The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Supply Chain Strategy 2018 - In Service Of The Customer

Research Overview:

Our hypothesis is that speed to customer/same day fulfillment/speed is retailers' #1 priority, followed by cost. Retailers are looking at forward-positioned fulfillment centers to facilitate same-day delivery as needed.

All options are still on the table: Same-day shipment, Same-day delivery, In-store inventory pick for consumer in-store pick-up, In-store reservation of inventory for consumer in-store purchase, and certainly online visibility into in-store inventory

We believe traditional problems still persist: too many slow movers/not enough fast movers.

We also recognize that localization is still hard to do; our data tells us that retailers recognize that localization sub-optimizes the supply chain.

The goal is clearly to increase service levels without over-investing in Inventory.

• Better Forecasting based on where demand is generated; Data from past promotions, Space data (shelf & fixture) for forecasting and replenishment, Automatic feeds of competitive data (pricing and promotions), Weather data, Sentiment analysis as an early-warning to sudden changes in demand, Trade area data such as new stores and events

• Visibility at every stage: System-wide inventory visibility, Visibility into vendor dropship inventory, Inbound to DC inventory or orders, DC available inventory, Online/Direct channel available inventory, Inbound to store inventory or orders, Store inventory levels, Store on-shelf inventory levels, Inventory in returns processing

• Technology’s Impact: Distributed order management/customer order management, Real-time updates to inventory from transactional systems, Store perpetual inventory management, Store picking & shipping of customer orders, Sourcing algorithms for locating the optimal inventory for customer order fulfillment, System-based methods of capturing missed sales opportunities due to local out of stocks, Item-level RFID, Supplier drop-ship management system, Modern granular supply chain analytics, Available to promise forecasts

Read the answers answers to these and other questions about how retailers are optimizing their newly disparate supply chains with information and technology.

Location Analytics In Retail

This is RSR's second annual benchmark on the state of Location Analytics in Retail.

We'll focus on site selection, customer analytics and supply chain and marketing opportunities that be gained from the business intelligence inherent in today's location analytics suits.

The survey is now closed and the report will be produced in February, 2019.

Merchandising In A Post-channel World

Our 2018 Merchandising Report proved that the world has changed – and that now, more than ever, merchandising must change, too. Gone are the days of a Merchant Prince: the customer now defines what tastes will be. That customer also wants to be satisfied across any shopping “channel” she pleases. And while these realities have fundamentally changed the dynamic of retail, most retailers’ merchandising departments have yet to catch up.

As a result, we want to know examine certain aspects of what merchandising can – and should – be. What role will personalization really play – particularly online? Will collaborative planning become a real thing? How much inventory is enough – and where should it be? And what about the role of Artificial Intelligence?

The Evolution of Cloud Computing In Retail

It has taken several years, but retailers are finally and seriously embracing Cloud Computing. Much to our surprise, in our 2018 report on Retail Innovation, we found the greatest embrace of Cloud to be among the largest retailers, with the smallest retailers less bullish on it in general.

Our goal in this study is to understand the business drivers behind interest in Cloud Computing across the retail community, its perceived opportunities and internal challenges that might inhibit adoption.

We also want to understand replacement cycles: are retailers planning to replace their on premise systems with Cloud-based applications, and if so, why?And if not, why not?

RSR will survey retailers to gain an understanding of their current and future plans to move to the Cloud. Are they using the Cloud for mission-critical applications or in smaller, less critical ways.

The resulting report will examine the challenges, opportunities and technology enablers driving decision-making associated with Cloud. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance

Making The Store A Destination; Competing With Amazon

One of the main takeaways from our 2018 Store Report was the overwhelming belief of retailers – regardless of size, performance, or products sold - that stores desperately need to become fun. It’s how they plan to compete with Amazon. In fact, the way people entertain themselves has fundamentally changed in the digital age, and as a result, stores’ best chance to compete with the new ways that shopping fits into people’s lives is to become a destination for not only goods, but also experience.

How do they plan to do this? What strides have the best retailers already made? And what are the technologies – both planned and in-use – that will help makes stores more interesting?

To find out, RSR will survey retailers to gain an understanding of their current stores and plans for how those stores are changing/will change in the near future.

The resulting report will examine the challenges, opportunities, internal inhibitors, and technology enablers affecting their store-based efforts. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

Retail Innovation 2019: Learning To Love Change And Uncertainty

The days of the Retail model being steady-state and predicable are gone forever. Today, consumers adopt innovative technologies to make their daily lives - including shopping - easier and more satisfying. In the new retail environment, consumers’ digitally enabled shopping journeys are clearly driving wholesale changes in the retail operating model. But retailers have in the past exhibited an abundance of caution, and hate to fail – and that drives them towards safe bets. Safe bests don’t work anymore; the rate of change in the world of the consumer is ever increasing, and that is creating huge uncertainty within the retail industry.

