Tracking Retail Supply Chain Trends During a Pandemic

    COVID-19 is causing massive disruptions in just about every supply chain, most specifically in retail. Recently, stores across the have started to open their doors again. How has the retail industry responded to the re-opening of the economy? And which supply chain trends can retail organizations expect to see moving forward?

    To get a better understanding of the recent retail supply chain trends, we sat down with Peter Edlund, Chief Solutions Evangelist at DiCentral and 25-year veteran of the retail space.   

    4 Retail Supply Chain Trends to Monitor

    How have shopping trends changed? 

    Peter: The most significant trend that we’ve seen during this period is a hyper-focus on eCommerce. While online shopping has been a staple for years at this point, the COVID-19 pandemic has made it a necessity that extends far beyond the usual convenience it offers.

    Another trend I’ve noticed is the lengths to which brick and mortar stores are going, and specifically the sales associates who work there, to make sure customers feel comfortable. Masks are being enforced (and sometimes even sold outside the door for consumers that don’t have one), and social distancing is being encouraged whenever and wherever it can be. Retail stores want things to return to normal just as much as we do, and they’re taking the steps to help facilitate a smooth reopening.

    Key Takeaways:

    •  Reliance and prioritization of online shopping has increased since March 2020.
    • Consumers are expressing their willingness to continue spending, as evidenced by the 74% rise in online shopping year over year.
    • The demand for brick and mortar stores is steady, and retail stores are taking the necessary precautions and operational steps to provide a comfortable shopping experience.

    Peter: For one thing, essential businesses—like grocery stores that remained open during the height of the pandemic—have spent a lot of time making sure they can be agile amid this crisis. They’ve taken precautions, adapted their business models, shifted their merchandising strategies as needed, and in some cases, even changed their entire business model.

    When it comes down to it, the most significant shift we’ve seen from retailers is direct-to-consumer orders. While the cost of filling these orders can be high, it’s a service to which consumers are responding exceptionally well. And as businesses keep learning how to be more efficient, we’re going to see this trend continue to increase even after the threat of COVID-19 has subsided. Essentially, the takeaways can be summed up as:

    Key Takeaways:

    • Retailers are brainstorming and launching agile sales strategies to keep revenue flowing.
    • Retailers are willing to reconfigure their business models to support their new revenue strategies.
    • The in-store experience is on hold (for now), but retailers are strategizing new and safer processes for in-store consumers.

    Tracking Retailers’ Responses to Consumers’ Expectations

    How does the supply chain spring back?

    Peter: Before the supply chain can start springing back, it’s a good idea to look back and examine what’s happened across supply chains over the last three months. With so much of North America’s goods originating and coming out of China, it was concerning to see our entire supply chain essentially freeze in place when the virus first came to light.

    While the supply chain for essential goods (i.e., groceries), non-essential businesses still have a way to go. Consumers are spending less money on non-essentials right now, which has contributed to the economic slowdown. However, it’s not hard to see a large percentage of the country using its stimulus check(s) to purchase non-essential goods, which could go a long way toward jump starting the economy.

    With the country now in various stages, many retailers are struggling with demand issues. Many retail organizations are focusing on remerchandising and figuring out how to deal with store inventory by either recycling through markdowns or moving it off to third parties as a liquidation.

    The next trend will emphasize the improvement in collaboration across the supply chain. Not only does collaboration increase supplier visibility, but it’s also a necessary step to make for smoother consumer experiences.

     Key Takeaways:

    • As a result of the supply chain disruption COVID caused, many industries are reexamining their reliance on China.
    • Retail organizations are focusing their efforts on remerchandising and recycling product inventory via markdowns and liquidation.
    • Stimulus checks should help kick start the economy, enabling the manufacturers to start catching up to market demands.

    Can retailers do more with less? 

    Peter: Even before the pandemic, businesses would hear the phrase “do more with less” all the time. Now that we’re dealing with a genuine crisis (and the extenuating circumstances that come with it), companies have been forced to do more with less.

    Most notably, we’re seeing retail organizations refocus efforts on improving operational efficiency and moving them up into production. In normal circumstances, these projects would probably still be in an “incubation period” and be undergoing tests for further optimization. But in the wake of COVID, the launch of these “incubation projects” have been accelerated.

    “Failing fast” must become the new normal. There is very little risk at this point, so organizations that can improve supply chain operational efficiency or discover new revenue-generating projects should accelerate these ideas into action. 

    We may not have hard data on these ideas yet, but you’ll still be able to determine fairly quickly whether it’s going to be a success or not. That’s the idea of “fail fast,” and it’s one we’re starting to see embraced by more retail organizations.

    Key Takeaways:

    • Retail organizations should employ the “fail fast” methodology to accelerate projects for supply chain operational efficiency and revenue-generating projects.

    What’s Next?

    Peter: We’re living in unprecedented times, and regardless of the supply chain trends, people should be willing to innovate and start looking to their test-beds as sources of inspiration. This has been a testament to the resilience of society and the supply chains that support it.

    The retail industry has truly embraced the idea of doing “more with less,” and the agility we’ve seen is indicative that the industry as a whole is committed to coming out of this crisis in a positive place.

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