February 8, 2019
Column | outbound

Can it get any hotter?

Retail remains a white-hot sector in logistics, and it's still heating up.

By Mitch Mac Donald

If you are a supply chain wonk (and if you're reading this, you either are or you have some very odd pleasure-reading habits), you didn't have to go to the National Retail Federation's (NRF) annual "Big Show" in New York last month to know that retail logistics is absolutely white-hot right now.

Similarly, you don't have to travel to the Retail Industry Leaders Association's (RILA) annual Retail Supply Chain Conference later this month to know that some of the most amazing advances in logistics are coming from retailers that are scrambling to remain relevant (and, oh yeah, profitable) in a rapidly changing marketplace.

No, you didn't have to attend either event, but if you work in retail and your job involves logistics, you probably should have. (In fact, based on when you're reading this, you may still have time to get to RILA's conference, which takes place in Orlando, Fla., Feb. 24-27.)

Both events confirm conclusively what we already know: The buzz today is all about retail logistics.

At NRF's Big Show, logistics and supply chain solutions took the spotlight in what is, after all, not a logistics-specific show. Retailers today realize that without the help of enabling supply chain and logistics tools and technology, the game is lost. Exhibits featuring technology-driven supply chain and logistics solutions were what the NRF show attendees wanted to see. Or perhaps we should say, needed to see.

They needed to see them because many retailers have far more questions than answers. Perhaps not surprisingly given the economic climate, a lot of those questions center on how they can get the most bang for their technology buck. "In a tighter economy, retailers will have to make tough decisions on whether to focus their technology investments on the front end of their business with new experiences like self-checkout, or on updating their supply chain and distribution channels," says Jon Reily, vice president of commerce strategy at digital transformation consultancy Publicis.Sapient.

NRF Big Show speaker Ara Gopal, senior director of consumer products and retail at connected business platform provider Anaplan, touched on that same theme in his remarks. Gopal argued that when retailers invest in digital upgrades, they tend to focus on areas like customer engagement and marketing. But they might benefit from taking a broader view, he said. "Technology can have a powerful impact on improving the accuracy of forecasts and enabling integrated business planning across all lines of a retailer's business," he noted, adding that digital tools "can help retailers understand the financial impacts of tradeoffs and enable advanced decision-making in their planning processes."

Show-goer Tim Hinkley, chief commercial officer for Radial, a provider of omnichannel commerce technologies and solutions, is likewise bullish on logistics-related technologies, noting that digital tools can help retailers deliver (or even over-deliver) on the customer's expectations—a critical factor in e-commerce success.

"While there is a lot of exciting innovation taking place in e-commerce today, some of the most impactful efforts are taking place behind the scenes," Hinckley said in a statement announcing the results of a new Radial study, Cracking the code: What online shoppers value most. "Our data shows that consumers place the most value on inexpensive shipping and easy returns. Brands that focus their resources on delivering these seemingly obvious but often overlooked or challenging-to-execute aspects of the consumer journey are the ones who will stand out from the pack."

The challenge for retailers in 2019, then, won't be deciding whether or not to digitize their operations. That question is already settled. The challenge will be deciding where and in what to invest.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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