Interview: Supply chain excellence as a matter of course

Inventory management has become a far more complicated and important discipline in retail as the number of channels on which shoppers can purchase items has grown.

Louise Baker, head of supply chain at the UK & Ireland division of hair and beauty supplies business Sally Beauty, argues that new technology and burgeoning eCommerce channels, combined with more complex customer fulfilment expectations, means it is even more important for today's retailers to have "supply chain excellence".

"Technology has given more choice and allowed the customer to be savvier with their buying habits," she explained to Essential Retail, earlier this week.

"Stock has become more of a priority than ever – it's all about having the stock available for the customer when and where they want to make that purchase. Retailers have to be far savvier to serve that customer, and it's about working with the suppliers and getting your systems talking to their systems."

Sally Beauty operates 250 UK & Ireland stores, including 60 trade-only outlets supplying equipment to hairdressers and salons, and is evolving its business to meet modern demand off the back of annual turnover last year of £138 million. Although the majority of its trade is conducted with other businesses, it is still facing similar challenges to those faced by solely B2C retail operations.

Staff in its stores will soon be armed with iPads so that they can offer customers so-called endless aisle shopping, whereby an out-of-stock product can be located elsewhere in the supply chain, thus potentially saving lost sales. And as Sally Beauty's eCommerce operation continues to grow – it accounts for around 13% of sales at present but the company would like to push this towards 25% – click & collect services will be offered.

"It's no longer the case of one retailer doing it, setting them apart from the rest; it's now a case of retailers being set apart if they're not doing it," Baker explained. "It's definitely not a USP any more – you should be seen to be doing this as normal service, even if it's not with a short pick-up time."

Putting the customer at "the centre of everything" is the target for Sally Beauty in the UK and Ireland, with Baker identifying Amazon as the company "you aspire to be" in terms of service levels.

Baker is just one of many retailers to cite "customer centricity" as a prerequisite for successful modern business, but surely keeping customers happy is what the industry has always been required to do? Why are retailers talking this way, as if it's a new phenomenon?

"Before it was about getting the customer to your store – it was the marketing around getting the customer in," Baker explained.

"Now the shopper, with a phone in their pocket, can access everything and everyone; it's about how do you get them to access you, specifically, how do you keep them there and what is customer satisfaction."

She added: "How do you keep them shopping with you? What are you doing that's different to everyone else?

"There's more competition than ever with technology and I think it's the evolution of technology that has led us to all these buzz words."

Efficient inventory management

A key investment for Sally Beauty in 2015 has been a new forward-forecasting system from Slimstock, which the business began to implement in March and expects to be operational company-wide by the end of the year.

Baker says Slimstock, which she describes as a "very visual" and "pictorial" system, will make inventory management more efficient for the retailer. Sally Beauty UK & Ireland has around 15,000 products in its warehouse, and the new tool provides staff with their own bespoke digital dashboards so they can focus on top sellers or deviations, and more easily monitor their category's performance and individual KPIs.

"Working with Slimstock enables us to get a stronger forward forecast on which to base our purchases – it's getting very 'old-school' to look at average demand and historical numbers," she explained.

"I think the more channels you add in and the more complicated you make the route to customer, the more reliant you are on technology to give better answers, rather than relying on 'best guest' spreadsheets and old systems."

Register to attend the Buying and Merchandising Summit

Baker is a confirmed speaker at the inaugural Buying and Merchandising Summit, which is set to take place at London's Cavendish Centre on 22 September 2015.

As part of a line-up of big name speakers from the world of retail buying and merchandising, the Sally Beauty supply chain boss will present a session called 'An omnichannel approach to inventory management', where she will debate how technology has transformed her role at Sally Beauty and the discipline of merchandising in general.

Commenting on what she expects to gain from the summit, she added: "The principals are the same across merchandising, so the summit is about sharing best practice and creating new best practice as well.

"It's affirmation that we've all got the same challenges."

Baker argued that retail professionals can become siloed in their own organisations so it can be valuable to discover the strategies other companies have put in place that might be relevant elsewhere.

"It's always nice to know you're not the only one who is suffering from the challenges created by multichannel distribution," she said.

"There are creative people out there [in merchandising and planning] who you don't hear from because these subjects are not widely discussed – the numbers stuff is what people shy away from. As customer models continue to change, this is becoming more important and there is now more pressure on it."

Many of the issues addressed by Baker will be topics of debate at the Buying & Merchandising Summit 2015, which takes place at London's Cavendish Centre on 22 September. Speakers from Adidas, Jacques Vert, Levi's and Topps Tiles – as well as Victoria Plum board member George Adams – are among those confirmed for the one-day event, which includes a comprehensive educational conference programme and a valuable opportunity to network with industry peers.

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Buying & Merchandising Summit 2015

Register to attend the Buying and Merchandising Summit