Many businesses begin with single-channel distribution. That sole channel could be a brick-and-mortar store or an e-commerce website. In either case, all sales flow through one outlet.
The advantage of a single-channel distribution management system is simplicity. There’s only one channel to manage, one channel to stock, and one channel to market to customers. As a business expands, however, the single-channel model can limit growth.
Big news out of the grocery retail world as Amazon has announced its acquisition of major organic foods retailer Whole Foods Market – for an eye-popping $13.7 billion sale price that doesn’t look so massive given Amazon’s $136 billion sales volume in 2016.
Analysts across the retail industry are talking about the huge implications of this sale for a retail industry that many say is in the middle of a major meltdown, in part owing to Amazon’s massive growth in the eCommerce space. This foray into the grocery business is a big challenge to companies like Target, Wal-Mart, and others, and also a sign that reports of brick and mortar retail’s demise might be greatly exaggerated.
E-commerce has changed the game of how parcels are transported and delivered to customers with the expectations of same day vs next day delivery.
With the help of advanced technology, the days have become shorter. We no longer have to wait for the sun to rise and set a few times before we receive that box of meat pie that’s probably not safe to eat anymore.
What once felt as if a pack mule was used to deliver a package, now seems like a teleportation device is involved in the delivery.
The 2014 holiday season marked the last Q4 end-of-year sales period where packages shipped based on actual weight. With the start of 2015, UPS and FedEx instituted a dimensional DIM weight pricing structure.
The US Postal Service has since adopted this pricing model, also referred to as DIM weight pricing. This has changed the way freight companies calculate shipping charges.
Whether you love, hate or remain neutral on Amazon, one can only marvel and admire Amazon by the numbers which only appear to be accelerating.
The infographic from Fortna in this post from Jeff Ashcroft provides a startling picture of where Amazon is at currently and how they’re expected to handle over half of online e-commerce transactions with Walmart now only at 5% and growing!
Amazon has reigned supreme in e-commerce for years, but Walmart is well on its way to making the e-commerce giant a little nervous. Amazon acquired Whole Foods and dropped the price of Prime Pantry through Prime Perks. Amazon began looking into brick-and-mortar storefronts, hoping to capture a new slice of the omnichannel pie.
Walmart has a different approach, and in several ways, Walmart is positioning itself to best Amazon in e-commerce through an innovative, omnichannel return strategy. To understand the true scope of this accomplishment, supply chain leaders need to understand the precursor steps Walmart has taken.
We stand at the cusp of some interesting new possibilities for business. As such, we can expect some potentially drastic changes, and with them the need for smart solutions. We’ll take a look at a handful of the major challenges facing supply chain over the next half-decade, and how the industry is approaching these.
It can sometimes feel as though our commercial landscape is in a constant state of flux. Whether due to frequent changes in technology, attitudes of consumers, or shifts in working practices, this can breed both an exciting sense of competition, as well as uncertainty. Supply chain managers are often at the forefront of these developments.
The growing size of today’s consumer market sets the stage for entrepreneurs and companies of varying capacities to take part. The US consumer market alone was at $1.5 trillion in 2016. And this number is continuously increasing, including omnichannel customer service.
According to an article from AdAge, US Gen Y or millennials are also swiftly increasing their slice of the pie, spending more than $200 billion annually.
Now that the record-breaking Black Friday is behind us, retailers small and large must place their focus over the coming weeks on preparing for the Christmas retail holiday shopping season.
According to a report by Gartner L2, nearly 85%of holiday sales in 2017 took place in brick-and-mortar stores. It’s therefore hugely important for retailers to make the most of this time to get everything ready to maximise sales over the holiday period.
If you’re unsure where to start, we recommend taking a look at this helpful infographic from the team at Colourfast Printing which offers a handy Christmas retail checklist.
At the start of my career, most brands and OEMs used a traditional two-tier distribution process through wholesalers and retailers to sell their products. There was no omnichannel alphabet soup.
“Advanced” companies passed orders via EDI. Brands knew little about their end-users, a far cry from today’s growing customer-centric approach with expanding arrays of channels and convenience options.
Shippers face many challenges in successfully delivering products to end-users, and last mile logistics will be a core focus of change in the coming months. Consumer demands and expectations are rising, and up to 25 percent of consumers are willing to pay extra for same-day delivery.
Also, same-day delivery will reach a 25-percent market share by 2025. By 2018 alone, same-day delivery and last mile logistics will be valued at more than $1.35 billion.
E-commerce is the driving force behind the sudden uptick in last mile logistics, and as explained by Logistics Management, e-commerce is expected to grow to $2.4 trillion by 2018 as well.
To gain a competitive advantage in last mile logistics, shippers need to understand the top seven trends in last mile logistics.
In February, 2018 it was reported that Amazon was going to launch its own delivery service: Shipping With Amazon!
Effectively Amazon has declared that they are officially entering the logistics business. The “Shipping With Amazon” service, albeit currently on a much smaller scale, competes with the logistics service and delivery capabilities offered by UPS, FedEx, and UPS.
But these are incredibly large, well established logistics companies. And they are also the major delivery service suppliers to Amazon.
The retail company I had joined had just invested $25 million to automate their Distribution Centre. They automated the process of fulfilling orders in individual units, or eaches, instead of case fulfillment.
As I learned more and more about the system and the operation it became obvious to me that the entire paradigm that went into the $25 million investment was wrong. They wasted at least $20 million by perpetuating individual unit.
They could have save a lot of time and money by changing their fundamental operating model to one of case fulfillment – the Retail Holy Grail!
“The receiving docks are backed up. We have trucks in the parking lot waiting to unload their goods. There are even more containers on their way. And we have no empty space left in the warehouse racking.”
That was the actual conversation I had with the head of the Distribution Centre (DC). We had a big problem on our hands to say the least.