10 August 2020
The British summer is often unpredictable, one week a blissful heatwave which drives consumers to the beaches and garden BBQ’s, the next a complete wash out. It seems nowadays we can’t be sure of anything! And there’s no better reflection of that than the UK weather; which in turn serves only to proliferate the uncertain marketplace retailers are currently facing.
Today, retail is under pressure from disruptive online brands in an ongoing, often painful period of evolution. Meeting consumer demands quickly, whether driven by weather or even changing in consumer spending due to a global pandemic (and who would’ve predicted that?) is central to success.
And this is where a flexible, well-positioned supply chain can add value and increase sales. Supply chains are often monstrous – formed of a huge number of component parts, from ports to warehouses, trucks to trains, customs to customers.
But collaboration and innovation in supply chains can help bring about greater agility and adaptability, ensuring that shop-shelves are stocked in line with demand, whatever the weather!
Maximising every opportunity is key
Success now depends on maximising every opportunity to secure competitive advantage. This used to mean optimizing business models to capitalise on regular peaks like Christmas and the January sales. However, as online has become more important, traditional retail business calendars have become less reliable.
Respond to consumer driven demand
These new peaks are consumer driven and, in most cases, legacy back office infrastructure retailers have in place is not setup to cope. Longstanding supply chain operations are often rigid and inefficient, making it difficult to adapt to change. Reacting to real-time events is particularly difficult.
Let’s take the first bout of good weather we had this year, May becoming the sunniest calendar month for the UK on record. Although in the midst of a national lockdown due to the Coronavirus, garden supplies, BBQ food and paddling pools were in consumers online baskets. Retailers that benefitted most were those that responded quickest to ensure they had sufficient stock of products that are typically in demand – despite it being early in the summer season. It’s easier for independent traders, of course. But facets of the supply chain, such as inventory management and fulfilment can help bigger retailers stock up at short notice too.
Place more importance on effective inventory management
This ability to dial up and dial down fulfilment doesn’t just help increase sales of items associated with heat waves and summer fun, it can be applied to many different product lines. But doing so consistently and quickly enough to respond to consumer trends requires retailers to drive more effective management of inventory across the supply chain.
One approach to this is considering the use of shared-user warehousing facilities, allowing storage capacity to scale up and down, as and when it’s needed. Take P&O Ferrymasters (POFM), who have just moved into a common user facility in London Gateway’s Logistics Park. POFM now have access to greater operational flexibility and capacity, meaning they can provide a more efficient supply chain to their customers as needed.
The logistics sector is beginning to recognise that modern warehousing solutions need to handle a range of products, from fresh perishable goods requiring refrigeration to clothing hanging on rails. This then requires the ability to cater different brands simultaneously, serving product demand often delivered via multiple business platforms.
This isn’t to say direct competitors, like Tesco and Sainsbury’s, would end up sharing one building. But there is scope for retailers and their respective logistics providers to pool resources. For instance, Tesco and Dixons Carphone, Sainsbury’s and Argos
Collaborate more closely
As omnichannel commerce becomes more common, it increasingly results in non-linear customer fulfilment challenges that traditional retailers have tended to struggle with. With store and staff numbers in decline, reinventing the backend to provide greater agility will be key. It requires closer collaboration between the retail and logistics sectors, with more flexible ways of working.
Sometimes it requires closer intra-departmental working too. Breaking down silos and planning longer term has potential to unlock significant savings while enhancing an organisation’s ability to react to unforeseen events.
So that’s a little food for thought as you settle into your sunbed this summer.
Working and innovating with supply chain partners can facilitate far greater agility and adaptability, to meet demand for products – whatever the weather.
For information on a warehouse facility at DP World London Gateway please contact us.