Originally published at https://www.flexe.com/blog/the-year-of-the-supply-chain-9-retail-logistics-predictions
A lot happened in 2019: 9,100 stores closed, Amazon announced one-day shipping as the new standard for Prime members, tariffs disrupted operations, and Black Friday Cyber Monday presented the biggest online sales in history. 2020 shows no sign of slowing down for retailers and the supply chains that underpin their operations.
Neil Ackerman, Head of Advanced Technologies, Global Supply Chain at Johnson & Johnson, recently highlighted supply chain opportunities in a CXOtalk interview, “Where can we have the greatest efficiencies to improve the customer experience, to create a competitive advantage?”
It’s a great question to ask. A strong, flexible supply chain is the key to any successful retail operation.
In our latest whitepaper, 2020: 9 Retail & Logistics Predictions, find out where innovations will occur throughout the retail and supply chain industries. Are you ready for 2020?
Here are the top 9 predictions:
- Heavy/bulky delivery makes moves
- Delivery gets personal
- Stores make a comeback
- The ultimate move is your supply chain
- Disruptions are no longer disruptive
- Robots aren’t coming for your job
- Businesses get serious about sustainability
- Retailers recession-proof their strategies
- This is the year CPG’s go digital
1. Carry that weight: Retailers and brands figure out heavy bulky
From cars to couches to appliances—consumers trust eCommerce for just about anything now. Just about every product is fair game … including those big, hard-to-ship items. Retailers and brands must carry the weight of shipping larger products or risk losing those sales to competitors.
2020 prediction: Retailers will look at optimizing their distribution networks to better manage different product profiles; for example, fast-moving SKUs in one facility and non-sortable goods in another.
2. Delivery gets personal: Fast, free, and everything in between
So many retailers have focused on catching up with the speed of delivery that Amazon offers. Last year, Amazon even out-Amazoned itself by moving to one-day shipping.
But, speed isn’t everything. 65% of consumers research shipping costs before committing to a purchase, and the #1 reason online shopping carts are abandoned are because extra costs, like shipping, are too high.
2020 prediction: Retailers optimize their logistics networks for fast AND free shipping by testing new solutions that shorten the last mile of delivery and reduce shipping costs.
3. Bricks and clicks: Stores make a comeback
In 2019, more businesses were opening stores than closing them. In fact, for every company that closed stores, 3.7 companies opened them.
As buying behaviors change, retailers are rethinking the purpose of the store. They want to get goods both in front of customers and close to them, and many are using their retail footprint to showcase products and fulfill local online orders.
2020 prediction: Retailers and brands focus on transforming stores into experiences, able to support both in-store and online shopping
4. Checkmate: The ultimate move is your supply chain
With eCommerce, logistics is the cornerstone of success. Whether you’re supplying goods into a retail location or selling directly online, how you move goods has never been more critical. New logistics technology platforms are making it easier for businesses to innovate supply chain operations and create flexibility where there traditionally hasn’t been any.
2020 prediction: More companies will prioritize supply chain optimization, looking to new digital logistics platforms to improve flexibility and how goods are moved.
5. Go with the flow: Disruptions stop being disruptive
Supply chain disruptions happen. Tariffs, natural disasters, inclement weather, and a host of other unpredictable events can and will disrupt your operations. But in 2020, retailers will stop letting those disruptions derail their operations.
2020 prediction: Retailers and brands partner with modern logistics solutions to tackle (and mitigate) supply chain disruptions
6. Man + machine: Robots aren’t taking your job
Technology is revolutionizing how we live, work, and spend our time. And robotics, artificial intelligence (AI), and machine learning are going to have a huge impact on the types of jobs that exist … but not in 2020. History has taught us that innovation and new technology creates economic growth and new jobs to support technological advancements.
2020 prediction: Leaders will start to invest in new technologies, but understand how those changes will impact the workforce and what is required to bridge the skills gap.
7. Commerce with a conscience: Businesses get serious about sustainability
Sustainability is a loaded term. From environmental to social to economic sustainability, it is multifaceted, complex, and heady. But, it’s unignorable. This year, supply chain sustainability goes from nice-to-have to must-have as more retailers and brands build sustainable practices across their organization.
2020 prediction: The retail industry will focus on building sustainability into the supply chain—making their logistics networks and operations more efficient and effective to offset carbon emissions, keep their employees happy, and keep their doors open.
8. The road ahead: Retailers recession-proof their logistics strategies
It’s been more than 10 years since the last recession, but historically, the average length of time between crashes is nine. With economists predicting a U.S. recession in 2020, retailers and brands need to put plans in place to weather a potential economic downturn. This starts with their supply chains.
2020 prediction: Retailers and brands turn to flexible logistics solutions to manage assets in a downturn.
9. Finally: CPGs go digital
In our 2019 predictions, we thought that Consumer Packaged Goods (CPG) would start selling direct-to-consumer online. While there was some movement, there was not widespread adoption, but we think this is the year.
eCommerce is growing at a much faster pace than the rest of retail, and there’s increased pressure for CPGs to join the fray. In 2017, online sales accounted for 90% of the overall growth in the CPG sector, and in 2018, online CPG sales grew an additional 35%.
2020 prediction: CPGs crack the code for D2C fulfillment—assessing their logistics infrastructure and exploring distribution solutions that can scale to manage D2C fulfillment.