New Retail’ is a relatively new term that’s been brandished to describe the bridging of e-commerce, physical retail, and logistics in order to improve the efficiency of selling and buying, as well as improving the shopping experience.
Retailers and brands who want to stay competitive in the ‘New Retail’ world will need to anticipate the impact of increased consumer demand on their traditional retail ecosystem. They will need to embrace technology to retain customers, attract new customers and generate new growth opportunities.
Some of the recurring topics that keep coming up with regards to the supply chain and ‘New Retail’ are:
· Out of stock items in physical stores is a big no-no.
· Consumers want more protection from counterfeit products.
· Provenance of products is more important than ever.
In this article, we’ll look at the above supply chain topics from ‘New Retail’ in some more detail, before explaining how UCOT’s world first IoT and blockchain based supply chain ecosystem can solve these issues for retailers and brands.
Out of stock items in physical stores are a big no-no
Many consumers use a mixture of online and offline shopping. Online shopping is still predominantly used by consumers to browse retail websites in search of products, which they will then want to look, feel and try in a brick and mortar store before deciding whether or not to purchase.
Most retailers currently lack real-time visibility of their stock levels and often only find out about low or no stock when a customer notices an item isn’t on the shelves and a sales assistant can’t find the item in the back. It can take a considerable amount of time before the item is back in stock and on the shelves again, as the retailer will need to place an order with the warehouse/distribution centre first.
However, by the time the item is back in the store, the customer will have likely found another retailer to purchase the same or a similar product from. Consumers are very connected these days and if a retailer doesn’t have a certain product they want, they’ll simply go online and find the next best retailer that does have the item in stock. And they might not come back to the first store ever again.
Consumers want more protection from counterfeit products
A lot of consumers have inadvertently purchased counterfeit products. While no one will be surprised that most cheap shoes, belts and wallets from a big brand name bought at a street market may be counterfeit, this is not so for items that are bought online or through reputable retailers.
All too often consumers have been duped into buying counterfeit goods. Countless are the stories about fake wine and spirits being intercepted, and when not intercepted, of the intense headaches they cause. Similarly, there are many reports on people being treated with counterfeit medicine that had serious adverse effects. Other goods that are often subject to counterfeit are fashion items, such as handbags, jewellery and sports apparel.
A lot of manufacturers have traditionally held the view that their brand being subject to counterfeit is a form of flattery. However, by not protecting their brand against counterfeit their brand name actually gets tarnished. Customers who thought they had purchased the real item may give them a bad review online, will speak to their friends and family, or even complain to the authorities.
Provenance of products is more important than ever
Consumers are increasingly interested in where the products they wish to purchase come from. For clothing, consumers demand to have transparency around where the clothes come from and whether they were manufactured ethically. For food items, customers want to make sure that certain products are gluten-free, halal, or produced organically. Consumers also want to know that the foods they’re purchasing where shipped to them within the right environmental conditions, such as at the right temperature.
In China provenance is of even more importance. Chinese consumers are very sceptical about the quality of the goods produced in China, especially after the baby milk formula scandal from 2008 in which the product was adulterated with melamine. This has led to the phenomenon ‘daigou’. ‘Daigous’ are Chinese people who buy products from reputable, green and clean countries where they are travelling or studying and mail it back to their contacts in China, often with a big mark up. Some ‘daigous’ are even reported to earn $100,000 per year plying their trade.
How UCOT enables the ‘New Retail’ supply chain
UCOT is a world first supply chain ecosystem built with the latest IoT and blockchain technologies and provides total traceability of the supply chain in real time. UCOT starts with a small IoT sensor which can be embedded in a product’s packaging, such as a box or pallet. The sensor has its own battery life, can communicate in real-time with the internet, and commits the gathered information into a secure blockchain database.
The gathered information includes, but is not limited to:
· GPS data to trace and map out the geographical journey.
· Temperature, humidity, exposure to sunlight and other environmental conditions that may impact the quality of the product.
· Whether the product has been tampered with, removed from the packaging, or is subject to counterfeit.
As the IoT sensors from the packaging report back in real time, retailers have constant visibility of their stock levels. This allows them to change delivery schedules based on the actual needs in-store. When a store has plenty of stock, the products that were scheduled to be shipped to that store can be sent to another store that’s running low on stock. This will help retailers reduce the amount of times products are out of stock in-store and will help them maximize profits based on actual demand of their products.
The IoT sensors also enable the brand / retailer to have full traceability of the supply chain. When the IoT sensor notices that the packaging of a product has been tampered with or opened it will send them an alert in real time. The brand / retailer can then take action to prevent the product from being sold to a customer, effectively solving counterfeit issues.
The functionality of the IoT sensors doesn’t stop there though. An end consumer can also scan the packaging of a product to see whether the product is the real item, whether it was tampered with and whether it was transported in the right environmental conditions. The entire geographical journey of the product is available to the customer as well, so they can verify the provenance of the product.
A brand can even go one step further and provide more information about the product upon scanning by the end customer. Let’s take wine as an example. Instead of simply verifying the wine comes from, for example, Adelaide in Australia, that it was transported in the right conditions and not subject to counterfeit, the wine producer can also provide the end consumer with the following information:
· How long the vineyard has been in existence.
· That the vineyard is located on a south facing hill.
· An introduction to the winemaker.
· That the bottle contains wine that was aged in an Irish whiskey barrel for two years.
· That the wine tastes similar to the wine from the previous year’s vintage.
· Here is a voucher with 25% off if you buy last year’s vintage.
In fact, a brand can even control who reviews their products on their website by only allowing people who have scanned the real item to leave a review. In this way, they don’t get bad reviews from people who actually purchased a counterfeit product somewhere and didn’t like what they received.
‘New Retail’ poses many challenges for retailers and brands from a supply chain point of view. Not having products in stock in a physical store isn’t good for customer retention or acquisition, while brands need to ensure that they’re not selling counterfeit products or products that weren’t produced ethically.
However, these supply chain issues can all be easily solved by adopting UCOT’s world first supply chain management technology and can even be turned into a competitive advantage by providing the end customer with a more engaging brand experience when the consumer scans the product.
That just about wraps up this weeks report, be sure to hit the ‘follow’ button to make sure you’re up-to-speed with the latest news and information. See you all next week!