Despite many recent upheavals in supply chains due to events like the Red Sea crisis and conflicts in Ukraine and the Middle East, the logistics space is looking up.
The South African Association of Freighter Forwarders/Business Unity South Africa cargo report for August 9 suggests that annual container throughput continues to grow significantly in 2024, indicating a recovery in global demand.
Yet even with supply chain conditions improving, there are still many cases where retail store shelves lie empty despite distribution centres fully stocked with inventory. This is why it has become so essential for data systems and capabilities to be implemented since without them, stock level visibility is severely hampered.
“Empty shelf” syndrome can also occur when retailers fail to adopt business models that align with the needs of modern, digital-savvy consumers.
Where before shop owners’ sole focus was customers in a physical store, these days omnichannel, online-driven options are paramount in attracting and retaining customers.
“Since the pandemic, it’s all about customer experience and demand. You have to be able to deliver a consistent experience for customers over different channels – in-store, online, mobile and pickup points, among others,” says Petrus Gerber, supply chain solutions manager at Bidvest International Logistics.
“Customers also demand personalisation across channels. If they don’t get it at your business, they will go where they can.”
In this respect, data is “absolutely critical” as typically it will point to what a customer has ordered online before, he says.
Data and AI tools will provide automatic suggestions for customers and link the suggestions to availability of other alternatives in the distribution centre.
Data analytics that assist retailers to create a link between sales and availability through target messaging is certainly driving sales up “to a large degree”. A good example is a grocery app that offers alternative options in cases when a desired brand of food is not available.
Gerber says for retailers, it is important to set up logistics in a manner that ensures a sale never falls flat.
“It’s ultimately about speed of execution in ensuring the customer experience is met. That’s where supply chains and logistics play a key role – making sure what a customer is looking for is fulfilled.”
He adds it’s not only about data, but real-time data so that retailers can immediately react to stockout situations or a rapid reduction in inventory levels.
Gerber gives the example of store-bought proteins where there is a huge variety to choose from, including red meat, chicken, canned meat products and even sawyer-based foods.
“You can see how consumers are buying within this category range. The analytics are powerful and when used correctly, stockouts won’t happen.
“It’s about having an overall visibility of your partners, suppliers and manufacturers. In cases where you have inconsistent product information or pricing discrepancies, it can lead to frustration among customers.”
Retailers must also be careful not to place too much focus on one channel over another, as any hint that the business is neglecting an aspect important to a cross-section of its customers will negatively affect their buying experience.
“You have to make sure the experience you give customers across channels is the same. Moving with the times is the number one priority for retailers in the world we live in today.”