Retail Supply Chain Transformation

At the same time that the retail marketplace is the midst of a transformation, the retail supply is also experiencing a transformation that is in part at least driven by the retail marketplace demands.  The consumer delivery demands and fluid store replenishment demands fall squarely on the supply chain. These changes are not going to diminish and will only increase and build on each other to continue the transformation.  As with the retail market, the supply chain transformation is built upon a series of continuous changes based on the demands of consumers and the supply chain made possible with new applications of technology. These factors are driving supply chain partners to use technology to deliver new services to simplify the end consumer delivery and in so doing are themselves driving increased traffic to the omni market retail marketplace.

Parcel carriers and retailers, especially Amazon, are focused on simplification of delivery services to the end consumer to improve the consumer experience in the online shopping and purchasing practices.  These new services such as advanced delivery notification and scheduling available from the parcel carriers allows consumers to better plan their delivery which increases satisfaction while reducing the chances of theft at the same time.  Amazon has revolutionized the online purchasing and delivery experience with their Prime membership. The Amazon Prime member benefits has revolutionized the online shopping and purchasing experience by allowing and encouraging consumers to purchase on demand based on the immediate need without incurring a delivery charge.  This allows consumers to for instance run out of Kleenex and simply click on Amazon to order and have their supply replenished. This encourages consumer shopping and purchasing as the desire arise and where the desire arises to shift the purchasing from the retailer hours, if you will, to the consumer hours when they realize the need.

Technology plays an important role in these advances and the supply chain is still in the early stages of this transformation and still experimenting with the technology and data to identify and implement service improvements and cost reductions.  One example of a service improvement that also deliveries cost efficiencies is the automated drop point that Amazon and UPS have started. These drop points are automated lockers that allow the delivery to be dropped by the driver in the event you can’t sign for the delivery and then consumer can pick up the package, at their convenience, using the tracking number and a form of ID.  If there are any difficulties with the pickup the consumer can also use the pickup kiosk to speak to a phone rep who can address the issue and open the locker remotely.

The supply chain will see a dramatic changes through mobile, wireless, IoT and Blockchain technologies and combination of all these technologies through experimentation to improve services and efficiencies.  The supply chain and extended partners must increase collaboration and engagement across the supply chain in order to sense the direction and demands of both the consumer and the supply chain to understand and determine methods to meet the demands and reshape the supply chain.  This will be made up of a series of small changes that can be combined and put together in ways that may not be foreseen today. The trick though is the supply chain partners must focus on engagement and responding to the changing demands as they arise rather than waiting for the demand to overwhelm them.