Ever since the introduction of the “fast fashion” model more than ten years ago the use of supply chains has become instrumental in success. In the last few years there has been increased pressure to develop instrumental supply chains to reach the consumer. This pressure has been brought about by a couple of trends in the industry. The fact is that like with any industry online shopping has become instrumental. In short yes digital supply chains are going to play a huge part in retail. Now let’s take a look at what has brought this change about. There are really three trends bringing about this change.
The first trend that we need to look into is the globalization of the market place. With the use of online shopping the reach of your “storefront” has gone from the local community, to literally anyone that has access to the web. This is a great thing in a lot of ways; however it has also made it difficult for retailers that are comfortable with the brick and mortar to compete in the market.
The second, the digital movement makes the market much more price transparent. This means simply that the consumer is no longer limited to the local shops. They have access to almost anything online at a very competitive price. This means that the retailer can expect lower margins and a need for a greater variety of product.
The third and final trend is the demand for multi-channel offers. Meaning simply that the consumer wants to have options for obtaining their purchases, for example “in store pick-up”. This has made it necessary for retailers to develop more flexible supply chains. As we enter into the next phase of retail the use of digital supply chains could be instrumental to the success of any retailer.
What it takes to create a successful digital supply chain is a simple concept. All of the most successful chains incorporate three main principles. They are “lean” meaning that they cut cost and focus on the necessities. They are fast, bringing the fulfillment of the consumers order quickly and accurately. The final thing that they all have in common is that they are flexible; this allows the retailer to create an efficient process for their clients.
Another thing that all successful chains have in common is the integration of the brick and mortar with the online store. With ever changing trends keeping two separate inventories has become a thing of the past. What is more commonly seen now is shipping online orders directly from the store front. Making use of the staff already in place is effective and efficient. This also allows the retailer to have a better margin and larger product mix.
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Photo: The Bim Hub