The holiday shopping season is always a busy time for retail companies, and the 2022 season was no exception. With the pandemic still affecting many industries across the U.S., retailers had to adjust their supply chain management systems to meet the season’s demands.
As we look back on the lessons learned from the 2022 holiday shopping season, it’s clear that having access to reliable supply chain management software for retail is essential for success.
Supply Chain Challenges Faced by Retailers in 2022
– Workforce: Personnel shortages posed a significant challenge for retailers this past season. With fewer people available to work in stores, online orders had to be fulfilled with fewer staff members. This problem created the need for more efficient order management solutions that could help streamline the process and ensure that retailers could fulfill customer orders on time.
– Inventory: Retailers faced challenges related to inventory management. As the international backlog started to clear toward the end of the year, a considerable amount of retail merchandise was finally delivered. Unfortunately, retailers faced an overabundance of products in warehouses and stockrooms.
– Consumers: Customer demand rose in 2022 for certain segments of the retail industry, such as apparel and footwear, but not every segment flourished. Consumers had to make difficult choices about what products to purchase, especially due to concerns about inflation and the availability of specific products. So, consumers adjusted their buying habits during the holiday season, creating a moving target for retailers.
For example, many consumers bought fewer total goods and/or replaced gifts with non-tangible items such as travel and trips. Meanwhile, other consumers only bought certain products if they were deeply discounted, leaving many retailers with excess inventory they hoped to move.
Will These Challenges Continue in 2023?
It has yet to be determined the exact challenges retailers will face in 2023, particularly in spending and meeting customer demand. But, retailers need to gear up to be nimble through uncertainty after the holiday season.
One inevitable thing is that there will be ongoing pricing challenges because of the ongoing economic conditions and other global factors affecting the supply chain.
The decision to open or close warehouses and retail locations is also a big challenge for retailers to consider. Retailers must have a reliable warehouse management solution that can quickly and accurately respond to changes in customer demand and store locations.
Common Problems With Supply Chain Management Solutions
Fortunately for supply chain managers, there are very straightforward Inventory Management Systems and Transportation Management Systems (TMS) in place to help manage the data bouncing back and forth between warehouses and retailers.
However, problems persist in data integrity along with efficient supply chain planning, tracking, and execution. Internal inefficiencies, such as human errors and inefficient processes, often compound the challenge of staying ahead of customer demand. Let’s review a few categories of issues to address.
Inventory management systems should be able to accurately track and forecast inventory levels so that retailers can replenish stock promptly. Unfortunately, many inventory management systems rely on manual data entry processes, leading to errors and delays. And because of excess inventory and lack of personnel, stockouts and overstocks are still issues.
The process of transferring goods from one warehouse to another is often a time-consuming task. This problem can lead to delays in deliveries and missed customer orders, hurting customer loyalty and severely damaging a retailer’s bottom line. Although robust systems are in place, communication between warehouses could be more efficient.
A lack of adequate tracking practices for monitoring inbound merchandise makes it challenging to plan personnel and space. As a result, retailers may need help making efficient decisions regarding sales, clearances, and overall pricing determination for customers.
This challenge ultimately affects profitability and customer satisfaction. Without the ability to track inbound merchandise, retailers may be forced to make decisions about pricing and promotions without the data to back them up. The result can be an inefficient use of resources and an inability to capitalize on seasonal trends.
3. Order Fulfillment & Shipping
Order fulfillment is another area that has seen major improvements in recent years. But many retailers still experience problems with shipping execution decisions due to process disruptions. Carrier pricing has increased, and rate shopping between carriers isn’t occurring as it should for many retailers.
Sourcing products for shipping is also inefficient. For example, when a product is being shipped from a warehouse in another state when there might be dozens of them in stock at one of the local retail locations, the retailer is paying more shipping costs than necessary.
Supplier management systems can help with order fulfillment by providing a more efficient way to manage supplier relationships and make accurate decisions about selecting the appropriate supplier for each order.
How Retailers Can Succeed in 2023
To successfully manage the 2023 holiday season, retailers need a reliable supply chain management solution that can address the challenges above and more. A robust system should be able to:
- Accurately track inventory levels and forecast future demands for proactive demand planning.
- Monitor inbound merchandise to facilitate better decision-making.
- Manage carrier pricing and rate shop for the best deal.
- Source products for shipping from the most cost-effective location.
- Offer a centralized source of truth.
CloudLogix is a leading provider of supply chain management software for retail. Our cloud-based CloudLogix platform help retailers optimize their supply chain operations and improve efficiency.
By using our centralized software platform, retailers can do more better:
- Manage inventory.
- Track shipments.
- Monitor customer orders.
- Analyze performance data.
Our solution is easy to use and can be customized to suit the needs of your company. Our integrations allow you to use our software platform to gain insights into customer behavior and identify opportunities for improvement. CloudLogix can integrate into other systems, such as ERP platforms, for greater efficiency in communication processes and data analytics.
In addition to these features, CloudLogix can help you compile your data from 2022 and pinpoint business rules or alerts that should be implemented to handle specific challenges for 2023 proactively. By having a clear overall picture of your entire operation, you can be well-prepared to handle anything 2023 happens to bring.
CloudLogix: Our Supply Chain Management Software for Retail
Ultimately, centralizing multiple sources of data and implementing specific business rules for retailers helps to maximize efficiency and profitability. CloudLogix can do this in a way that is both quick and cost-efficient.
If you’re looking for supply chain management software for retail purposes, contact CloudLogix today to schedule a demo of our platform. We can help you craft the best possible strategy for your business and ensure success during the 2023 holiday rush.