“Online volumes for ecommerce and omni-channel retailers will almost definitely increase in all segments”
Many will be the impact of Covid-19 on retail and in its aftermath we can speculate as to what will the new normal be for retailers and consumers? Already we are seeing the need for an agile and flexible supply chain setup to cater for interruptions in the usual flows of stock management and unforeseen demands. Sourcing strategies are having to be adapted to get the balance of stock right. But what will be the right amount of stock next week or the week after? Having just enough stock vs tied down capital is a challenging task normally, and even more difficult in today’s turbulent market.
Most global ecommerce retailers probably sourced extra inventory to cater for the Chinese new year, which may mean that they haven’t ran out of normal stock yet (if they are not selling toilet paper or face masks).
Online volumes will increase
Online volumes for ecommerce and omni-channel retailers will almost definitely increase in all segments, which is a positive of course but there will be a hard hit for the bricks and mortar stores which may not survive unscathed.
However, depending on the ramp up speed of production capabilities, in China and elsewhere (India for example produces the bulk of normal medicines like paracetamol and ibuprofen), there is a risk of running out of stock of in-demand items. This will have an affect on others non-essential items (fashion will suffer) as production priorities change. This in turn will have a cascade impact on the potential volumes of all stock types in the near future, which can ultimately reduce sales and profitability. Savvy retailers have the opportunity now to realign their stock strategy, to potentially re-direct volumes allocated from stores to online.
“In order to be successful and maximize profitability in the new normal and the post-corona era returns orchestration and inbound stock visibility will be a vital part of an agile and flexible supply and demand chain setup”
Pureplay ecommerce retailers have a great potential to increase their sales, because of the market forces being felt. But they also can reap further benefits by managing returns better.
An efficient return process – more important than ever
Now more than ever, having control over the returns process and virtual stock normally tied down in a stale process, with no visibility over incoming returns stock is crucial. In order to be successful and maximize profitability in the new normal and the post-corona era, returns orchestration and inbound stock visibility will be a vital part of an agile and flexible supply and demand chain setup.
What this means in reality is understanding the importance of inbound return stock as part of your available and sellable total stock. Handling the right items at the right time, virtually as well as physically, where you are able to prioritize and re-direct sellable stock fast to the right location. Having an agile view of inbound items allows you to deprioritize the handling of non-sellable stock – such as overstock and out of season items. This change in operations could be crucial for the profitability and perhaps survival of the business.
With an intelligent rule-based returns platform you can automate your returns orchestration to optimize sales and profitability. The returns solution will then be a vital part of your agile and flexible supply and demand chain setup.
When your normal supply chain buckles or suffers the kind of challenges we are experiencing in the Covid -19 world, make sure you have the possibility of using your returns flows as replenishment in an efficient way. Virtual stock with effective and appropriate orchestration could be the difference between your business surviving or not in these turbulent and unpredictable times.