Thursday 19th Oct 2017 - Logistics & Supply Chain

The 350 year old retail challenge

I must confess that I had never heard of William Lucas until today. But it turns out that Lucas is the person we must thank for the home shopping revolution. And the ramifications of his innovation are creating challenges for retail supply chains today.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

The year was 1667, and Lucas, who was a gardener, started distributing a pamphlet to his customers listing his product range alongside the prices. So significant is this that Royal Mail is commemorating the 350th anniversary of the event with an online gallery of catalogues through the ages.

In the intervening period, home shopping has become so important that it is now a threat to the traditional high street stores – so much so that the IGD and Consumer Goods Forum have come up with a ten point plan for grocery retailers to ensure that physical stores remain relevant to shoppers in the digital age.

At the heart of the list is the proposition that the physical store will offer consumers something that online shopping cannot.

The Evolution of the Physical Store, prepared by IGD for CGF’s E2E Value Chain Learning Series, argues that shoppers’ more regular purchases will have increasingly shifted online, so stores’ ranges will need to be unique, adaptable and relevant. Not surprisingly, therefore understanding shoppers and their missions will be even more important.

The plan highlights the importance of data and analytics to help retailers make more informed decisions around their ranges.

It also foresees the use of robotics and technology will free up more space in-store – but it warns that as technology removes some of the human elements of in-store services, it will be essential for companies to have a friendly face to bring their brands to life.

Involving the supply chain team earlier and more often is another key element. IT says: “More pressure will be placed on retailers’ supply chains to meet shoppers’ demands. Retailers will need greater understanding of demand planning and the ability to react quickly, plus greater collaboration across the chain.”

And of course, success will be dependent on getting buy-in from the top and from partners in the supply chain – after all creating the store of the future will require investment and long-term planning.

From all this it is clear that the store of the future will be a very different place from the store of today. And that has significant implications for the way the supply chain is structured.

For example, a retailer would not be able to pick goods for home delivery from the store shelves, the way some do today. And if the in-store range is different from the online range, that has implications for how inventory is managed.

I suspect that William Lucas did not spend too much time analysing the supply chain implications of his home shopping initiative back in 1667.

However, supply chain professionals today are faced not only with the challenge of creating supply chains that support the store of the future, but managing a seamless transition from where they are today.

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