52% of Retailers Plan to Modernize Their Supply Chain Processes

Retailers, dependent on supply chains, are making modernization moves to better facilitate keeping their inventory stocked, as indicated in the PYMNTS collaboration with Corcentric, “ Digital Payments: Modernizing the Procurement Process .” Although less than one-third of sector businesses surveyed currently invest in automating their procurement systems, more than half say they are making plans to.

Some other sectors surveyed for the study are mainly investing in digital procurement technology to reduce overhead costs or expand their businesses. However, 66% of retailers say they are doing so to modernize their processes, with 41% specifically doing so to upgrade their systems for supplier data.

Part of this motivation may be driven by the logistics sector’s push toward automation over the last few years. PYMNTS’ data shows that 45% of trucking and transportation businesses surveyed plan to innovate their AP platforms to better process high volumes of payables. In turn, retailers who haven’t already automated are racing to modernize, allowing them to compete with the sector’s largest players for warehouse space and avoid other supply chain headaches.

This strategy is already working for retailers such as American Eagle Outfitters. The company’s 2022 third-quarter results reported an operating profit of $118 million, exceeding its pre-pandemic 2019 gains. One noted contributor to this growth was the organization’s logistics services subsidiary, Quiet Platforms. It allowed American Eagle to increase operational efficiencies and capacity and assist third-party clients in their logistics optimization. Utilizing Quiet added two percentage points to the clothing company’s revenue growth. The Gap also got into logistics with its launch of GPS Platform Services late last year.

To assist small and medium retailers and other entrepreneurs in facilitating modernized logistics efforts, ShipEngine in November partnered with GoDaddy to streamline shipping for merchants whose stores are hosted by the web giant. With ShipEngine’s transportation application planning interface (API), U.S.-based SMBs can create shipping labels from their GoDaddy accounts and get select discounted carrier rates.

As well, earlier this month, Shipium and Passport announced a partnership intended to ease international shipping for brands and retailers. By integrating Passport’s logistics services with Shipium’s shipping platform, merchants may connect to discounted or negotiated rates for dozens of carriers. When a label is created using this platform, customers receive a notification, order status and updated tracking information.

As other competitors modernize their systems, the pressure is on retailers who have so far put off automating their procurement processes — those that continue to delay may find that their ship has sailed.