- December 11, 2015
- 3:17 pm
- John Caltagirone
- no comments
The Future of Retail Shopping and the Supply Chain
I have “celebrated” five Black Friday’s and since my first in 2010. On the first one, I woke up at 3 am to go to a shopping mall and wait in line for about 2 hours whereas this year I spent Black Friday shopping online from comfort of my own couch. So it is no surprise that e-commerce and the omni-channel fulfillment is driving a change in the shopping mall business. But these aren’t the only factors that are forcing retail supply chains to change.
In “The Demise of Malls and Traditional Distribution” it states there is an evident decrease in the purpose of shopping malls with a growing trend of ecommerce. According to CoStar Group, a commercial real estate company, vacancy in malls is greater than 40%, forecasting the closure of a retail spaces in the future. Additionally, the investment from distribution facilities retailers and 3PLs has increased. It indicates that the traditional distribution network that once existed in which large centers would deliver products to retailer stores is being replaced by third-party logistics, who are redesigning and re-establishing quicker and more efficient networks to provide customers there items without even having to leave their homes. According to Prologis, an industrial real estate firm, almost 3 times as much space is being put into ecommerce business as to the traditional network.
Moving forward the supply chain needs to make a specific adjustments to adapt to the change in service. For one, the retailer must take a role in leading the entire supply chain and try to understand what the needs of the customers are and what services within their business need to be prioritized. Moreover retailers will need to see their supply chain as a whole, being able to see what is available, at what level, at any time, and on which routes. This will allow for customers to also benefit from the cheapest and fastest option.
It is important to also note the industries that not all industries have completely been successful or dominate the online space. Electronics and books/music have overwhelmingly become online while the grocery industry and beauty products still have a large space in physical retail spaces. People are looking for convenience and with companies like Peapod and AmazonFresh emerging strong in urban settings, it won’t be long where grocery and beauty products will be going online.
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