For retailers, offering personalized customer service is a vital component to satisfying digital age consumers. Consumers now expect personalization in all aspects of their buyer’s journey with the option to shop whenever, wherever and however is best for them. The new expectations ushered in the increased prevalence of customer-driven supply chains, where digitization is essential to building resilience that can navigate volatility to meet specific customer needs.

From the use of Internet of Things (IoT) solutions and collaborative robotics to the combined integration of advanced analytics and machine learning, innovative technologies are key to developing supply networks that put consumers first — not just demand — and boost personalized customer service.

Four Pillars of Supply Chain Personalization

Above all, supply chains need to be fast, flexible, reliable and efficient from end to end in order to create the resilience needed for fostering personalized customer experiences. Achieving those four pillars of personalization presents a wide range of challenges:

1) Increased fulfillment costs due to aligning inventory levels with a wide array of customer preferences (e-commerce vs. brick and mortar, buy online pick up in-store, same-day delivery, direct to consumer)

2) Planning accuracy and distribution complexities that lead to out-of-stocks and shipping delays, inhibiting personalized service and damaging customer relationships in the process

3) Unpredictable demand volatility as customers conduct convenience-based shopping and transition between e-commerce and brick and mortar

4) Increased e-commerce return rates that require supply chain agility to handle high volumes of product returns on tight turnarounds from several different channels and catalogs

All of these challenges are complex in nature and produce large volumes of data for retailers to compile, analyze and act on. By digitizing supply chains, retailers can automate their data capture and analysis to leverage actionable analytic insights in real-time — further enabling them to build supply chains that are fast, flexible, reliable and efficient. And most importantly, it builds the resilience that supply chains were previously lacking while optimizing KPIs like inventory turns and costs.

Why Linear Supply Chains Won’t Work

The traditional supply networks of the past weren’t built to be customer-centric. Linear operating models lack end-to-end visibility and don’t have the built-in agility to meet the expectations of today’s consumer. Without a holistic view of their entire supply chain, retailers can’t take the necessary steps to develop personalization between company and customer.

Traditional supply chains are also susceptible to the bullwhip effect of fluctuating demand, which causes severe disruptions that lead to excess or depleted inventory, lost sales and a poor customer experience at the store level. Effective collaboration between retailers and manufacturers has become increasingly critical to developing supply chain efficiency that generates personalized customer service. However, linear models lack transparency across the entire supply chain — making it difficult for retailers to compile accurate data from several different suppliers to manage risk and resiliency.

Consumers have grown to expect more from supply chains than stocking, reduced costs and shipping products. In today’s age, supply networks need to be as seamless and accommodating as possible. Linear supply chains aren’t structured for executing quick delivery times and return turnarounds.

Digital Transformation is the Answer

Rather than linear models, digitized supply networks are the most logical strategy for offering personalized customer service. By leveraging the benefits of advanced technology, retailers are building a new foundation for their supply chains that enables them to prioritize customers’ needs and maximize personalization. Digitized supply chains must incorporate the following forms of innovation into daily workflows that all combine to enhance operational efficiency:

• Advanced analytics for actionable data insights
• Automated demand forecasting combined with short-term demand sensing
• Sales & Operational Planning and Execution (S&OPE)
• Integrated Business Planning (IBP) including trade promotion management
• AI and machine learning for better accuracy
• RFID tracking and tracing and RTLS for specific category needs
• Collaborative robots for enhanced operational efficiency

With these technological tools in their arsenal, retailers gain the ability to proactively build customer-driven supply chains that provide personalized experiences regardless of where, when and how consumers are shopping. As digital transformation continues to accelerate, curating personalized customer service will become increasingly reliant on a digitized supply chain. The retailers that act now on digital supply chain adoption can become industry pioneers of personalized customer experiences in the post-pandemic environment.