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Three experts give their opinion on the future of retail supply chains

Posted by Len Simmons on Apr 11, 2017 11:00:00 AM

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The retail supply chain is evolving rapidly. The internet has arguably been the biggest change in the industry with over £133 billion now spent online – a 16% increase on the previous year.

This remarkable level of spend has meant the supply chain of traditional retail companies has had to fundamentally change in order to meet the demands and behaviours of consumers.

In response, the industry embraced an ‘omnichannel’ strategy – an approach to align and integrate all sales channels within the same transactional and logistical infrastructure. But what else should retail FMs prepare for in their retail supply chain?

We’ve gathered the opinions of three experts on how the future of retail supply chain is set to change by 2020.

Sarwant Singh

Sarwant Singh is Senior Partner at market research company Frost & Sullivan and specialises in mega trends and the future of mobility. In his Forbes article in 2016, Sarwant gave his opinion on how technology, in particular, will change the supply chain industry.

From unmanned mobile robots in warehouses to drones for online fulfilment, the current supply chain is undergoing a major transformation. With the possibilities in artificial intelligence, the future supply chain holds the promise of being completely autonomous and self-orchestrated.

The supply chain of tomorrow will be leaner, faster and most importantly, self-orchestrated. This unprecedented pace of change will be driven by a few radical technologies that will be cautiously adopted by industry participants over the next 15 years. Here is a view of the top five Frost & Sullivan has identified from its comprehensive analysis on the Future of Logistics:

  • Autonomous fleets will bring greater efficiency
  • Data will replace fuel as the biggest influencer
  • New breed of technology players will be less asset-centric
  • The emergence of e-brokerage platforms
  • Smart commerce with Blockchain

 

Christian Davies

Executive Creative Director at FITCH Design, Christian Davies, introduced an extensive report back in 2015 that outlined his opinion on the way retail will change as we approach the year 2020. While the report focussed on the retail trends that are being pushed by consumers, it sheds light on how these changes will affect retail supply chains as a result.

Retail will change more in the next five years than the last 50. This change is not just driven by economic, product or industry trends. Rather, tomorrow’s store is being shaped by new behaviours, needs and demands of shoppers.

By 2020, generation X will be enjoying the fruits of their peak-earnings decade of their careers. Millennials will no longer be the kids in your store. In fact, they are more likely to be shopping for their kids. Retail today is “under-delivering” against millennials’ expectations and success at retail in 2020 will only be achieved by embracing this somewhat challenging idea. We see six trends for retail’s future:

  • Retail’s role in society will change significantly by 2020
  • Physical stores in 2020 will take many forms
  • The ways in which we speak to shoppers will shift dramatically
  • Seamless will be an absolute must
  • By 2020 the entire concept of convenience and value will shift
  • Experience will remain king

 

Kantar Retail and PwC

Following their joint report two years ago, Retailing 2015, researchers at Kantar Retail and PwC unveiled their new report in 2016 Winning in a polarized world. In the report, they looked into the infrastructure and logistical changes that retail supply chains need to prepare for.

Based upon updated research and the combined views of our retail industry professionals, we believe successful retailers of 2020 will be those most likely to properly position themselves to master the highly dynamic marketplace in which they operate, a marketplace that will likely be increasingly polarized. The polarization of 2020 is expected to manifest itself in a variety of ways:

  • Channel fragmentation. The retail landscape is expected to experience a significant increase in non-store retail. Successful brick-and-mortar formats will look markedly different from one another.
  • Growth of recession-trained and fixed-income shoppers. These groups, regardless of wealth, are expected to pursue increasingly polarized shopping decision processes. For categories these shoppers care deeply about, we expect a rise in premium products that are tailored to their specific needs.
  • Smaller footprints. The retail environment of the future will see retailers increasingly opening smaller stores to generate new growth as already seen in several urban markets. The online world will capture an increasing share of planned shopping trips, leaving brick and mortar retailers to capitalize on immediate, or impulse, needs.

 

More retail supply chain trends

A report, created by the UK’s leading retail supply chain compliance specialist, Altius, is now available to download. The report, Retail 2020: A future insight of trends that will affect facility and property management, features other key retail trends that are set to affect supply chain professionals across the UK and beyond.

To read more from key retail researchers on the state of the industry in 2020, download our free report today.

How will change in the retail industry affect you in 2020? Download report

Topics: Retail