From real-time tracking to automation: Future of retail operations

Offering a compelling omnichannel experience used to be the bleeding edge of retail, but now it is a requirement for survival. While retailers have witnessed and led end-to-end disruption in order to deliver on their core promises to their customers, every element of the back-end processes have had to be reimagined to facilitate effectiveness, efficiency, and profitability. Today, it is not just the question of ‘what is sold’ but it is also about ‘how it is sold’ that determines the success or failure of a business.

Now, that ‘how’ can be quite complex, but there are technologies in place today that could smoothen these processes. The key, however, is to not work for those technologies, but to make those technologies work for you. And to do that, retailers need to figure out how to set up processes to become more consumer-centric and agile; the steering mechanism to navigate through uncertainty and changing tides; and connecting and integrating all processes to offer unified products, services, and solutions across all its channels.

Real-time tracking

Over the last few years, retailers have been using RFID for a varied range of operations including inventory tracking, in-store scanning, asset tracking and so on. It was a game-changer nearly a decade back, and then came the era of hands-free RFID, which enabled Real-Time Location Tracking of assets or resources for scheduling and maintenance purposes, tracking customer journeys, and even employee efficiency. In an omnichannel world, real-time tracking of data can be extremely crucial. A key component of a good omnichannel strategy s real-time customer engagement, which enables retailers to respond to customer actions quickly and with the appropriate context. Real-time responsiveness can improve consistency in cross-channel messaging, which consumers see as a persistent sticking point for many brands.

In fact, without real-time inventory, retailers can’t optimize inventory, yield management, and supply-chain management, and more importantly track product availability/unavailability. Relying on historical data makes inventory forecasting less accurate, increasing costs from carrying excess inventory and requiring unnecessary shipping.

According to e-commerce research by the Baymard Institute, more than 69% of online shoppers will abandon their online purchase when one or more of their items are not in stock. And the problem extends beyond one lost order because only 17% of shoppers will return to that same retailer after having a poor ordering experience.

“There are a lot of new technologies that go along with RFID that help retailers understand where their stock is, at what time, etc. It is also important to have real-time information in an omnichannel world where retailers need to know every detail about the stock they have available in the store, and the stock that is currently in transit. Customer journey and satisfaction is key. Retailers can’t receive orders and not be able to fulfil it,” said Stephane Pignard, General Manager at Altavant Consulting.

Luxury fashion marketplace, Coveti, relies on real-time data for its inventory tracking, supply chain and logistics, warehouse operations as well as communication with suppliers. “We are an API-driven platform, whereby our suppliers are able to connect with us with full access to our warehouse, e-commerce, stores, point-of-sale,” said Heba Fazari, founder of Coveti.

“We also monitor the surge in our website in real-time. We try to match the supply and demand of what the customer is looking for in our website and try to give the real-time data to our suppliers, which helps them in production and pre-production and also helps them optimize their cashflow,” she added.

This approach democratizes regional inventory based on geographic availability instead of limiting the sales opportunity to a single store location. And it enables retailers to implement and monitor key capabilities like shipping to and from a store, finding items in a particular store, reserving an item in-store for pickup, enabling customers to buy online and pick up in store, and many more.

Unifying Logistics

Now the whole idea of omnichannel is to have unified experiences, facilitated by an integrated operation and logistics network. One of the biggest issues that big retailers are facing is that the different teams – e-commerce, stores, suppliers, marketplace – are still working in silos. The stock, referencing and pricing might be different, which creates confusion for the customers and the company’s capability to improve the margin and reduce the costs.

“When you talk about omni, the first thing you do is to have your supply connected. Some of our supplies are coming from Russia, Ukraine, and Europe. And it is important to have a connected supply chain using seamless technologies as a marketplace,” she said.

The retailer of the future does not define customers by the channels they shop in, or the devices they use. The retailer of the future simply considers them as areas of the customer experience that create new opportunities for sustaining service excellence. With unified commerce merging disparate front-end and back-end systems into a single platform, technology is no longer a standalone, separate entity; it instead melds effortlessly into the retailer’s business foundation, providing an agile system for delivering insightful, efficient service at every touchpoint. That’s where Cloud comes in.

From reducing infrastructure, storage, and computing costs to enabling real-time access to operational and inventory data, cloud computing has been transforming retail operations.

Retail giant Kamal Osman Jamjoom has made a number of landmark acquisitions recently including the Lego franchise in Saudi Arabia, The Body Shop in the UAE, and Subway, its first foray into F&B.

“During 2020, we acquired the Lego franchise in Saudi Arabia and on the same day we launched the website. All the systems we put in place – from finance, procurement and operations – were hosted on the cloud. So when we acquired The Body Shop UAE, we could absorb the new business into our group quite easily and quickly. We acquired about 45 stores in the UAE and we actually brought all the systems and applications within the KOJ tech-stack within 2 weeks, which is unheard of,” said Phillip Smith, Head of Digital at Kamal Osman Jamjoom.

“The fact that we are more cloud-based now, makes these acquisitions easier. We also acquired the master franchise for Subway and we have about 140 Subway stores to accommodate in the UAE. As we bring a completely new category, we need the cloud-based tech stack to accommodate all of that easily,” he added.

Automation and robotics

One area in retail where robots have actually started playing a prominent role is in the warehouses. Depending on the scale of the retail chain, automated systems and robots capable of undertaking a varied range of tasks, have been seen making operations and logistics efficient and accurate. A growing shortage of labor, an explosion in demand from online retailers, and some intriguing technical advances have resulted in the boom of the presence of robots in the back-end.

Majid Al Futtaim had announced the deployment of autonomous robots at Carrefour’s fulfilment centre in the UAE and Saudi. It also recently announced a partnership with Yandex, one of the largest IT companies in Europe to explore autonomous technology solutions to enhance Carrefour’s last-mile delivery capabilities.

Al Nahdi Pharmacies, one of the few retailers in Saudi Arabia that promises 2-hour deliveries, have also forayed into automating its warehouses. “Our supply chain is the backbone of all the omnichannel activities. We have recently launched our automated warehouse which gives us a quick operation to deliver to our stores and customers,” said Ayman Al Saggaf, Director of Retail at Al Nahdi Medical.

In the next 5 to 10 years, robots are going to play a crucial role throughout the retail value chain from customer-facing to employee-assistance and risk-mitigation apart from warehousing services. A relatively new business model of Robots-as-a-Service (RaaS) is emerging within the retail space. A medium-sized retail store may prefer using a simple robot for basic monitoring and stock assessment on shelves. On the other hand, a big-box retailer may opt for services that offer special capabilities such as interacting with customers through speech and vision. While the physical infrastructure cost would increase linearly with expansion, the operational cost will reduce exponentially as the same software can be used for managing several hundred robots

“One of the things we have started as we embark on the digital transformation journey is RAAS – robots as a service. Everyone isn’t Amazon where they can have thousands of robots working in their warehouse, but we have started hiring robots in our warehouse so fulfilment can happen faster,” said Amit Yadav, Head of Omnichannel of modest fashion retailer, Kashkha.