Ever since Covid became a household name and the pandemic crept into business operations, global supply chains have been under more pressure than ever.
It’s one of the reasons why the urgent transformation of supply chain commerce is high on the agenda of retail giants, industry leaders, product experts and change agents.
Manhattan Associates is one company working to drive this change.
This week, the US retail software giant brought together key industry players in Berlin as the company’s CEO – Eddie Capel – plays a vital role in the global discussion about where the industry should go next. retail.
AM City spoke to Capel to get his thoughts on the impact of the current challenges on retail, wholesale and manufacturing businesses in the UK and globally, and what the next big transformation of the unified commerce, powered by more advanced technology models.
Retail, wholesale and manufacturing heavyweights are gathering in Berlin this week to share ideas and experiences. After the pandemic, why is it so important to meet in person, why now?
They’re no strangers to change, but the pandemic has dramatically accelerated the pace of change over the past two years. While the pandemic thankfully appears to be abating, it has sparked changes in the retail industry that aren’t going away anytime soon.
“Bringing players together in person now is important so they can validate the changes they’ve had to make to their business strategies during the pandemic.”
For example, a number of our clients have expanded their technology strategies to take advantage of the latest automation and robotics technologies to overcome labor supply challenges, and RFID technology has been increasingly used to improve inventory accuracy. They are also evaluating new technologies like artificial intelligence and machine learning to see what kind of efficiency and performance gains they can add.
The United States, the United Kingdom and the EU are preparing for a real recession. How does the larger retail space hold up?
The retail sector is remarkably resilient. Everyone loves a strong economy and high consumer confidence, but it’s normal for the market to pull back from time to time. As the economy slows and retailers find themselves competing more for remaining business, agility and customer experience become increasingly important. We have seen incredible innovations that have enabled our retailers to keep pace with changing shopping habits while balancing operations between online and in-store functions.
Many of our customers have transitioned to our microservices-based, cloud-based omnichannel order management system, enabling them to quickly transition from a DC-centric fulfillment model to a dispatch model. from anywhere including shipping from store, online pickup purchase. in-store, shipped with Amazon-Prime, etc. Many of them quickly turned their stores into fulfillment centers, saved jobs and handled huge spikes in e-commerce orders, all while delivering products faster and more efficiently. This is a HUGE competitive advantage that has enhanced both their profitability and sustainability.
After experiencing several years of pandemic misery with multiple lockdowns, how much more can the various retail sectors handle?
As I mentioned above, the pandemic has certainly accelerated the pace of change in retail. These changes provide an opportunity for innovation and improved customer experiences. Retailers are adopting a number of technological solutions to improve their resilience in the market and streamline supply chain processes. For example, they combine their store replenishment and e-commerce fulfillment warehouses, eliminating redundancies in inventory, storage space, and labor.
“Retailers are also using machine learning technology to dynamically optimize order routing to select the cheapest shipping option while ensuring customer promises are delivered.”
They are introducing automation and robotics in the warehouse to reduce labor costs and solve labor constraints. Retailers are also more mindful of their inventory and technology investments. They are implementing new tools to analyze promotions and better identify the real drivers of demand. These companies are also migrating their systems to the cloud, freeing them from the cost of upgrades and maintenance of servers and hardware.
And to zoom in on your business, are you preparing for a difficult period ahead?
We are optimistic for the future. Financially, Manhattan is very well positioned. We are debt free and have recently had an unprecedented five consecutive quarters. These record results are largely due to the fact that our solutions provide an excellent balance of productivity improvements, cost savings, better customer experience and higher revenue generation for the markets we serve. Regardless of the economic cycle, companies are always looking for the kind of agility, flexibility and value that we provide.
What are the main challenges your business is currently facing?
Our biggest challenge is building awareness of our world-class point-of-sale and store solutions. Manhattan is so identified with our market-leading supply chain execution solutions – our warehouse management, transportation management and order management solutions are used by some of the biggest brands in the world – that our next-gen outlet can get lost in the mix.
“The role of the store associate is changing rapidly.”
Manhattan’s store solutions are designed to support modern sellers by facilitating world-class personalized service, while simultaneously enabling efficient online order fulfillment. Our cloud-native POS solution provides a single, intuitive experience for all of these functions, empowering store associates through its unified omnicart technology, a 360-degree view of the customer, real-time customer management tools and endless aisle capabilities.
Looking ahead, despite the economic downturn, where do you see opportunities for growth?
Current market conditions have already generated strong demand for our core solutions and our commercial momentum is good. Our products are known for their robust functionality and we innovate in white space.
In 2017, we launched Manhattan Active Solutions, accelerating our business transition to cloud subscriptions. Demand for our cloud solutions has been strong from new and existing customers, particularly in the retail, wholesale, grocery, medical and pharmaceutical industries. Cloud Solutions is our fastest growing revenue line and accounted for 77% of our total software revenue in 2021. We expect that number to continue to grow this year.
With 16 offices in 13 countries and partner relationships on almost every continent, we see plenty of opportunities to grow our business internationally. Last year, our total revenue from our EMEA segment increased by 18%, surpassing $100 million for the first time in company history.
Do you have anything else to say or share with our readers?
Environmental initiatives were finally making sense before the pandemic. After a brief pause, we see these questions come to the fore again. Specifically, the growing number of environmentally conscious consumers is leading to more environmentally conscious retailers.
“Environmental sustainability is hugely important, but companies need to balance that with their financial sustainability.”
Fortunately, these two goals can be symbiotic…a more efficient and effective supply chain is both more sustainable and more profitable. Manhattan Associates helps clients build more efficient and effective supply chains. We recently showcased our environmental, social and governance initiatives on our new ESG page and are working with our customers to provide consumers with greener buying options.
Finally, what do you personally hope to get out of this week’s event?
I look forward to reconnecting with our European customers, getting first-hand updates on their business, and ensuring that our product and service development strategies align with their needs. We have stepped up our innovation to also keep up with the rapidly changing market. For example, Manhattan is proud to be the first vendor to integrate a warehouse execution system into a warehouse management system to accelerate automation adoption. We’ve also partnered with many industry-leading robotics and automation vendors to create the Manhattan Automation Network to accelerate the setup and execution of automation initiatives.
Manhattan is also leveraging the latest in RFID technology to help stores improve inventory accuracy, improve operations, and fulfill orders much more efficiently. And we’ve also pioneered the use of machine learning to improve the accuracy of delivery date calculations when fulfilling online orders in stores.
To innovate and solve these real-world problems, it is imperative that we have a very close connection with our customers, and this annual meeting is a wonderful opportunity to re-establish these links.