Nearly three-quarters (74 percent) of top retail executives in procurement say that supply chain technology can provide a significant competitive edge, according to the inaugural Retail Pulse survey from C2FO,the world’s market for working capital®.
Supply chain technology – such as supplier collaboration enhancement and trade finance solutions – can provide efficiency to existing operations, streamline inventory and increase revenue at a time when an overwhelming majority (88 percent) of retailers say they are focused on improving margins in the year ahead. Fortunately, a majority (62 percent) feel their organizations are agile when it comes to embracing these solutions.
“This data proves what we’ve seen in the market since 2010 when we started working with the world’s largest retailers to help drive bottom line growth through their supply chains,” said Sanjay Gupta, COO of C2FO. “With margin pressures impacting retailers, executives understand that innovation and agility go hand in hand; only those who embrace new technologies and solutions will remain competitive.”
Addressing Supply Chain Pressures
While the survey showed an overall positive sentiment among procurement executives regarding agility at their organization, 37 percent stated that their organizations are still ‘not very agile’ or ‘not at all agile’ at adopting new supply chain technologies. Several barriers to adopting supply chain technology include budget limitations (53 percent), resource constraints (46 percent) and stakeholder buy-in (35 percent).
When it comes to managing supplier costs, more than half (53 percent) of retail executives said that price negotiation was their top challenge, followed by margin improvement (48 percent) and price transparency (37 percent). As such, it is no surprise that 43 percent of those surveyed are planning to invest in supplier collaboration enhancement to remain competitive in the year ahead. Additional investment will be allocated to logistics technology (71 percent), analytics services (64 percent) and risk mitigation (20 percent).
“Through our work with Global 2000 retailers, I’ve seen that the most effective supply chain strategies are those that incorporate innovative technology to increase working capital transparency and de-risk the supplier base,” added Sean Van Gundy, C2FO Managing Director, Working Capital Advisory. “The results of the survey show continued pressures to improve margins. It is now more important than ever for retailers to consider cost-effective solutions that improve supply chain health, gross margins, and drive bottom-line growth.”