RSR’s inaugural 2018 benchmark on the state of innovation in retail showed that most retailers know they have to embrace change and uncertainty, and learn how to innovate. Competitors are using innovative technologies to change the rules of the game. And technology companies are accelerating the delivery of a mindboggling array of new capabilities enabled byartificial intelligence and augmented and virtual reality technologies. Retailers need to accelerate.

Embracing the Innovation Imperative is already a wedge between overperforming retailers and others. Retail Winners are embracing new processes and technologies that will help them to innovate. Average and under-performers want they good things that innovation can bring, but haven’t yet internalized how to get there.

For 2019, we want to take a second look at how retailers are bringing innovations into their operating models, to begin to understand trends that are driving the Innovation Imperative in the industry. How are retailers organizing around innovation? What technologies are they using to develop new ideas? How do innovative applications of new technologies affect retailers’ business processes?How can retailers afford to try news ideas, and how well do they accept that some ideas will be failures?These are among the questions we hope to explore.

RSR will survey retailers to gain an understanding of their current state of innovation within their organizations and future plans.

The resulting report will examine the challenges, opportunities, internal inhibitors, and technology enablers affecting their innovation agendas. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

Practical Retail Uses For The Internet of Things

Adoption of smart devices has grown dramatically for consumers over the past several years. And we’re seeing smarter cities, smarter trains and buses and even smarter, internet-connected traffic lights. Yet in retail, generally we see a lot of priorities and very few practical, affordable applications.

Four years of survey data have taught us that retailers are eager to see the IoT transform their businesses, but they’re just not sure what to do first, or even how to make the IoT work with existing processes and technologies.

It’s time to move beyond theory and beyond pilots to practical implementations that will assist retailers in classic goals: getting closer to customers, managing their inventory better and becoming more operationally efficient.

Our plan in this survey is to understand the external and internal challenges and opportunities available to retailers. RSR believes retailers are missing some really low-hanging fruit available with IoT, and our goal will be to tease out those opportunities. We’ll end with practical and pragmatic project priorities. They might not all be sexy, but they will present the best opportunity for retailers to gain close-in, step-by-step advantage from IoT without ripping out existing systems or creating organizational chaos.

RSR will survey retailers to gain an understanding of their current and future plans to use IoT. We’ll use our typically candid voice to identify those plans that are little more than pipe dreams and those that promise rapid time to value.

The resulting report will provide very practical steps to success for each retail segment. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

The Retail Supply Chain 2019: Designing New Ways To Satisfy Demand

The retail supply chain of the past 30 years was built to reliably deliver highly standardized assortments at the lowest unit-cost-of-goods possible. But there were certain assumptions of that model which are under siege now. Those assumptions were (1) that demand was mostly generated in stores and therefore item sales were a reasonable proxy for demand, and (2) demand was mostly fulfilled in one place – again, the stores.

As we all know, those assumptions are increasingly being challenged. Demand signals can come – literally – from anywhere, from physical locations like the stores, or from “the ether” – email “opens”, eCommerce browses, social media “likes”, Google searches, and even from geo-location signals generated by consumer mobile devices. And fulfillment of demand can happen in several ways too, some much more costly than others. Even when consumers do go into a store, they no longer are content to wade through departments and aisles full of products they are not interested in; they want local assortments to reflect their tastes and priorities.They want only want what’s relevant to them, and not to be inconvenienced by a one-size-fits-all presentation.

Since 2014, RSR has been telling the industry that the Supply Chain is “the next big thing”, and would need to be re-engineered to accommodate the dramatic changes that have happened in the customer-facing side of the business. Our 2018 study showed that over-performing Retail Winners have been addressing the realignment of the supply chain to the new selling environment, focusing their attention on how to better forecast demand based on new data available, how to more effectively flow products through the supply chain to more precisely allocate assortments to maximize turns and margin, and how to optimize “last mile” fulfillment processes to maximize the profitability of each order fulfilled.

For 2019, we want to discover the extent to which the winning behaviors of over-performers (which have formed the basis of RSR’s BOOTStrap recommendations in our last few supply chain benchmark studies) are being adopted by average and under-performers.We hope to be able to learn how new technologies and processes that make for a more agile supply chain are being adopted by different retail verticals and different revenue bands.

The Real Role Of Robotics & Automation In Retail

There is no shortage of media hype over the promise that robotics and automation can bring to all kinds of business applications in the future. But what does this really mean for retail? Specifically, how do retailers perceive the improvements robotics and automation will make to their supply chains – and are they acting on these options now ? If so, in what capacity – and if not, why not?

We also want to dive heavily into retailers’ viewpoints on what these technologies mean for stores, themselves. Robotics are steadily finding their way into real-world use cases in stores right now – what does the next phase of this evolution look like?

To answer these questions, RSR will survey retailers to gain an understanding of their current perception and activity surrounding automated systems. We will also uncover their views for the future.

The resulting report will examine the challenges, opportunities, internal inhibitors, and technology enablers affecting the implementation of robotics and automation in the retail industry. As this is the first study of its kind, RSR will pay especially close attention to gross margin trends to gain insight into those practices making the most difference to retailer performance.