Retailers and Food Shippers Face Similar “Change or Die” Dynamic in Logistics

What is the commonality between retailers and food shippers when it comes to surviving the rapid evolution of the business environment wrought by the widespread adoption of new and emerging sales and delivery strategies?  Hint: just as technology is fueling the rapid pace of change, it is also the driving force behind the success of companies succeeding at remaining relevant amidst a sea change in how consumers interact with the businesses they frequent. Read on to learn how technology is both the challenge and solution facing retailers and food shippers.

There are striking similarities between food retailers and consumer goods retailers when it comes to evolving supply chain strategies and we’re examining the stakes of failure to change with the times. That’s why we read the Fall/Winter issue of Food Shippers of America magazine with great interest. Particularly the article titled, “Move Forward or Fall Behind” chronicling a series of recent events in retail that reminds readers how much the retail market is changing and how the shifts will directly impact the ways products are moved through the supply chain.

It should come as no surprise that the seismic shift in business models best illustrated by the rise of companies like Amazon.com and other successful online retailers is at the heart of so much creative destruction. The “direct to consumer” model for sales of everything from tube socks to tomato sauce has certainly impacted the ways in which retailers and food shippers alike design their supply chain networks and logistics processes. Those companies without a forward-looking posture toward the use of supply chain management technologies run the very real risk of becoming the next casualties of a rapidly evolving business environment.
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No consumer goods industry player is immune to the changes underway. But those with strong, flexible supply chain and logistics IT solutions including TMS, transportation optimizers, YMS and other software tools are inoculated against the disease of stagnation which has afflicted so many once mighty brands.

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Just ask the Great Atlantic & Pacific Tea Company, better known as failing supermarket chain, A&P whose long, slow slide into irrelevance can be blamed on decades of neglect when it came to embracing innovation. The Wall Street Journal writes, “The decline of A&P aligns with several trends in the grocery industry. Traditional neighborhood grocery stores such as A&P are feeling pressure from both increasingly mainstream high-end grocers, like Whole Foods Market Inc., and discounters, like Wal-Mart Stores Inc., Target Corp. and Aldi.” Those ascendant players – Target, Walmart and Whole Foods – are all shining examples of organizations with completely modernized, flexible and transparent supply chain logistics programs.

For more evidence, talk to the once mighty Sears/Kmart retail empire which is struggling mightily to make up lost ground in terms of updating and modernizing its approach to sales and fulfillment. With companies like Home Depot and Lowe’s making inroads into its once lucrative appliance business, we can see the shift in consumer shopping habits (from department stores to big box outlets) and the need for Sears to modify its business model and supply chain practices to remain competitive.
Conversely, companies like Amazon lead the way in terms of innovation in supply chain and logistics. But, companies need not be the vanguard of change in order to adapt and overcome. Consider Best Buy, the electronics retailer once thought to be on death’s doorstep as online electronics sales cut deeply into its profitability. Yet, wise reforms to its business model, including implementation of a strong online sales engine coupled with in-store customer pickup, have reinvigorated the company’s outlook, restoring its industry leading position.

No consumer goods industry player is immune to the changes underway. But those with strong, flexible supply chain and logistics IT solutions including TMS, transportation optimizers, YMS and other software tools are inoculated against the disease of stagnation which has afflicted so many once mighty brands.

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