How Retailers Can Increase Supply Chain Efficiencies With the IoT
With the pandemic keeping individuals around the world sheltered inside for much of 2020, the retail experience has largely shifted online — and it’s expected to stay that way moving forward. According to PYMNTS’ Black Friday 2020 Report, more consumers shopped online this Black Friday than ever before. While 47 percent of shoppers surveyed did opt to shop online out of fear of catching COVID-19, 68 percent justified the move simply as online shopping being easier.
Due to the volume and quality of technology available today, consumers have come to expect a premium, seamless experience from the brands they shop from, especially online. However, the shift to e-commerce presents a multitude of challenges for the various players in the supply chain. From uncertainties over stock availability, to difficulties ensuring product quality and meeting delivery deadlines, supply chain operators are facing an overwhelming production and delivery process if they don’t adopt tools to reinforce operations as demands rise. Supply chains that were previously established to accommodate far fewer e-commerce orders will need to be rethought to handle the increased activity, enabling retailers to still deliver packages to consumers on time and in safe conditions.
To overcome these obstacles, retailers can turn to the Internet of Things (IoT), a technology that offers real-time visibility into the product journey and empowers them to leverage up-to-date insights to increase customer satisfaction. With the IoT, retailers can achieve the following capabilities within their supply chains:
Real-Time Inventory Updates
To manage customer expectations throughout the shopping experience, it’s important for retailers to be able to communicate up-to-date insights into inventory availability, which they can secure using the IoT. Starting in the warehouse, operators can attach IoT-enabled sensors to product shelves to monitor weight fluctuations in items that signal when certain products are running low. With the ability to recognize when popular goods are flying off the shelves, retailers can proactively restock before they run out. Likewise, from a consumer standpoint, it's critical that retailers update their inventory in real time so customers don’t attempt to purchase items that aren’t actually in stock. As more customers shop online — where physical inventory isn’t visible — keeping a pulse on stock prevents the risk of transactional error that can hold up business later.
Quality Assurance Across the Delivery Route
Similar IoT-enabled sensors can also be attached to package containers out for delivery to monitor environmental conditions (e.g., temperature, humidity, tilt) that may impact product quality and result in shipping losses or errors. Having insights into travel conditions is particularly helpful for fragile or perishable goods (e.g., groceries, medicine), as retailers will be alerted to any changes in atmosphere that may harm the product. With this information, retailers can intervene proactively so that damaged packages don’t arrive on customers’ doorsteps.
Insights for Optimizing Product Delivery
In addition to monitoring environmental conditions, IoT sensors attached to shipment containers can also be used to track the location of parcels from the warehouse to their final destinations, enabling retailers to provide live delivery approximations of their package whereabouts to customers. Internally, these location updates can help supply chain operators recognize shipping routes prone to delays so that they can opt for more direct ones and expedite delivery times.
With 77 percent of consumers saying that delayed order arrival would influence future purchase decisions with an e-tailer, it’s critical for business that supply chains are running as efficiently as possible. In this sense, the IoT has established itself as a major logistics partner for all retailers. By setting up a continuum of IoT sensors across the supply chain, retailers can increase visibility into all stages of the package journey. As a result, retailers can operate with reduced risk of product degradation and returns, help their operators meet their shipping deadlines, and deliver an overall optimal shopping experience to customers.
Arnaud Tayac is director, business operations and services at Sigfox, a leading service provider for Internet of Things (IoT).
