DALLAS, March 26, 2020 (GLOBE NEWSWIRE) -- Symphony RetailAI, the leading global provider of integrated AI-enabled marketing, merchandising and supply chain solutions for FMCG retailers and CPG manufacturers, today announced the findings of a new benchmark report, “The Retail Supply Chain: Designing New Ways to Satisfy Demand.” The sixth annual study focused on supply chain strategy, conducted by Retail Systems Research (RSR) and sponsored by Symphony RetailAI, shows that retailers are driven to change their supply chain strategies for a number of reasons, but they all revolve around the need to improve supply chain execution in a changing world.
“We have years of data that points to the fact that supply chains aren’t keeping up with the changing world of retail,” said Brian Kilcourse, Managing Partner, RSR. “It’s very hard to separate the customer experience from supply chain excellence, and retailers know this. The variability of consumer demand is the most widely reported business challenge in this year’s research, but the best performers, what we call ‘Retail Winners,’ have a very different view of the world. The importance Retail Winners place on varying aspects of inventory – levels, agility and location – as well as social and environmental issues, reveals a vastly different positioning strategy. The outbreak of COVID-19 across the globe only underlines the need for greater supply chain agility.”
Unpredictability of demand cited as a challenge for all, but leading retailers focus more on growth challenges and competitive pressures
Forty percent of all retailer respondents identified unpredictable consumer demand as their top business challenge. But isolating the results to look at these highest performing retailers versus other respondents shows that Retail Winners feel different pressures than others. Only 28% of under-performers cited “making sure our supply chain can keep up with demand” as a top challenge for supply chain execution, compared for 40% of Retail Winners. The same percentage, 40%, of Retail Winners indicated “digital channel growth outpaces store growth, putting new pressures on supply chain” as a top challenge, while cited by only 21% of non-winners.
Retail Winners have broader strategic concerns than lower performing peers
In striving to better understand demand and shopper preferences, leading retailers are also starting to make headway on organizational changes to impact consumers’ societal and environmental expectations. Additionally, dynamics of customer demand are changing how products are sourced. It’s no surprise to see that this latest research shows product quality as the driver of 85% of retailers’ supply chain strategy, behind the need for speed and even low cost. Consumers today are more demanding about which products they want and the prices they are willing to pay, but they also care a great deal about where the product was made, how it was manufactured, and what the ecological impact of that process was.
According to the research, over-performers are placing high importance on being conscious of factory workers, which indicates their desire for overall awareness and supplier collaboration in the end-to-end supply chain process. Only 31% of under-performers say that the globalization of retail has caused them to re-think supply chain strategies, compared to 55% of Retail Winners. Sixty-nine percent of over-performers ‘strongly agreed’ that the way workers are treated in contracted factories is of highest importance, compared to 54% of others.
While visibility is paramount, forecasting maturity translate to differing stock outcomes
Whether inbound, outbound, on the shelf or in the distribution center (DC), retailers recognize the need to know where their product is. Seventy-six percent of Retail Winners see “real-time visibility across the supply chain” as a focus area for improvement, compared to just 54% of average and under-performers.
Inventory management is a challenge for all retailers, but the concerns of Retail Winners versus others present interesting comparisons. Most notably, Winners fear that they have too much inventory, while poorer performers tend to believe they don’t have enough. Thirty-three percent of Retail Winners say their inventory management issues are characterized by too much inventory in DCs, compared to 21% of others, while more under-performers (36%) cite too many in-store out of stocks as a challenge, versus 29% of Retail Winners. RSR suggests that it’s likely Retail Winners have made more and better investments in forecast engines than their poorer performing peers, but the research points to inventory visibility and forecasting as opportunities for all retailers in the current landscape.
“What we find most interesting from this research is that Retail Winners are focused on new methods for achieving better visibility and better supply chain execution,” said Patrick Buellet, Chief Strategy Officer, Symphony RetailAI. “Their organization’s ability to execute in these areas will be not just a result of their strategic view of the retail landscape, but by doing entirely different things than the improvement efforts we’ll see non-winners take on this year. In the report, RSR is clear about one thing: it doesn’t believe that real-time visibility and accuracy will be possible apart from a ‘digital twin’ concept for the supply chain – essentially a digital representation of the physical supply chain enabled through AI. Symphony RetailAI looks forward to continually enabling this ability for leading retailers in 2020 through AI-driven and real-time supply chain insights.”
For this research, RSR conducted an online survey from November-December 2019 and received answers from 74 qualified retail respondents. Read the full report with RSR’s recommendations: “The Retail Supply Chain: Designing New Ways to Satisfy Demand.”
Additional resources:
- Download The Retail Supply Chain: Designing New Ways to Satisfy Demand
- Download the 2020 Supply Chain eBook for a summary of findings
- Read more about inventory management
- Contact Symphony RetailAI today to gain visibility into data that enable accurate, agile and confident supply chain decisions through master data management.
About RSR Research
Retail Systems Research ("RSR") is the only research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry and thought leadership and advice on navigating these challenges for specific companies and the industry at large. To learn more about RSR, visit http://www.rsrresearch.com.
About Symphony RetailAI
Symphony RetailAI offers the FMCG industry’s only integrated AI-enabled marketing, merchandising and high-performance supply chain solutions for retailers and CPG manufacturers designed with customer insights to fuel recommendations for profitable growth. Founded on CINDE and GOLD enterprise solutions, Symphony RetailAI’s innovations span the retail value chain from agile merchandising, promotion optimization, personalized marketing, fresh food and store management, to demand forecasting and inventory management. A strong global partner ecosystem helps us serve more than 1,200 organizations worldwide – including half of the world’s top 30 grocery retailers and all of the top 25 global CPG manufacturers – all through the Symphony Retail Cloud, driven by Microsoft Azure Cloud. Symphony RetailAI is a SymphonyAI company. For more information visit symphonyretailai.com.
Connect with Symphony RetailAI on social media:
Twitter: @SymphonyRetail
LinkedIn: https://www.linkedin.com/company/symphonyretailai/
About SymphonyAI
SymphonyAI Group is the fastest-growing private group of B2B AI companies, backed by a $1 billion commitment to deliver next-generation AI solutions for transforming the enterprise. SymphonyAI Group addresses use cases in retail, healthcare, financial services, industrial, manufacturing, defense, and media. Since its founding in 2017, SymphonyAI Group has grown rapidly to a group of six companies with a combined revenue run rate of $300 million. Over 1,700 talented leaders, data scientists, and other professionals operate the group under the leadership of one of Silicon Valley’s most successful serial entrepreneurs, Dr. Romesh Wadhwani. For more information visit symphonyai.com.
Media Contact
Adrienne Newcomb
Ketner Group Communications (for Symphony RetailAI)
adrienne@ketnergroup.com
512-794-8876