5 Retail Supply Chain Predictions for 2014

With 2013 now behind us and customer sentiment sitting at its highest for years, we look forward to 2014 and the key focus areas for retail supply chains.

Placing the customer at the centre of initiatives appears to be the overarching sentiment within the industry as consumer expectations are increasing given more purchasing channels and delivery options.

Here are five touch points where we should see evolution:

  1. The rise of omnichannel courier services: With more than 10% of retail sales now being transacted online the need for more flexible shipping options will become increasingly prevalent. Companies are struggling to match customer expectations such as same day delivery, office drop off and after work hours delivery. Logistics specialists should become more widespread in 2014 to meet this demand. In conjunction with this, will be the focus on internal operations as companies look for more proactive solutions. More accurate forecasting and procurement models will be required as the omnichannel platform continues to evolve.
  2. Supply chain omnichannel requirements hit the mid-market: Watch for more mid-market retailers to increase the complexity of their omnichannel initiatives in 2014, placing pressure on wholesalers and manufactures. The challenge for suppliers to these mid-market companies will involve making their supply chains efficient as the speed to market increases to match customer demand. Look for retailers to move towards 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 KPIs to get a true measure of an organisation’s performance outcomes. Look for more software providers, particularly ERP (Enterprise Resource Planning) to integrate real-time analytics throughout their solutions turning transactional data into a real-time decision making tool. This integration provides a level of insight that was previously cost prohibitive for most enterprises.
  4. Personalised supply chains: In an ever increasing customer driven market, look for supply chains to be more customer centric. Gene Tyndall of Tompkins International says in 2014 “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 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 expectations, there will be 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 has 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 manufacturers 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 market and customer expectations evolve so must supply chains to remain competitive. Focused omnichannel strategic initiatives, improving insight and proactive packaging innovation are just some of the touch points that continue to drive interest and innovation in 2014.

Where have you experienced changes in your business?

Stephen Duncan, Retail Product Manager for ERP vendor Pronto Software