Retail & Logistics

Retail & Logistics – an acutely challenging environment

The key to competing in the fiercely competitive retail and logistics environment is to be continually optimizing performance, and that’s not an easy task without deep insights across your entire operation in real-time. We’ll come to the solution in a moment, let’s explore the problem with the traditional retail business model in detail in detail first.

Competition is fierce

The risk of falling behind the competition is at the forefront of many organization’s thinking in retail and logistics, particularly in view of new market entrants from existing industry ecosystems and the emergence of non-traditional competitors.

You must mitigate this risk. As a traditional retail and logistics organization, you need to increase your speed of operation, and transform your business model, if you want to remain viable in the face of retail innovation and more agile competition.

New retail business processes and models are being powered by evolving technology and alternative ways to connect with consumers. Online marketplaces are geographically agnostic and market demand is expanding for highly specific products. Small niche players can reach consumers regardless of their physical location, and lower barriers to market entry are helping to fragment the landscape.

Digital Transformation Innovation and Disruption Prevail

Supply Chains are under pressure to invest in new technology, including core systems and digital transformations. Digital disruption and innovation are becoming critical parts of the entire strategy of many businesses, as much needs to change.

The role of retail supply chain management must alter to capitalize on the value of every digital investment an organization makes. Leading companies in the Supply Chain Top 25 are early, and frequent adopters of digital technologies – enabling business capabilities and outcomes that allow them to thrive even in the harshest economic conditions.

Supply Chain Resilience demands you exploit digitization

Supply chain resilience enables you to reduce the risk of uncertainty while also improving the efficiency and reliability of day-to-day operations.

The challenge is that many traditional methods of achieving supply chain resilience run counter to the business goals of reducing costs and improving efficiency. For example, you could build resilience by producing and holding extra inventory, sourcing excess capacity, and onboarding redundant suppliers. However, these measures also increase costs and add complexity to the supply chain process flow, reducing your competitiveness in the market.

Lockdowns of cities, whole countries and border crossings cause disruptions to shippers as well as confusion around shipment statuses at multiple locations.

Limited labour workforces at warehouses and distribution centres means delays at pickup and delivery locations, potentially causing rerouting of products direct to stores.

The retail logistics supply chain solution lies with the development of new, agile business models, as well as condemning less-responsive business models and, potentially, industries to the history books. To thrive, supply chains must be enablers of these changes by possessing solid operational models and transformational capabilities.

Technologies such as on-demand fulfilment are changing how and where retailers hold inventory. Fulfilment and last-mile execution, transparency, workforce, and pricing are key areas hit the most by a crisis. This is where retail CIOs must focus their attention and bring the full potential of digitization into play.