Holiday 2020: An interview with RILA’s Jessica Dankert
The retail sector was among the hardest hit by the Covid-19 pandemic. Now, retailers are scrambling to salvage the holiday shopping season amid strange and uncertain times.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
This year, we’ll likely see a holiday shopping season like no other before it. And hopefully, we’ll never see one like it again. As we all know by now, the Covid-19 pandemic has upended the retail landscape. A number of major retailers have closed their doors forever, unable to withstand the one-two punch of mandated store closures and the e-tail tsunami. But others, particularly those that had already mastered the e-tail game, have thrived. Meanwhile, many have done an admirable job of changing up their business models in the blink of an eye.
Jessica Dankert has had a front-row seat to the action. She is vice president of supply chain for the Retail Industry Leaders Association (RILA), a trade association of U.S. merchants. It probably goes without saying that these days, Dankert and her colleagues are focused on helping RILA’s member companies navigate the uncharted waters of 2020 and beyond.
Dankert recently spoke to DC Velocity Editorial Director David Maloney about the current state of retail, what retailers expect for this unusual holiday season, and how the in-store experience is likely to change.
Q: Between the mandated store closures and subsequent operating restrictions, the Covid-19 pandemic has seriously disrupted retail operations. How would you describe the current state of the industry?
A: It has been a very interesting past handful of months, but I think retail generally is really quite strong. Most companies have reopened, and we’ve seen sharp spikes in e-commerce sales as homebound consumers shifted to online buying. I think it has been impressive to see how retailers have been able to pivot so quickly and respond to the needs of the consumer in this new era of doing business.
Q: We’ve seen several major retailers file for bankruptcy or shut down altogether. Were those companies that were already struggling or were their problems brought on by the pandemic?
A: I think having mandated closures has not been helpful—and not just for retailers, but also for the restaurant, hospitality, and entertainment sectors. It has been challenging. You see a lot of retailers examining and adjusting their models in order to respond to the new realities and, in many cases, coming back stronger.
Q: Are there common denominators among those companies that will succeed in this environment versus those that are at risk?
A: I think the supply chain is key to the retail organization. Certainly, the companies that designed their supply chains from the outset to be flexible and responsive have done well and survived the first part of the pandemic. But it has been a learning experience.
We’ve seen a lot of examples of supply chains that have really risen to the occasion in order to keep goods moving. We’ve witnessed their ability to pivot and meet entirely new needs, such as offering curbside pickup or ship-from-store service for retailers who weren’t already doing that. The speed at which retailers and their supply chains were able to adapt their operations to the new realities has been very exciting to see.
Q: How critical is information to these efforts? Will this push more retailers to digitize their supply chains?
A: The experience of retailers in the past couple of months has underlined the importance of visibility, which has been underpinned by digitization and a lot of the technologies that help provide that visibility. We need to accelerate that process and really get to a point where it’s enabling the kind of flexible supply chains you need in times of disruption.
Q: Are retailers moving to automated systems, especially if they’re filling fewer store-replenishment orders and more small orders for individual customers?
A: I think automation has definitely been on the table, and we continually talk about it with members. I don’t know that [the surge in e-commerce] has necessarily accelerated the shift. It just changes the conversation a bit and adds more data to that discussion. So much of what retailers do is data-driven—they’re constantly looking at the data to see what trends are taking shape that they’ll need to respond to and plan for. At the end of the day, it’s all about flexibility—the flexibility to respond to a pandemic or another type of disruption or consumer trend. So to the extent that automation can enhance flexibility and an operation’s ability to respond to whatever challenge crops up next, it could be another valuable tool in the retail toolbox.
Q: Are larger retailers faring better than smaller retailers?
A: I don’t think it’s necessarily a question of size. It really depends on the retailer itself and how well it was prepared for disruption—specifically with respect to its ability to make quick changes and quick decisions all in the name of meeting customer needs. It is really more around the organizational culture and whether or not company leaders have set up an organization, and by extension, a supply chain, that’s able to react and respond in times of upheaval.
