Digital supply chain network to address the last mile delivery challenge: Deloitte

National, 26 February 2020: Deloitte India’s ‘Digital Disruption in Retail’ report, released in association with Retailers Association of India at the Retail Leadership Summit, lays emphasis on the need for retailers to revisit business strategies and embrace an always-on agility-driven digital supply chain network (DSN) to address the last-mile delivery challenge of the new-age tech-savvy consumer of the decade.

Backed by deeper reach of digital technologies across value chains, retailers are striving to offer a seamless shopping experience through data-driven insights and analysis conducted using emerging technologies (such as artificial intelligence, machine learning, block chain, and cognitive automation). About 81% companies were able to gather insights into shoppers’ behaviour using the digital data trail to improve engagement and conversion.

Launching the report, Dr. Anand Ramanathan, Partner, Deloitte India said, “ Our report defines the ‘future of order fulfilment and last mile delivery’ as brands focus on blurring boundaries between the offline channels and online channels, bringing a better integrated ‘phygital’ concept to the marketplace.

This mean technology not only transforms a mobile consumer’s shopping journey through personalisation, but it is also changing the role of CXOs who can now look to drive exponential benefits around economics, risk, and value to stakeholders using the technology-led ‘cloud’ concept”.

Adding perspectives, Deloitte India spokesperson said, “India continues to hold a strong position as far as its market potential for retail is concerned and is on its way to touch US$1,200 billion by 2021.

At present, shopper and shopping experiences are technologically enabled and digital has taken a centre stage redefining the meaning of convenience. However, this also adds a new mandate for timely delivery and customer experience that are key attributes for India Inc. to focus on as the rules of the retail business game evolves. 

Our report emphasizes the need of digital supply network that would create a leaning effect at an industry level, helping long-term strategic partnerships, greater consumer confidence and greater business value with the power of technology.”

Factors attributed to the changing retail scenario in India include the following:

• Operation 4.0 digital transformation - New technologies have allowed the traditionally linear supply chain to collapse into an agile interconnected network that unlocks new value across the digitised nodes. New value is being created by digitising and connecting the traditional nodes. This led to the creation of DSN. Innovative and disruptive technologies can enable supply chains to transform into DSNs, which can serve as a powerful competition weapon.
• Creating a ‘phygital’ experience for consumers - Digital technologies provide organisations opportunities to acquire new customers, engage better with existing ones, and reduce the cost of operations (with a positive influence on revenue and margin). Blending the physical and digital experiences to bring the audience closer to the brand is what we call `a ‘phygital’ experience. Retailers need to adapt to an environment where consumers’ tastes are constantly evolving, thereby creating need for continuous innovation to retain them.
• Changing dynamics of last mile connectivity: Intelligence based dynamic first-to-last-mile networks help attain delightful customer experience and personalisation through predictive and self-learning automated approach

Key steps are listed in the Deloitte report that can help cater to the new-age consumers are:

• Creating a customised assortment and visual merchandising plan using heatmaps and in-store/online browsing data for the store: Consumers can use heatmaps/online data to move products with a low sell-through rate to a highly foot-trafficked area, lower price, or order fewer units of the product next month. 
• Enabling customers to add select products to the cart, and then visit the store and physically experience products without browsing all sections of the store: At a few online jewellery and spectacles portals, buyers can use their mobile applications to see how products will look on them before placing an order.
• Making product suggestions or providing information on other variants of the same products after scanning a tag: A British luxury fashion retailer uses RFID e-tags to provide customers access to additional information. Scanning an item in front of a "magic mirror" will call up details on how the product was crafted, along with other suggestions. 
• Enabling customers to self-checkout or visit robotic-checkout counters to speed-up in-store checkouts

Notes to the editor for reference purposes only

This press release has been issued by Deloitte Touche Tohmatsu India LLP.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

Deloitte India herein refers to Deloitte Touche Tohmatsu India LLP.