Chapter 2

Talking heads: Retail leaders, technology, and ongoing supply chain strategy management

Retailers battling economic turmoil and trying to build robust and resilient supply chains will be heartened by the fact they are not alone. Below are a selection of retailer and industry expert quotes on what the industry is facing up to in 2024 and beyond.

Rajiv Thakrar, Director of group finance at fashion retailer Monsoon Accessorize, underlines the fundamental dynamics of retail in 2023.
“The name of the game is when the container lands the retailer’s job is to liquidate it and turn it into cash as quickly as possible,” he says. “In this current challenging economic environment if you’re not doing that you’re not going to be doing particularly well as a retailer.” 

Laetitia Kotsiopoulos, Director of digital transformation at Intersport Group, highlights the challenges in the months ahead.
We continue to face ongoing disruptions in the global supply chain, including geopolitical tensions in certain regions and persistent trade disputes, which are expected to persist into 2024,” she says. “Additionally, we are currently dealing with excess inventory, which is impacting our order books like every brand. Looking ahead to 2024, we anticipate shortages in certain products and a growing need to increase production speed and capacity.

The Intelligent Retailer series 

Microsoft Dynamics 365 and HSO can help you to thrive as a resilient retailer, from delivering the best customer and employee experiences to getting the most from your data and supply chain. The Intelligent Retailer video series below shows how Microsoft technology and HSO will make a real difference.

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Marcel Borlin, CTO at Harvey Nichols, is finding ways to increase efficiencies in warehouses with technology. There are things we’re doing in warehousing to improve productivity with tech – we have lots of small-to-medium-sized projects on the go as it can drive down costs so it’s quite a focus for us,” he explains. “One in particular, is optimising the pick journey for online shops and simplifying the pick and pack operation by taking steps out of the manual process by using technology.”

José Antonio Ramos Calamonte, CEO at ASOS, spoke of the retailer’s return to profitability following a period of supply chain-related challenges that prompted a comprehensive turnaround strategy. He highlighted some numbers illustrating the breadth of the challenges faced.
At our FY22 results announcement, we reported net debt of £153 million, down from a net cash position of £200 million in FY21 and £408 million in FY20,” he said. “This decline was predominantly driven by the purchase of too much stock, with FY21 and FY22 intake c.50% higher than in the preceding two years. The issue was compounded by the sharp bounce back of store-based retail post-pandemic and the Russian invasion of Ukraine, which both triggered a deterioration in the global macroeconomic backdrop and resulted in ASOS exiting its Russian operations on 2 March 2022.”

Calamonte added: “We closed FY22 with £1.1 billion of inventory, twice the size of our stock balance in FY20. In two years, the c.£560 million increase in our net debt position was broadly equal to the c.£550 million increase in our stock. While underlying issues were undoubtedly compounded by unpredictable demand and disrupted supply chains during the pandemic, it was clear that significant changes were required to the way the business was operating.” (9)

Rose Maher, Retail Lead at HSO, works with retailers to understand their pain points and often sees businesses held back by legacy technology

"Operating with legacy – or outdated – systems open up retailers to cyberattacks which could shut down businesses and entire supply chains,” she warns.“Legacy systems are incredibly expensive to maintain, too. We have found that when we go into audit retailers, they already spend extensively on patches and work-arounds, and there might be 10-20 people re-entering data or maintaining spreadsheets with pivot tables – we make them aware there’s already a business case for upgrading technology"