The digital capabilities of the most resilient retailers
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The COVID-19 pandemic has dramatically impacted the retail sector, accelerating the need for digital capabilities among retailers. To thrive post-pandemic, retailers must embrace key imperatives such as enhancing customer experience, developing cognitive supply chains, and reimagining store operations. Future-focused retailers will innovate through technology to create seamless customer journeys and improve operational efficiency.
The digital capabilities of the most resilient retailers
- 1. The digital capabilities of the most resilient retailers Shankar Narayanan President and Global Head, Retail and Consumer Packaged Goods, Tata Consultancy Services Author
- 2. 2 The impact of COVID-19 on retailers The retail landscape has been drastically altered by the pandemic. Retailers need to cultivate digital capabilities to survive the new market conditions. Global retail sales are projected to plummet by 6% in 2020 from 2019. 29 retailers filed for bankruptcy in the US through the third quarter of 2020 With many physical stores closed, ecommerce saw a massive rise. 40% of global consumers reportedly increased their ecommerce purchases Only the most agile, nimble and technologically adept retailers will be able to thrive in the hostile environment accelerated by the pandemic. Some retailers were able to move quickly and adjust to the disruption with digital channels. However, these businesses were also affected by filled-up warehouses and factory closures
- 3. 3 Outlining the digital retail imperatives Six key digital imperatives that retailers need to embrace in order to counter the disruption. Retailers will need to develop capabilities across all the six areas to thrive once the pandemic recedes. An end-to-end customer experience (CX) AI and analytics to improve the CX continuously and guide the customer’s journey Cloud-based core enterprise systems Highly automated core business processes supporting employees and managers Real-time supply chain visibility Key partnerships in digital ecosystems
- 4. 4 The key areas of digital investment Three key investment areas for future-facing retail enterprises to unlock business value. Creating a unified digital CX Developing cognitive supply chains Establishing the store of the future
- 5. 5 Creating a unified digital CX Retailers must integrate multiple channels to provide online shoppers with a seamless shopping experience. The three main pillars of creating a unified digital CX are: Mapping customer journeys: Retailers need to create personalized blueprints for every customer to deliver hyper-relevant experiences Integrated platform: Retailers must leverage an integrated ecommerce platform based on cloud architecture using micro services and APIs Connecting experiences: Retailers need to adopt new ways to engage customers online and in-store
- 6. 6 Establishing a cognitive supply chain Retailers need to cultivate an intelligent supply chain that allows them to make countering moves involving: Source diversification: A dynamic web of long- and short-term suppliers that share data and access to multiple channels across platforms Working with suppliers: Collaborate with suppliers help to better align supplies during shortages and demand surges Last-mile optimization: AI can be harnessed to streamline logistics by assessing logistics data. This helps retailers optimize last-mile delivery Accelerate fulfillment: Forge tie-ups with delivery platforms to accelerate last-mile delivery reduce overall delivery timeline Network fluidity: Leverage algorithmic network models to gain flexibility, react quickly to disruptions, and maintain a top and bottom line Cognitive workforce: Machines, robots, and algorithms need to replace the ever-shrinking workforce. With visibility and control, these can generate high business value
- 7. 7 Reimagining the concept of a store In a post COVID-19 world, the in-store experience is vastly altered. Some of the ways to improve operations in a physical store include: Multiple roles: Brick and mortar can be used as local inventory points to improve fulfillment capacity without making large investments Redefine store operations: AI-powered solutions can be used optimize energy consumption to optimize labor hours by forecasting sales and customer distribution Intelligent merchandising: AI can be further leveraged to make granular decisions on stocking, pricing, sales forecasting, and re-evaluating demand patterns Improved productivity: Retailers must optimize labor and operational costs by utilizing data-driven forecasting models for manual tasks. This will improve productivity on a whole Perpetual ecosystem: Devices, applications, and the technology infrastructure must be monitored round the clock. This can be achieved with autonomous IT operations
- 8. 8 The retailers of tomorrow Retailers must adopt technology to deliver safe and connected retail experiences for their customers. • Replace legacy processes • Plug talent gaps • Create a culture of collaboration • Adopt an algorithmic and digital-first approach Innovative retailers will help elevate the landscape of retail to the next level where operational efficiencies are achieved, cost structure is reset, and business as a whole is more agile and resilient. To maintain profit margins while delivering an evolved retail experience, retailers need to: Ruling the retail landscape will require integrating channels and adding value to customer experiences
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