This evolution or ‘Omni-channel Retailing’ phenomenon has in turn had its impact on many supply chains. Here are 5 elements where you might see such an impact;
1) The rise of Omni-channel courier services: With more than 10% of retail sales now being transacted online the need for more flexible shipping options will become more prevalent. Companies are struggling to match customer expectations such as same day delivery, office drop off and after work hour’s delivery. Logistics specialists should become more widespread in the coming year to meet the demands of customer expectations. In conjunction with this will be the focus on internal operations as companies look for more proactive solutions, more accurate forecasting and procurement models.
2) Supply chain Omni-channel requirements hit the mid-market: Watch for more mid-market retailers to increase the complexity of their Omni-channel initiatives in the coming years, placing pressure on wholesalers and manufactures. The challenge for suppliers to these mid-market companies will involve making their supply chains more efficient as the speed to market increases to match customer demand. Retailers might also be looking for more direct to customer models as they strive to streamline delivery and reduce overheads to stay relevant in the market.
3) Supply chain software increasing insight: Increased market pressures have highlighted the need to be more resourceful and proactive. Enabling real-time decision making through reporting and analytics will be one of the keys to unlocking this. Many experts such as Gartner are saying that data is the new oil and with growing pressures to meet business outcomes, it’s vital to monitor the development of projects through KPI’s to get a true measure of an organisation’s performance outcomes. Supply chain operations should be focusing on software that provides more integrated real-time analytics throughout their solutions, turning transactional data into a real-time decision making. Mid-market software providers are realising this level of insight is critical for businesses and have begun integrating business intelligence (BI) tools within their offering where this was previously cost prohibitive for most companies to purchase separately.
4) Personalised supply chains: In an ever increasing customer driven market there’s a trend for supply chains to be more customer centric. Gene Tyndall of Tompkins International says "We will see massive changes of operations strategies - which determine capabilities, business and operating models, customer experiences, and supply chain strategies - not just by retailers, and consumer packaged goods (CPG) companies, but by all businesses”. The challenge moving forward will be to provide this level of personalisation while still remaining profitable. Customer service is expensive but needs to be balanced with infrastructure, process and technology.
5) Packaging evolution: With the onset of more free delivery expectation to remain competitive, look for more emphasis around packaging. In the US for example package engineering is now offered in universities where a new generation of graduates are focused on cutting edge innovations. Currently some multi-function package designs are being explored by fashion designers. For example Diesel, the denim clothing company have been creating pre-packaged clothing within the release cycle. These items can be shipped directly to customer, moved easily throughout the DC or even placed in store as attractive alternatives to traditional displays providing both form and function. Green initiatives will also evolve as manufacturer’s s continue to provide packaging that is focused on reusability, reduction and recyclability. According to Brian Wagner of Packing & Technology Integrated Solutions “Improved packaging designs can enable a company to reduce the amount of materials used, lowering costs and reducing the amount of material resources required”
As retail market and customer expectations evolve, so must our supply chains to remain competitive. This is centred on Omni-channel strategies that have been introduced to improve customer experiences. In turn supply chains will be focused on improving operational insights, proactive packaging methods and delivery innovations. The challenge is to not only stay abreast of these evolving trends but to remain efficient as they impact your supply chain.