26 Feb The Retail Landscape is Changing – What Does It Mean for Your Supply Chain?
You may not know it, but we are experiencing a retail revolution. As modern consumers continue to push for convenience and instant gratification, we witness the steady growth of e-commerce, alongside traditional consumer purchasing. In fact, studies show that e-commerce sales are growing at 10% to 12% CAGR.
As a result, the retail strategy is changing. Retailers, both big and small, are expected to closely manage their relationship with consumers, largely through the provision of a seamless online and offline experience. Not only are they expected to encourage repeat store visits for those shoppers who still prefer an in-person experience, but they also have to optimize their online channels for a consistent, user-friendly, intuitive shopping experience. Of course, an optimized approach to e-commerce is, oftentimes, easier said than done. Retailers have to take a deep dive into the logistical elements of their business, especially as it relates to their supply chain.
So, the question becomes: As mid-market and independent retailers face greater challenges and more competition than ever before, what strategies can they implement to ensure their continued success? How can business owners keep up with the constant change?
Focus on the Customer Experience
As retailers build out their transportation management strategy and seek partnership with qualified 3PL vendors, it’s important to identify those suppliers which have an intimate understanding of the retail environment.
Retail, after all, is not an easy process from a supply chain perspective. Those transportation providers with experience in this realm rely on carriers who are intuitively aware of the customer experience; shoppers in the store during the shipment pick-up or drop-off, as well as those receiving the shipment. Ultimately, if a driver doesn’t have a positive relationship with store associates, the retailer’s business could suffer. With this in mind, there exists an integral code of conduct that vetted drivers must adhere to in order to establish and cultivate great relationships with retailers and, in turn, inspire a seamless supply chain. In this regard, the professional, service-conscious partnership that exists between 3PL providers, carriers, and retailers is paramount to on-going success.
Even further, we encourage retailers to seek out those transportation providers who operate with complete transparency, ensuring all risk mitigation requirements are clearly identified from the onset. Enhanced collaboration across all relevant parties will enable information to be shared quickly and, more importantly, accurately. Once both parties have a firm understanding of rates, potential waiting times, detention times and other variables, the retailer can gain a more accurate understanding of shipment timeframes.
The retail industry has largely gone digital, so it should come as no surprise that the supply chain is following suit. As same-day and multi-hour deliveries become more commonplace, retailers will continue to demand a more transparent transportation process, that allows them to know exactly where shipments are and when they will arrive. After all, for retailers to retain customers and inspire satisfaction, they must implement processes which reduce lead times and the risk of manual error to ensure consumers get the products they want, when they want.
In fact, Bain & Company found that retailers that integrate digital technologies into their supply chain rapidly improve service levels while cutting costs by up to 30%. McKinsey also states that companies who strongly digitize their supply chain could expect to boost their annual growth of earnings before interest and taxes by 3.2%, and their annual revenue growth by 2.3%. Fortunately for retailers, 3PL providers like Mactrans are in the process of rolling out digital technology that allows for complete transparency along the supply chain, inviting a more informed shipping experience.
2020 looks to be an exciting year for retail, with ICSC forecasting retail sales growth of 3.7% this year. The only question that remains is this — can your supply chain handle it? If your business needs the help of dedicated transportation experts who can optimize, manage, and scale your supply chain, Mactrans can help.