasts could be disrupted by a social media frenzy around a new product launch or as more students become willing to wait for the newest product to come out, altering the known quantities. For example, the unprecedented demand for Apple products in recent years has severely impacted both Apple’s and many retailer’s global supply chains.
While historical sales data provides a baseline for retailers to plan order quantities with their suppliers, companies need deeper insights to accurately forecast which products will be in demand next season, and to prevent an out-of-stock situation with low inventory. In fact, this could involve the combination of historical information with other information, such as product trend information on social media channels.
If companies can more accurately listen to social media feeds, they are better prepared to gauge market interest and optimise their supply chain accordingly. Being able to listen to the ‘sentiment’ of students and which products they are likely to buy can provide invaluable insights that are impossible to obtain any other way.
Aggregating sentiment related to a product and using big data analytics to determine product buying trends will allow retailers to optimise their supply chains, guaranteeing the right products are at the right store at the right time.
Being able to learn and predict future buying patterns will transform the way products are sold through today’s retailers.
To remain competitive in the market, retailers must ensure they have an end-to-end digital supply chain that not only removes slow paper-based processes from their business operations, but also provides end-to-end visibility of shipments to show when a batch of next generation products will be in store.
For many, digital processes and workflows are the norm, however we see many organisations today moving very slowly to adopt these technologies and ones that still use paper-based transactions.
A digital supply chain will only work if all involved parties are fully digitised.
The onus lies with the retailer (i.e. the organisation trying to optimise efficiencies within the supply chain) to encourage partners and distributors to undergo a digital transformation process, if they want to unlock the benefits of the digital supply chain.
- George Harb is Senior Director Asia Pacific, Business Ecosystems at OpenText.