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March 2020

Retail Supply Chains


Like any Supply Chain, Retail Supply Chains have their own unique challenges. They’re different from the Supply Chains you might see in industrial companies or wholesaling companies and they have very different dynamics.

The retail supply chain is dealing with the consumer directly and the customer really is King. So everything in the retailer’s Supply Chain strategy needs to be focused on the customer, and of course the shareholders, that goes without saying. So what makes retail supply chains so different? Well that of course depends on the type of retailer we’re talking about, because the needs of hardware retailers will vary from those of a fashion retailer. But in general terms, retailers need to deal with; very broad product ranges, ranges that change, perhaps by season, possibly high levels of promotional activity, a broad supplier base, maybe some long supply lead times if there is a high degree of importing.

What all this means, is that the retailer’s supply chain needs to be very flexible, responsive and low cost if the market sector is highly competitive. In terms of customer value, there’s a bit of a cocktail that retail customers are looking for.

1.Price – This needs to be competitive.
2.Range – Can be very important, say in a hardware retailer, where the customer expects a 1 stop shop for all their needs.
3.Service – Customers will quickly go elsewhere if service is consistently poor.
4.Quality is a given.
5.Availability is probably one of the key customer expectations. Particularly for advertised or promotional products.
6.Convenience is also a key component.
7.The Brand can be important depending on the retail sector, and lastly
8.Fashion can play a key role.

So these are the ingredients of our customer value cocktail. Then there are the emotional aspects, such as in store look and feel. So for those managing the retail Supply Chain, delivering this cocktail of customer needs is the key to success, but doing it at the lowest possible cost. Read more..