The Retail Supply Chain Digital Readiness report gauges the digital supply chain readiness
Most global retailers are only at an early stage of digital supply chain adoption, according to a new report from Blue Yonder and WMG, University of Warwick. The Retail Supply Chain Digital Readiness report benchmarked the digital supply chain readiness of 104 global retailers, revealing that only 15% currently have prescriptive or autonomous supply chains (Level 3 and Level 4 on a scale of 1-4). However, the report also reveals that retailers harbour digital transformation ambitions, with more than half (61%) of retailers saying they want to achieve a prescriptive or autonomous supply chain by 2025.
The report shows retailers are not able to react to changes in demand in real-time, with only 8% refreshing demand planning processes on a real-time basis. More than one fifth (22%) of retailers currently use spreadsheets for this process, but almost three quarters (74%) want to switch to prescriptive or autonomous technology in the next five years.
At present, more than half (61%) of retailers manage omni-channel inventory as separate channels. However, three quarters (75%) wish to achieve full omni-channel capability in the next five years, with 41% aiming to use AI to evaluate optimum inventory locations for each customer transaction. One quarter (25%) currently still use spreadsheets to manage replenishment analytics, but retailers know they need a more intelligent approach, with nearly half (46%) planning a fully autonomous approach in five years’ time.
The report reveals that when it comes to pricing, the majority of retailers work from a static promotional calendar, with only 13% continually optimizing prices dynamically. At present, just 11% of retailers assess multiple factors, such as inventory, margin, and waste, for promotions, but nearly half (46%) expect to be doing this in five years’ time. Currently, just a small number use AI (11%) for markdown and promotion; however, in five years’ time, they say this will have increased to 43%.
Retailers know they need to include key metrics such as stock and margin for financial planning and strategy: only 11% currently do this, but 40% want to be doing so by 2025. Retailers also want to move financial planning and strategy away from a static to real-time approach. Today, only 7% have this capability, but 36% have set themselves this ambitious objective for the next five years.