Q: How key is that supply chain to their success?
A: It is certainly a big driver, but not the only driver. Supply chain is what’s behind the scenes making it happen and is obviously critical to serving the customer. What we’re seeing across many organizations are supply chains that over the past decade or so have grown increasingly important and have adopted a more strategic and customer-facing role. While [retail success] is really much more about the total experience a customer has, a good supply chain is certainly a key ingredient of successful retail, especially in the age of e-commerce.
Q: During the shutdowns, many people tried online grocery shopping for the first time and started ordering items they formerly bought in stores from e-commerce sites. Has this become the new norm, and are brick-and-mortar stores going to have to change their role?
A: That is a huge question that everybody is looking at: How “sticky” are these e-commerce sales trends? How long does this pattern play out? Is this a long-term shift? How much of that business will revert to stores as economies open up?
In many ways, the surge in e-commerce is just an acceleration of a trend that retailers had long been aware of and were planning for. They were already looking at the brick-and-mortar in-person experience and how that and the e-commerce experience can complement each other. What can you do differently with the brick-and-mortar setting to make it more relevant and enrich the customer’s experience? The e-commerce explosion is going to move things along a little bit, but I think retailers have been giving a lot of thought to that topic for some time now.
Q: How are retailers envisioning this holiday season? Do they think it will be a typical shopping season with respect to the time frame?
A: I don’t think anything about 2020 will be typical, including the holiday shopping season. In a traditional year, peak season starts around Thanksgiving, which helps guide all the forecasting, sales, and planning activity that goes into retailers’ preparations. All of those things will be different this year. As for timing, it will depend a lot on the economy and what is done at the federal and state government levels, the impacts there.
While it will definitely be an atypical holiday season, I do think that people are still going to be shopping. People are always going to need to buy things and shop for holiday gifts.
Q: Container shipments and overall import volumes are down. Does that mean retailers are “leaning” their inventories, and will we see shortages in some product categories as a result?
A: Retailers are continually evaluating what they’re doing with their inventory and what makes sense going forward, given the constant shifts in consumers’ purchasing patterns. The answer will be different for different retailers and for different products. I don’t think we’ll necessarily see across-the-board reductions in inventory, but I do think retailers are giving a good deal of thought to where they’re positioning their stock and what that means from a customer standpoint.
Q: Do you see more shipments coming directly from stores this year?
A: Definitely. We are seeing more retailers either launching ship-from-store programs or expanding their existing ship-from-store footprint. Ship-from-store makes a lot of sense in terms of being closer to the customer and being able to be more responsive. It’s essentially another tool in the retailer’s toolbox.
Q: While customers have been somewhat more understanding during the pandemic, they haven’t necessarily lowered their expectations for speedy delivery. Is that going to present a challenge during peak season, and are retailers looking at other delivery modes, such as crowdsourcing, to meet those expectations?
A: Parcel shipping at peak has frequently been a challenge during holiday seasons, so it is something they plan for. And they’re always looking at different delivery methods, whether it’s crowdsourcing, working with third parties, or other nontraditional ways to handle that last mile. You see a lot of new players in the space trying to help retailers solve their delivery challenges and a lot of retailers trying new tactics. I think the result will be a lot of options for the customer, as opposed to a one-size-fits-all solution.
Q: Bottom line, how are retailers looking at the upcoming peak holiday season? It’s going to be very different from anything we’ve ever experienced.
A: Yes, it is going to be a nontraditional, atypical rest of 2020. But based on what I’ve heard from members I’ve spoken with, retailers are very optimistic. Retailers have been buoyed by the experiences they’ve had with customers over the last several months and the success of their efforts to meet customers’ changing needs. The customers have responded to that. I think it has really just underscored the importance of retail in this country.
Q: Is there anything you wish to add?
A: Yes. Everyone, please wear your masks when you shop. It is important to keep retail workers safe. It is important to keep our communities safe. Please wear your masks.
Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.
That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.
