New research from Advanced Supply Chain Group uncover the trends that will impact retail supply chains in 2022 in its latest eBook.
After years of supply chain delays and disruption caused by Brexit and COVID, retailers see light at the end of the tunnel. New data shows that almost half (46%) of retailers think supply chains will return to pre-2020 levels of stability this year.
Confidence is returning despite supply chain problems causing noticeable losses for many retailers during the recent seasonal peak. One-in-five retailers reported Christmas trading, including Black Friday sales, was between 21% – 30% down on forecasts, whilst a similar number saw pre-tax profits at 16% – 20% below expectations.
However, proactively addressing such losses and disruption is what’s creating renewed optimism in supply chain stability and reliability.
Caroline Ellis, commercial director at Advanced Supply Chain Group (ASCG), explains: “Tackling big problems like Brexit and COVID head-on has seen retailers overhaul legacy supply chain systems and cheap, off-the-shelf management programmes. It’s fuelled strategic investment in bespoke supply chain software that is better equipping retailers to deal with uncertainty.”
ASCG’s research found that 29% of retailers are investing in supply chain software to improve stock visibility and stock management practices. This is designed to enhance resilience and prepare supply chains to deal with some of the biggest consumer trends.
The research shows that retailers believe growing consumer demand for ‘buy now, pay later’ options like Klarna, as well as a desire for same day deliveries and increasing eco-anxiety among consumers, will have the biggest impact on supply chains in 2022. This won’t just affect the sale of products and goods being sent to shoppers – it will also see an increase in products going back in to supply chains. 57% of retailers think they’ll face a higher volume of returns in 2022.
To embrace these trends and ready their supply chains, retailers need to take three key actions:
1) Don’t make decisions without drawing on data
Sophisticated supply chain software can provide retailers with up-to-date information about stock at the touch of a button, creating access to insights that go beyond the movement of goods. Retailers can utilise sales and returns information to inform more accurate inventory forecasting and create supply chain models that allow for possible disruption and delays. Data is proving increasingly critical to protecting margins and timings and maximising bottom line returns. Retailers should ensure that all supply chains decisions are data-led.
2) Prioritise end-to-end visibility
Retailers are best-placed to work closely with all supply chain partners and suppliers to achieve full visibility of supply chain performance, from source of supply right through to sales channels. This will feed knowledge and insight that makes supply chains better, faster, and cheaper. This approach will also help retailers and their partners find ways of improving sustainability that deliver genuine environmental impact throughout the whole supply chain.
3) Evolve short-term thinking
Immediate-term fixes have often proved effective during the recent uncertainty but aren’t sustainable in the long-term. Retailers should revert to strategies and goals that look beyond solving the ‘here and now’ – it will enhance supply chain agility and resilience and prove a more effective method of regaining pre-Covid levels of control over the movement of goods.
About the research: SAPIO Research surveyed 212 retailers nationwide in January 2022. Senior professionals with responsibility for stock inventory management were asked for their opinions on trends affecting supply chain operations.