15 April 2014 | Sarah Windham-Luck
There’s no doubt this is an era of squeezed margins where, for retailers especially, a key priority is ensuring profit is protected as much as possible in each area of activity. But it can be difficult for retailers to implement a fully visible process for managing the flow of stock, underlining the importance of close collaboration with supply chain partners.
Visibility is paramount, not only because returns have become a normal and regular aspect of modern consumer behaviour, but because the longer items are out of the supply chain, the less profitable they become. Dealing with a varied store estate and a disparate supply network means it can be difficult for many retailers to retain control over returns. The faster returns can be processed, the more likely they are to still generate maximum profit.
The role of supply chain partners is to encourage and implement the flow of information (and products, naturally!) throughout their own supply network, and the one they’ve established with their retail customers. But making this work is about more than just paying it lip service. To properly support the sector, suppliers must hold regular operational meetings with their retail partners to anticipate issues early and address them quickly and efficiently. To ensure proposed solutions are relevant and fully embedded, suppliers need to have a strong stakeholder network within the retailer and be fully integrated in their culture and processes.
By working in close collaboration, suppliers can help to ensure that items which have been returned are processed and back in the supply chain in enough time for them to be sold at the maximum RRP.
Furthermore, as omnichannel becomes ‘total retail’, this requirement is only going to become greater. The lines between channels are becoming increasingly blurred as mobile commerce, in-store consumer specific marketing, online purchases and click and collect merge into one ‘total retail’ experience.
Suppliers must actively help retailers in meeting the “right now, any time” culture head on to better guarantee availability. But if retailers do not capitalise on this, ensuring they have full visibility of stock on immediate standby, competitors can quickly steal a march. Suppliers worth their salt must, therefore, recognise the role they can play in managing stock flow into stores efficiently.
☛ Sarah Windham-Luck is director of retail UK & Ireland at Office Depot