Rethinking retail & distribution
What seemed to begin with BHS and more recently Toys R us has quickly been followed by a whole series of other “bricks & mortar” retailers across a wide range of sectors falling on hard times.
The list is extensive however when the likes of Marks & Spencer’s, House of Fraser, Mothercare and others are planning massive numbers of store closures it’s a trend that cannot be ignored. The sheer number of CVA’s (company voluntary arrangement) within retail is staggering and clearly indicates that retailers are having to radically rethink their strategies.
There is hardly any good news coming out of retailing at present even discounters such as Poundworld are in serious trouble putting a threat over 330 plus stores and the livelihood of over 5000 workers Quite apart from the human cost some high streets and shopping centres will be nervous about their futures as the consumer increasingly turns to using online shopping.
It’s easy to forget the dramatic effect of store closures will also have on the supply chain. Logistic players will suffer as they try and understand the type of vehicles customers will need in the future. Less stores to deliver to, more central drops and perhaps smaller vehicles will be required for more home deliveries? This is in the face of the already difficult task of integrating alternative fuel vehicles into their fleets.
Against all these changes Amazon now employ of 27,500 people and recruiting more, it appears that in the clicks vs. bricks battle, its clicks that’s winning and retailers need to embrace that as they refine strategies for the future.
It would be no surprise to see key players reduce costs but look to acquire volume or look for mergers as in the case of Sainsbury & Asda but one thing is for certain any strategy will demand an improved online performance. It will be vital to understand how artificial intelligence will drive consumer behaviour and how technology can be used to achieve greater efficiencies.
The c-store and forecourt market also needs to find different solutions not only in retail format and proposition but also in making sure that their supply chain is fit for purpose.
Published in the July edition of F&CS Decision Maker