When Omnichannel Retail Accelerated

by | Dec 3, 2021 | Automation, Omnichannel, Supply Chain

For years, consumers have been buying in-store, online, and via social media, apps, and marketplaces like Amazon. Some retailers had these operations working as one smooth machine, but most worked behind the scenes to deliver a front-facing omnichannel experience with a disconnected backroom.

The last two years have put omnichannel improvements into hyperdrive. The retail industry needed to roll out its plans for the next decade almost overnight. We are still dealing with many aftershocks of this period, including the disrupted global supply chain. But let’s not forget how far we’ve come.

Recently I met Adam West from iHeartMedia for their CEOs You Should Know podcast. We discussed the challenges that retail businesses have faced and how SPS has helped them along the journey. Here are just a few excerpts:

New suppliers to stock sites and shelves

SPS teamed with thousands of retailers and suppliers as their businesses changed dramatically overnight. First, they needed to address product shortages, including many essentials. Retailers found new suppliers with available inventory or current suppliers that had retooled to offer different products. Then, SPS onboarded them in one to two hours. This fast turnaround meant that retailers could place orders and products could ship almost immediately. Suddenly consumers were starting to see the essentials they needed in-store or online. It wasn’t perfect, but this pivot was remarkable. It gave most households what they most needed.

Without SPS to onboard new suppliers, a retailer’s buying and operations processes would have been chaotic. Retailers had to focus on finding suppliers, enhancing their curbside pickup and shifting assortments to suit the buying needs. SPS did all the heavy lifting to get new suppliers set up and integrated into the retailer’s supply chain processes. TeamSPS took the pressure off the retailer, avoided retraining staff, and minimized missed shipments and delays.

I think Adam said it best, “SPS likely touched every consumer during this time.”

Speed was critical

Out of stocks created a much greater toll than disappointed customers or a financial hit. Essentials were needed immediately. The industry norm of 4–7 weeks for supplier onboarding was unacceptable. Consumers couldn’t wait for days. Luckily SPS could deliver in just a few hours.

We had many calls from stressed-out retailers and suppliers during this time, looking to move much-needed products to market. For example, we saw grocers running low on fresh produce and looking for another supplier. When they found available inventory, they needed to add new suppliers to their EDI system and place their orders. There was a lot of strain on distribution centers and their workers. Getting new suppliers into the same order process system as existing suppliers was key. Enough changes were happening already.

Drop-ship orders spiked

E-commerce was moving very quickly but still only accounted for 11 percent of total sales in North America before the pandemic, according to the United Nations. Then stores closed and the world went online to shop.

We saw the number of purchase orders in our retail network increase drastically. Drop shipping went from a side business for many retailers to their primary delivery method. They started placing orders for single items, not pallets or truckloads for a store, and suppliers quickly became adept at shipping these small parcel orders.

As you can imagine, as that happened, it was easy to see that the process needed to be even tighter and more efficient. It was time to embrace automation.

Automation was the answer

Every retailer and supplier had standard operating procedures in place. But when the pandemic hit, every step was more difficult as major parties in the supply chain had labor shortages, shipping delays and plant closures. Every supply chain felt the strain, with no end in sight.

The solution was automation. Suddenly, things like barcoded labels, advance notice of inbound shipments and electronic order confirmations became urgent projects. Companies that didn’t use barcode labels in receiving now found them a necessity. Suppliers that could always be counted on to deliver complete orders were struggling with inventory. No one knew what was being delivered (and when).

Add to this chaos the need to socially space your labor, making warehouses and distribution centers feel smaller. Retailers were facing incredible pressure.

SPS helped thousands of suppliers and retailers overcome these challenges with automation. Communications with trading partners improved, receiving became less chaotic and drop-ship orders were trackable and delivered.

We are still feeling the effects of these times, and the upcoming holiday season will strain the supply chain again. But the retail industry moved mountains to serve the consumer and they should be proud of how many changes they deployed in just a few weeks.

I’d like to thank our retail businesses for seeing us through and share my deepest gratitude to the employees of SPS Commerce who went the extra mile to live our value of “Obsessed with Customers.”

Archie Black
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