Retailers’ digital supply chain capabilities are underprepared for core challenges

supply chain capabilities

Board members (‘C-suite executives’) of retail companies are struggling to tackle core digital transformation challenges due to a lack of supply chain visibility and reliable data, according to a recent report. A survey has revealed that 78% of C-suite executives still feel they need a real-time view of demand and inventory across their supply chain channels. Furthermore, 50% of respondents believe they lack the right platforms/technology to support expanded fulfilment options. In addition, many retailers still do not have a single source of truth for their data nor the human capital to derive insights, and almost half do not trust their data.

The 2019 Retail C-Suite Viewpoint Survey was conducted by JDA, Microsoft and Incisiv among more than 221 global C-level executives cross multiple continents, industry segments and company sizes to understand their digital transformation priorities, challenges and plans. The accuracy and use of supply chain data is obviously essential, yet 46% of survey respondents regard their own data as being of such poor quality that they cannot trust the accuracy of it. Meanwhile, 45% admit they are unable to understand and utilize analytics tools, while 44% do not even have an analytics strategy in place.

“As consumer expectations increasingly cut across formats, the store shelf has extended from a physical object to the entire supply chain,” said JoAnn Martin, Vice President Retail Strategy at JDA. “The C-suite recognizes that expanding fulfilment options to improve customer experiences and support the ‘anywhere shelf’ is critical to survival and growth, but our survey shows their digital supply chain capabilities may be severely underprepared for this change.”

Major challenges

The digital transformation and general evolution of retail present major challenges which will require retailers to shed old habits and exchange channel-centric thinking for a more holistic view of retail in order to be successful, according to Gaurav Pant, Chief Insights Officer at Incisiv: “The latest technologies such as cloud, artificial intelligence (AI) and the Internet of Things (IoT) are the key enablers of this transformation.” This is echoed in the report, which finds that executives plan to invest in agility, intelligence and automation strategies and solutions. They view artificial intelligence (AI) and edge technologies as having the widest impact on their business by enabling real-time visibility into inventory and unlocking value from customer data. This all drives an elevated customer experience, increased operational efficiency and business agility.

Perhaps surprisingly, the survey found that supply chain and store systems are lagging in cloud adoption, despite executives believing that the cloud has more than twice the impact on business agility compared to any other technology and is a key driver of the ‘Intelligent Enterprise’. AI currently has both the highest rate of current experimentation (pilots) and expected future adoption across the C-suite, with respondents stating they plan a fivefold increase in the technology over the next two years. 50% predict that the greatest impact of AI in the retail supply chain will be on improving inventory levels.

Customer data

Greg Jones, Director of Business Strategy for Retail at Microsoft, commented: “These survey results further validate the strategic imperative behind AI and cloud as transformative technologies for retailers to gain competitive advantage by truly unlocking value from customer data. Retailers must know their shoppers better than they know themselves, and the powerful technologies coming to the forefront for digital transformation are the way to get there.”

Full survey: