Alongside the pandemic, 2022 continues to be marred by a significant and ongoing supply chain crisis. Disruption to shipping, increasing freight prices, and shortages of everything from semiconductors to HGV drivers has led to empty shelves for consumers and rising costs for retailers. For the last two years, with shattered supply chains and with key products stuck in transit, many retailers have struggled to ensure customers get their order delivered.
In the last quarter of 2021, the UAE retail economy showed positive signs of recovery as consumer confidence and spending continued to build momentum. E-commerce sales had also continued to gain momentum across the UAE, indicative of a step-change in consumer habits brought about by Covid-19.
Data also revealed that the overall value of e-commerce sales in Q3 2021 was 34 percent higher than the same period in 2020, with consumers spending a quarter more on e-commerce in the year to September compared to the same period in 2020.
To cope not only with the supply chain challenges but also with other pandemic-induced issues of the past year, retailers of all sizes have needed to be nimble and adaptable. In an effort to innovate and offer shoppers the best possible service while driving further efficiency gains, many merchants have invested in alternative digital solutions to respond at speed to changing market conditions.
While reshaping business models and pivoting to digital-first strategies has required a lot of energy and a significant monetary investment at a time when both were in short supply, the good news is that these efforts were not wasted. Retailers now have the option to capitalise on this customer data and further refine it to draw out insights needed to future-proof their strategies and emerge stronger and more agile.
Demystifying data through analytics
Retailers capture all types of data – from inventory and pricing information, to customer, transactional, and operational data. These same retailers, however, often struggle to make practical use of this resource to drive decisions, support strategies to beat market adversity and identify opportunities to meet the ever-changing preferences of customers.
The key here is data science, which can be used to transform raw information from point-of-sale data or from digital shopping baskets into dynamic customer consumption behaviour insights to drive decision-making.
By applying data science and analytics to this information, all retailers can generate data-driven insights which can help better understand product line performance, create personalised promotions to boost sales, or even create a more engaging and rewarding customer experience across their entire buying journey.
Ensuring that goods are delivered on time, every time, is now more important than ever considering recent disruption. In meeting this goal, embedding analytics into processes and operations – all the way along the supply chain – is vital to helping ensure products flow from the manufacturer, to logistics partner, to customer, without delay.
These analytics can help predict whether a shipment will arrive at its destination on time, as well as provide recommendations and alternatives to improve delivery performance on both a micro and macro level.
Recent years have underlined just how fragile global supply chains can be, and retailers now need to remain vigilant ahead of the next crisis. Supply chain professionals are set to invest more in technology, prioritising advanced analytics and artificial intelligence in the coming years to address this need, but more can be done on the side of the retailer, too.
By using software designed specifically to manipulate data to optimise their inventory or model and analyse their supply chain, retailers can access several advantages. For example, using previous forecasts to help train predictive models that can optimise inventory and shorten lead times to increase efficiency throughout their supply chain.
Building this supply chain visibility can help retailers to plan contingencies, such as finding alternative suppliers if something happens to their regular source. The core theme here is identifying and implementing strategies to drive resilience – to assess demand in advance and improve their ability to supply.
By combining internal data with external sources such as real-time weather forecasts and shipping information, retailers can dynamically forecast demand to anticipate product shortages and buying trends.
These insights can inform decisions such as deferring a planned mark down of winter stock days before a major cold front or setting contingencies for – and quickly reacting to – a potential supply chain disruption such as a shipping container blocking a major global supply artery.
Dealing with data
Instead of hiring expensive data scientists or analysts, retailers can now provide their existing employees with smart self-service technologies to help them interpret this data correctly, and even automate these processes to drive that efficiency further.
Applying human intelligence to automated analytics is still necessary to produce valuable knowledge, and, with retailers already motivated to improve the customer experience wherever possible, easy to use analytical software represents another string to their bow.
People remain key to data-driven digital transformation and upskilling the workforce in data literacy and analytics is a critical part of any successful transformation strategy. The challenge for retailers is to empower their back-office employees with the right data tools.
Only when a retail employee can access the available data, analyse it, and then suggest or implement an improvement based on the results can the company optimise its processes and assert itself against the competition. In contrast, businesses that aren’t democratising access to their data, or upskilling their people to perform transformative analysis, will struggle to anticipate changing customer needs, strengthen supplier networks, and remain on top of logistics to respond quickly in a crisis.
Retailers hoping to emerge from the current crisis in a stronger position need to harness and leverage the power of their data into their decision making – assessing and identifying alternative suppliers, back-up strategies, and demand peaks to succeed.
Many businesses may not realise it, but they are sitting on a goldmine of data. Once this data is accessed, analysed, and democratised, it will be the key to continually meeting the core agreement between consumer and seller – the reliable availability of product – even as supply chains continue to fracture.
Karl Crowther, Regional Director – MEA at Alteryx.
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