Bamboo Rose Blog | Retail News

Building Supply Chain Agility to Support Growing Ecommerce Sales

Retailers have seen the pandemic fundamentally change how consumers shop. Now, it’s time to reconfigure the standard retail business model to cut costs, optimize inventory, and secure customer loyalty through online sell channels.

For brick and mortar retailers, online sales can be a significant detriment to profit margins. An array of new dynamics gnaw away at profits. Returns, the additional costs and inefficiencies of B2C deliveries versus the relative simplicity of bulk warehouse and store shipments, and unexpected upticks in online sales vs. in-store sales that translate to unsold or mis-allocated inventory can all prove to be a thorn in the side of a large retailer.
But retailers must accommodate and embrace online sell channels despite the barrage of new pain points that come with this transition. The convenience of at-home delivery and the addictive ease of online shopping are too good to pass up for the average consumer.
Clearly, retailers can lose out in several areas in an online world. So, where can they save? One solution is to change your approach to direct sourcing and purchase order (PO) management.

There are two primary considerations when it comes to PO management.
On the one hand, it’s vital to secure surety of supply, especially during times of turbulent supply chain disruption, carrier capacity constraints, and raw materials shortages like retailers are experiencing now. Retailers need to lock down freight capacity, raw materials, and manufacturing production and labor well in advance to meet demand and delivery deadlines in a timely fashion.

However, sales trends across markets can change quickly. Integrating updated sales data into finalized PO’s is key to maximizing profit margins, ensuring product arrives on trend, and eliminating time-consuming and costly last-minute PO changes that can further delay time to market.
An Agile Purchasing approach reduces lead times and allows retailers to delay key decisions about product details including size, color, tagging, packaging, and warehouse or distribution center destination until later in the process.

Rather than making final detailed decisions months in advance, retailers can hold off on these details until closer to the production date in order to base decisions on updated data related to sales trends across sell channels, geographies, and markets.
With Agile Purchasing, retailers only need to give factories and suppliers an early view of general demand when they initially submit a PO. This early visibility gives partners the notice they need to secure the materials, production, and financing necessary to fulfill an order upfront. That way, retailers can confidently secure surety of supply months before production begins.

Over the next several weeks, retailers have the chance to collect real-time sales data to identify the sizes, colors, and sell channels seeing the highest demand. This insight informs intelligent decision-making about consumer interest so that retailers can curate the most profitable, high-demand product offerings from suppliers as they submit final PO details.

Agile Purchasing gives retailers market flexibility to react quickly to increases or decreases in online sales. If online sales are suddenly trending upward, retailers can request that suppliers tag and package inventory for shipment to ecommerce distribution centers.
Allocating inventory based on the most recent sales data weeks out from production rather than months out gives retailers a much better chance of selling more product, making fewer last-minute PO changes, and increasing customer satisfaction.

Ultimately, Agile Purchasing increases profitability, cuts costs, and saves time. As the popularity of online shopping increases, retailers need to identify opportunities to make smarter, more cost-effective decisions at each stage of the supply chain to buffer for disruptions down the line. A smarter, more cost-effective approach to PO management positions retailers for success from the very start.
Bamboo Rose offers Agile Purchasing as an integrated solution within the Bamboo Rose platform for retailers looking to build resilience to new sell channels and business models.

The connected platform enables seamless data sharing across all supply chain partners to help retailers reduce order changes by 50% and remove 3 to 6 weeks from the order cycle.
Want a PO management solution designed with agility in mind? Try the Bamboo Rose platform today.