This is a buyer’s market. She is now more informed, is more aware of her rights and of course, has more options than ever. Hence, to survive in this fiercely competitive market and woo the buyers, retailers must transform their supply chain and understand how the cloud technology and network can help them achieve their aim.

GT Nexus – a cloud supply chain management platform provider, has released a white paper that talks about how retailers should develop a new model which gives a retail customer the same buying experience over all distribution channels. In this regard, cloud networking can come as a great help, which manages effective distribution, visibility, data storage and customer engagement; while keeping costs to a minimum.

 “The most visionary retailers are investing big money into new technology to gain visibility, manage the growing pool of data, and collaborate with their global trading partners. Rather than buying and installing traditional license software, they’re now “renting” their technology — paying for subscription Software-as-a-Service (SaaS) models, hosted in the cloud,” says the paper.

The paper points out how cloud technology is an effective one, and how it will help retailers cut costs by alluding to a recent Citi Research report. “Citi estimated that 2012 IT capital expenditure will increase by a smaller percentage (3.5%) than total capital expenditure (4.9%). While it may at first sound like IT is spending less, it is actually illustrating an increase in payment for SaaS, which is included in operating expenses and not as capital expenditure.”

T he paper says, “(Retailers) must fight to balance increasing supply chain costs with lean inventory and low-wage labor strategies. Retailers will increasingly use cloud-based trading platforms to assess their manufacturing costs and supplier performance when making global sourcing decisions.”

Today, supply chains spread across continents. The complex situation often results in poor distribution services. The paper points out that supply chains are intertwined with more than one country’s financial system, which calls for lean, proactive inventory management. “Retailers must be able to trace inventory through all channels on single visibility platform, moving it around as demand fluctuates and keeping down the costs of buffer stock and missed sales,” says the paper.

Physical stores are no longer places to simply purchase an item; they now can serve as an arm of the extended supply chain. In part, the evolution of the store is a response to threat of  “showrooming”— when customers visit a store to examine a product but ultimately purchase it online from another company.

More and more people are shopping on their smartphone and tablets and doing this on the move. Buys in many such cases are spontaneous, and retailers have to address this demand without overstocking. More retailers are now racing to get hold of the mobile and online shoppers. “Those that pull ahead during this transitional phase will have time to strengthen their brand,” says the paper.


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