The continued acceleration of ecommerce has shocked retailers throughout the world and two years on, the impact of the pandemic is still proving to be a major challenge for organisations. Travis Erridge, Co-Founder and Chief Executive Officer at TMX says retailers need to recognise that business transformation is no longer a choice, but an absolute necessity when it comes to supply chain.
Despite being two years since the start of the pandemic, the impact of COVID-19 on supply chain operations is still being felt by retailers around the globe.
We’re continuing to see inventory availability issues, shipping disruption, poor digitisation and over-stretched infrastructure – all while online demand is booming.
Just like we saw with the GFC, the aftermath of Covid-19 will create a swell of innovation as companies adopt to a fast-changing landscape and as a result, every single supply chain in Australia, New Zealand and the entire region will need to adapt, alter and transform in order to survive.
The rise and rise of ecommerce
Earlier this month, Australia Post released its annual online spending report and revealed that Australians spent a record $62.3 billion online last year, with more than 80% of Australians shopping online.
This has propelled the online retail market share to reach a dramatic 19.3%. However, according to Australia Post CEO Paul Graham this isn’t the end and he predicts e-commerce growth is set to double in the next five years.
This is in line with our predictions at TMX, and as a result we’re about to head into the biggest period of change and transformation this industry has ever seen.
Everything must change: short, medium and long-term
When it comes to ecommerce fulfilment, the age-old adage of supply chain operations rings true – getting the right product, in the right quantity, in the right condition, at the right place, at the right time, to the right customer and importantly, at the right price.
This has been a constant challenge for retailers and supply chain operations over the past two years, and this pursuit is set to dominate business transformation and strategy moving forward.
Not only has the way we shop changed, but the consumers themselves have changed. Access to real-time information, continuous updates and accurate delivery predictions are crucial when it comes to online shopper satisfaction.
While speed to market has been a major priority for many retailers, post-pandemic we’re learning that customer experience is what is driving success in the online marketplace and accuracy, traceability and reliability are now more valuable to the consumer than speed.
But a good customer experience needs an integrated and digitally advanced supply chain. You could put all your efforts and investment into improving your UX and online customer experience, but if you fail at the last mile, this will be what your customer remembers when they think of your brand.
A good customer experience also needs the supply chain to be truly aligned with the business strategy and therefore requires a continuous loop of feedback between your business strategy, retail strategy and supply chain strategy.
But without digitisation, your legacy systems will not talk to each other and you will fail to provide your customers with the information and customer experience they now expect.
Retailers must now acknowledge that, while we can view the pandemic as a Black Swan event, business strategy has forever changed Those who get the customer experience right, with a crucial part of this being the supply chain and inventory operation, will be the ones who come out of this period on top.
A call to action: can your business afford to lose market share?
We believe that every retailer will need to alter how they do business this year.
While some had already started to make changes to their operations, largely based on predictions that have now proved to be underestimated and inaccurate, many are now finding themselves back at the drawing board.
With a decade of change compressed into two years, retailers cannot afford to be in denial as to the immense challenge that lies ahead. Opting for band-aid fixes, rather than investing in true transformative change will result in a significant loss of market share and profitability.
Our advice to retailers is that failing to act is no longer an option. Change is required at all levels of the business, whether it be small, medium or large – transformation is the only pathway out of this and the key to winning the post-pandemic online retail race.