What was the most significant trend to impact the retail supply chain in 2016?
The most significant trend in 2016 was the continued shift of volume from brick and mortar to e-commerce. This issue is here to stay and we need to continue to help design and support flexible solutions for our customers. In our March blog we spoke about how brick and mortar stores were evolving and the shift to e-commerce was accelerating. The 2016 holiday shopping season was further proof as the growth of e-commerce during the holidays keeps outpacing growth in stores as online sales increased 13% vs. 2015. While Amazon is a large part of this, our customers are seeing incredible growth themselves and Performance Team is committed to working with our partners as they to continue to navigate this impactful trend.
What will be the key supply chain trends impacting retail in 2017?
More of the same! You’ll continue to hear more about the “digital economy” which encompasses the Internet of Things (IoT) and the sensor data that can be leveraged by products and applications. As the B2B aspect of this expands, you’ll begin to see this information used to further streamline and improve customer service in distribution and transportation, just as Uber has impacted the taxi business in a similar way. Same-day fulfillment will continue to grow into a standard expectation for consumers. Retailers that can accurately deliver goods to an end consumer faster than their competitors will stay ahead of the curve.
What is PT doing to help its customers succeed in the coming year?
Performance Team will continue to focus on solid and consistent execution for 2017 while supporting our customers’ needs to remain flexible in a fast changing environment. We continue to innovate and invest in our people, processes and technology to ensure our retail customers have the best supply chain solutions in the marketplace.
No, it’s not a new super hero movie or this season’s hottest toy, but rather what industry insiders are calling the busy online shopping period after Thanksgiving when shoppers can expect to find the best deals from their favorite retailers. More specifically, Cyber Five is the week-long shopping holiday defined as the five consecutive days from Thanksgiving through Cyber Monday which includes Black Friday, Small Business Saturday and Super Sunday.
The combination of growing online sales as well as mobile friendly shopping sites means that consumers no longer need to wake-up at the crack of dawn on Black Friday to wait in line for that uber cheap 46” LCD TV, but instead can order from the comfort of their home using their iPhone and still take advantage of great deals not just on one or two specific days, but throughout the entire weekend and up until Cyber Monday. Some online retailers offer the same deals all five days, while others are constantly changing their offering to keep consumers coming back to see what’s new. It’s from this extended holiday shopping phenomenon that the Cyber Five was born.
Let’s examine some statistics behind the Cyber Five:
- Black Friday 2016 broke the prior online sales record with $3.34 billion in sales, 21.6% growth over 2015. In addition, Black Friday became the first day in retail history to drive over one billion dollars in mobile revenue at $1.2 billion, which was 33% growth over the prior year. The past two years, Black Friday mobile sales have outpaced Cyber Monday which underscores the importance of mobile.
- Almost 109 million people shopped from their computers and mobile devices from Thanksgiving through Sunday, while 99 million people visited brick-and-mortar stores. That’s compared to 2015, when shoppers were more evenly split (103 million online vs. 102 million in stores).
- Mobile phones and tablet devices accounted for 57% of visits to retailers online stores and 40% of all sales. Smartphones drove twice as many sales as tablets, at 27% and 13%, respectively.
- Amazon stated that mobile orders on Thanksgiving Day topped Cyber Monday last year, while Walmart said that over 70% of its Thanksgiving online traffic was mobile. Target saw 60% of Thanksgiving sales from mobile devices.
The online growth trend continues and mobile is playing an increasingly important role. As recent results demonstrate, spending more time with family over the Thanksgiving weekend while keeping a close eye on your smartphone is quickly become the new shopping norm. How did you shop during the Cyber Five this year? Share your experiences in the comments section below.
The robots are coming! The robots are coming! We aren’t talking about Robocop or even the loveable “Wall-E”. These new-age robots are headed directly to the warehouse. There has been subtle usage of robots in the warehouse for years, but Amazon’s purchase of Kiva set the stage for the current landscape of robotics within the warehouse.
There are a number of advantages to warehouse robots:
- Robots have the capability to work 24×7 without a break.
- The maintenance cost is relatively low, particularly in the first few years.
- They move at about the same pace as a human walking at a fast pace.
- They are incredibly accurate when programmed correctly.
- And, they can boost warehouse productivity by up to 800%.
Additionally, across the country minimum wages continue to rise and robots have the potential to deliver a more stable labor cost vs. the traditional work force. During the holiday season, retailers and 3PLs alike can be challenged to meet increased demand and associated staffing levels. Robots can help warehouses better meet these requirements while at the same time eliminating the cost associated with interviewing, hiring, and training new staff. Robots also allow current employees to focus on the most important responsibilities of their job, thereby increasing productivity and efficiency. The days of warehouse workers walking 12 – 16 miles per day during an eight hour shift are fading.
Of course robots aren’t cheap, but they’re much less expensive than most people would think. Typical warehouse robots that can transport products throughout the warehouse generally cost between $25k – $80k, plus the software to manage them, programming, and maintenance. But even at those prices, the cost per hour is drastically less meaning it’s not a question of if, but rather when will we start to see robots in warehouses across the country.
Are you using robots today? What will it take for you to make the leap? Leave your thoughts and feedback in the comments section. And thanks for reading!
Have you noticed that the stores of your youth are slowly disappearing? The growing trend of brick and mortar stores fading away into oblivion is real. However, the better question that needs asking is: “Are these stores closing permanently or will they continue to exist but in a different form?”
Retailers have an opportunity to evolve the store to better match the purchase behaviors of the much sought after millennials, consumers between the ages of 20 and 35. As the millennials and to a large extent, the general public seek “experiences” over “things”, brick and mortar retailers are struggling to stay relevant. Six in 10 Millennials would rather spend money on experiences than material things according to a survey
completed by MMGY Global. This growing trend has had an impact on traditional retail stores as evidenced by recent store closures announced by Macy’s
, Sports Authority
, Sears, and even Wal-Mart. At Macy’s, in-store traffic the last two months of 2015 dropped 6.4% and all store traffic declined by an average of 9% during the holidays.