Retail Supply Chain Trends to Watch in 2016
It’s our first ever blog post and we wanted to share our thoughts on the upcoming year and some of the key trends we believe will impact the retail supply chain in 2016. We are already seeing these trends impact our customers and know they will have a broader and more significant impact within the retail supply chain space in the coming year.
- Order Online/Pick-up from Store – It is predicted that the percentage of consumers that expect to order online and pick-up from the store will rise to well above 50% during 2016. Every week we continue to see various types of brick and mortar stores add this service to their list of delivery options. The next step in this process is curbside delivery of an online order which Nordstrom has been piloting for the past eight months.
- Omni-Channel Inventory – Today’s consumer is expecting an unprecedented level of integration across a retailer’s various channels. Retailers must have accurate inventory visibility across the supply chain to truly enable an effective omni-channel experience. Consumers want to be able to pick-up their order in a store or request same day in-home delivery, and of course return it to any location. Is it possible to manage all product supply and returns seamlessly from one physical, if not virtual inventory? We’re seeing our customers do just that and with significant success. And studies show that omni-channel consumers have more than 30% higher lifetime value, than those that shop via a single channel.
- Free Delivery/Optimized Packaging – Consumers’ expectation of free delivery is complicated for retailers by a relatively new method of pricing known as dimensional weight. Parcel carriers are now pricing a package not based on its actual weight, but rather based on its overall dimensions. We’re leveraging our expertise to help our customers better manage this change and in some cases we have deployed on-demand packaging which ensures every product ships in the smallest box possible.
- Same Day Fulfillment – The shift from next day to same day fulfillment is happening now. When consumers can buy the same product at multiple online stores, getting the product delivered faster than the next guy is oftentimes the only way to win the sale. To make this happen retailers are shipping from their existing distribution centers, but increasingly we’re seeing more retailers ship product from their stores. This is a pragmatic way to repurpose underutilized brick and mortar space and reduce overall shipping costs. Accurate inventory visibility and a strong logistics function are critical to making same day deliveries happen.
- Leveraging Industry Experts – The above trends have driven many of our customers to rethink how they execute their supply chain. Many customers started out fulfilling their small on-line business in-house, but as the volume and complexity grew they realized they needed a trusted supply chain partner who was truly an expert in this area and could scale and flex with the rapid changes in their business. Third-party logistics providers like Performance Team bring robust systems, advanced processes, and flexible labor strategies which can deliver a significant ROI for retailers and wholesalers alike.