In the last two years, retail has undergone a significant transformation. The industry, like all others, has had to evolve time and again to succeed in the new logistics landscape. The pandemic has set in motion a demand for speed and convenience, albeit in a cost-effective way, and retail supply chains in today’s multichannel world are struggling under the weight of this pressure.
Worldwide retail sales don’t show any signs of slowing, however, and there is anticipated growth between 4% and 5% each year through 2025, that is projected to hit about $31 trillion. This tremendous growth is owed to the massive shift to e-commerce which, although was set in motion long before the pandemic, has been accelerated by it. In fact, it is expected to account for a third of all retail sales by 2030.
Brick by brick: Building a new retail landscape
This is an enormous change and many brick-and-mortar retailers are still catching up with it. Most retail logistics supply chains are optimized for stores and online is considered as an almost separate business. This ends up being the reason for poor cross-channel coordination that can be particularly difficult to manage during peak season.
For retail businesses to thrive, they must learn to adapt as the industry evolves. By taking a closer look at some of the emerging patterns, industry trends that have persisted and consumer behavior, we can determine the future of retail.
Trends with the biggest impact on retail logistics
- Disruption, and more disruption: If COVID-19 prepared businesses for anything, it was to expect the unexpected. While black swan events such as the pandemic are few and far between, inflation, supply chain and economic disruptions have gradually become the norm in the retail industry. Inflation leads to increased costs in retail operations, which leads to increased prices, thus impacting consumer behavior.
- Convenience still reigns supreme: Ease in shopping has grown to become a top priority for many customers. This is why a seamless and streamlined shopping experience is vital to customer success. A convenient checkout system, better technology for product discovery, virtual trials at stores, and personalized events are only some of the ways to promise an elevated customer retail experience.
- Renewed focus on sustainability: It is no news that companies with business models that prioritize sustainability have a greater chance of wooing customers. According to this report, 88% customers are more likely to be loyal to companies that demonstrate strong social and environmental responsibility. Adding more sustainable last-mile delivery models can enhance the bottom line through greater efficiencies and boost the company’s brand image. Business and supply chain executives are also incentivized to spread awareness and come up with sustainable strategies.
- Optimizing your last-mile fulfillment is vital: While customers are always seeking deliveries that are free and fast, last-mile delivery is also the most expensive and time-consuming part of the supply chain. According to a Statista report, one-third of the respondents of a survey of key stakeholders from postal, parcel, and logistics enterprises say the biggest challenge in last mile delivery in North America is the lack of qualified drivers for hire, closely followed by last-mile process inefficiencies.
- Omnichannel shopping is here to stay: Consumers no longer want to pick between in-store and online shopping. They wish for online and storefront operations to work in tandem with a single customer view across all communication channels. One of the many reasons for omnichannel’s growing popularity is that a consumer’s purchase journey involves multiple touchpoints and multiple devices, often to look up the best deals available in the most convenient format.
Adopting a dispatch management platform such as Locus for your retail business can automate fulfillment stages with secure applications and seamless integrations. An efficient logistics solution helps to plan more efficiently by optimizing delivery routes and improving overall operational efficiency. Retail businesses must take cues from the ongoing dynamics and prepare for the future with technology as well as agile last-mile strategies by their side.
Sources:
https://www.mckinsey.com/~/media/mckinsey/email/rethink/2022/05/25/2022-05-25e.html
https://fitsmallbusiness.com/retail-statistics/
https://www.bringg.com/blog/logistics/supply-chain-trends/
https://www.retaildive.com/spons/5-retail-trends-driving-new-imperatives-in-2022/631387/
