How retail technology is recovering the supply chain
The worldwide supply chain took a massive hit during the COVID-19 pandemic and has yet to recover fully. This pandemic compromised manufacturing and maritime shipping sectors, causing an unprecedented supply shortage in the 21st century. Store shelves were bare and many places could not access the essentials.
Although the situation has greatly improved in recent years, it’s still far from ideal. To this end, technology has been a boon to the wounded retail industry. New digital tools are helping the recovery effort by introducing innovative ways to buy and sell goods.
Worldwide Events and Their Impacts on the Supply Chain
The COVID-19 pandemic was among the most significant challenges the global retail industry had ever seen. In the time preceding, the worldwide supply chain was already facing issues. These include facing pressure over an increase in demand for overseas goods, together with an increase in unemployment.
The already weakening supply chain was brought to its knees when the pandemic hit. Shipping became extremely limited as governments initiated spacing and employment restrictions in an effort to prevent the virus from spreading further.
The result was the historic lack of even the most basic goods in retail stores. Shelves were famously empty as people scrambled to buy their necessities. Even now, after the worst of the pandemic has passed, it’s still common to see retailers out of stock on certain goods for an extended period.
The industry crippled the most was oceanic shipping -- one of the backbones of the world’s supply chain. After the COVID-19 pandemic, ocean freight remained volatile due to massive influxes causing companies to overstock on specific products and be short on others.
Furthermore, just as ocean freight began seeing a sense of normalcy, Russia invaded Ukraine. Among other things, the conflict has exacerbated the price of fossil fuels to record-breaking levels. Ocean freighters require diesel fuel to operate and the difficulty of obtaining it due to inflated prices makes operating supply ships even more difficult.
How Retail Technology Is Making a Difference
Although the shortage of goods has dramatically affected both small and large retailers, the development of new digital tools has allowed them to adapt. These new technologies have many applications -- from automated supply and retail services to digital branding and packaging tools. Utilizing this new technology will enable retailers to keep up with the many challenges they face in a customer-centric market.
Digital Supply Networks
One of the most tremendous advancements in digital technology is the Internet of Things (IoT). The IoT uses the internet to connect multiple devices so they can communicate with one another. This allows users to control all the connected devices simultaneously, enabling them to perform coordinated tasks they wouldn’t have been able to accomplish otherwise.
IoT technology has many applications but has become a handy tool in the supply chain and retail industries. In a traditional supply chain, goods travel linearly from one stage to the next. Each step relies on the previous one to perform within expectations -- if it doesn’t, the entire chain suffers delays.
IoT technology has given companies a new way to move goods, known as the digital supply chain. Each step in a digital supply chain has oversight from all parties involved.
Devices connected to the IoT network provide transparency in the manufacturing, logistics and retail processes, allowing businesses in the supply chain to adjust more quickly to unexpected developments such as delays. Merging such technology with artificial intelligence can do everything from letting workers know of malfunctions before they happen to reducing human error.
The ability for individual processes to adjust to a failure in the supply chain is something retail enterprises have never had before -- and they have been putting it to good use. If a part of the chain suffers delays, retail companies can modify their side to ensure goods continue to flow from their end or at least soften the blow from the failure.
eCommerce Technology
The rise of digital technology in the retail sector has given rise to another powerful tool -- eCommerce. Even before the COVID-19 pandemic, digital storefronts like Amazon had already become the most popular way to buy and sell goods in the U.S.
The benefits of eCommerce to retail businesses are numerous. Customers prefer digital storefronts over traditional retailers because of the convenience and ease of buying goods. eCommerce is so essential to today’s retail industry that the longevity of retail brands can be decided by whether or not they have a digital presence.
In addition, eCommerce technology makes it easier for retailers to keep their stock. Goods bought online come straight from the warehouse rather than from warehouse to store. This streamlines the buying process and makes it easier for retailers to sell their products.
Digital storefronts also keep demand for goods high in an economy where people are becoming more frugal. Because global inflation is causing the cost of living to skyrocket, the ability to sell goods online gives customers a greater incentive to spend money, keeping retailers and suppliers in business.
Retail Technology Is Essential for Recovery
In an age where many challenges are facing the economy, retail technology is helping keep businesses afloat. Digital solutions are being utilized in every part of the supply chain to make it more efficient and transparent, allowing the worldwide supply chain to meet these challenges.
Image Credit: Manczurov/Shutterstock
Devin Partida writes about AI, apps and technology at ReHack.com, where she is Editor-in-Chief.