To solve those problems, chief supply chain officers (CSCOs) deploying GenAI need to shift from a sole focus on efficiency to a strategy that incorporates full organizational productivity. This strategy must better incorporate frontline workers, assuage growing employee anxieties from the use of GenAI tools, and focus on use-cases that promote creativity and innovation, rather than only on saving time.
"Early GenAI deployments within supply chain reveal a productivity paradox," Sam Berndt, Senior Director in Gartner’s Supply Chain practice, said in the report. "While its use has enhanced individual productivity for desk-based roles, these gains are not cascading through the rest of the function and are actually making the overall working environment worse for many employees. CSCOs need to retool their deployment strategies to address these negative outcomes.”
As part of the research, Gartner surveyed 265 global respondents in August 2024 to assess the impact of GenAI in supply chain organizations. In addition to the survey, Gartner conducted 75 qualitative interviews with supply chain leaders to gain deeper insights into the deployment and impact of GenAI on productivity, ROI, and employee experience, focusing on both desk-based and frontline workers.
Gartner’s data showed an increase in productivity from GenAI for desk-based workers, with GenAI tools saving 4.11 hours of time weekly for these employees. The time saved also correlated to increased output and higher quality work. However, these gains decreased when assessing team-level productivity. The amount of time saved declined to 1.5 hours per team member weekly, and there was no correlation to either improved output or higher quality of work.
Additional negative organizational impacts of GenAI deployments include:
Frontline workers have failed to make similar productivity gains as their desk-based counterparts, despite recording a similar amount of time savings from the use of GenAI tools.
Employees report higher levels of anxiety as they are exposed to a growing number of GenAI tools at work, with the average supply chain employee now utilizing 3.6 GenAI tools on average.
Higher anxiety among employees correlates to lower levels of overall productivity.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Berndt. “Rather than introducing even more GenAI tools into the work environment, CSCOs need to reexamine their overall strategy.”
According to Gartner, three ways to better boost organizational productivity through GenAI are: find creativity-based GenAI use cases to unlock benefits beyond mere time savings; train employees how to make use of the time they are saving from the use GenAI tools; and shift the focus from measuring automation to measuring innovation.
According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.
The two acquisitions follow Arvato’s purchase three months ago of ATC Computer Transport & Logistics, an Irish firm that specializes in high-security transport and technical services in the data center industry. Following the latest deals, Arvato will have a total U.S. network of 16 warehouses with about seven million square feet of space.
Terms of the deal were not disclosed.
Carbel is a Florida-based 3PL with a strong focus on fashion and retail. It offers custom warehousing, distribution, storage, and transportation services, operating out of six facilities in the U.S., with a footprint of 1.6 million square feet of warehouse space in Florida (2), Pennsylvania (2), California, and New York.
Florida-based United Customs Services offers import and export solutions, specializing in remote location filing across the U.S., customs clearance, and trade compliance. CTPAT-certified since 2007, United Customs Services says it is known for simplifying global trade processes that help streamline operations for clients in international markets.
“With deep expertise in retail and apparel logistics services, Carbel and United Customs Services are the perfect partners to strengthen our ability to provide even more tailored solutions to our clients. Our combined knowledge and our joint commitment to excellence will drive our growth within the US and open new opportunities,” Arvato CEO Frank Schirrmeister said in a release.
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.
The announcement came two weeks after autonomous truck developer Kodiak Robotics said it had become the first company in the industry to launch commercial driverless trucking operations. That milestone came as oil company Atlas Energy Solutions Inc. used two RoboTrucks—which are semi-trucks equipped with the Kodiak Driver self-driving system—to deliver 100 loads of fracking material on routes in the Permian Basin in West Texas and Eastern New Mexico.
Atlas now intends to scale up its RoboTruck deployment “considerably” over the course of 2025, with multiple RoboTruck deployments expected throughout the year. In support of that, Kodiak has established a 12-person office in Odessa, Texas, that is projected to grow to approximately 20 people by the end of Q1 2025.
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”