As published in Retail Week & DWF Supply Chain: Trends and Innovations in Retail 2014-15 report
In our recent research with Retail Week we asked Supply Chain Directors at some of the UK’s top retailers ‘what is the most pressing priority facing your supply chain team?’
Compared to the 15 options supply chain directors picked out last year when asked what the most pressing priority facing their supply chain team was, this year the directors selected only five, demonstrating that priorities are shifting and they are becoming increasingly focused on fewer, yet core, principles.
This increase in the emphasis on adapting to technological change may be explained by another interesting shift, namely in the number of supply chain directors nominating adapting to multichannel as the single most pressing challenge with regard to their supply chain strategy.
This year, 40% of the respondents say that adapting their supply chain to meet the demands of multichannel was the most pressing priority their teams faced, compared to just 12% in last year’s research.
Adapting to the environment
According to a recent IMRG report, while an estimated 21% of all UK retail is now conducted online, national retailers are seeing over half of those online purchases being collected in their stores, underlining the need for a flexible and agile approach to fulfilment in the multichannel environment.
For the supply chain director of a leading fashion retailer, having “a mix of bricks and clicks has the greatest impact on the retail supply chain function”, with the combination of a stores estate and an online business a delicate “balancing act”. “We are undertaking a massive review of our retail estate at the moment to make sure it’s aligned. Most retailers have a decline in store numbers and we think that will continue as the young grow up and outnumber us. Stores are not going to go away, they are a big part of our culture,” he says.
Underlining how multichannel is pervading supply chain development, the head of national distribution at a department store operator emphasises how concerns over multichannel, coping with the pace of change and ensuring supply chain agility are connected. “I want to stress that all three are very interlinked. This is because of the omnichannel developments that all retailers are experiencing. These developments are happening at such a pace that you need greater agility and flexibility within your supply chain,” he says.
The distribution director of a department store operator adds: “Adapting to the multichannel world is the biggest challenge by a long way.”
Whether specifically with regard to multi-channel development or in relation to technological development, the prevailing view among the supply chain leaders interviewed for this report is that customer preference and requirements represent the crucial factor behind supply chain development.
Watch out for our next blog post which will look at the key challenges facing supply chain teams this year.
If you have any questions or would like more information, please contact Hilary Ross Partner & Head of Retail, Food & Hospitality sector.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.