Press | Port Logistics Group
Everyone recognizes that the retail industry is in the midst of a phenomenal transition driven by always-on digital consumers who are molding the shopping experience to fit their lifestyles. They expect speed, convenience, multiple product choices and ease of use. They want to shop whenever, wherever and however they choose and demand fast delivery and no-hassle returns. And while they may not recognize it yet, they want all of this delivered in a seamless, consistent brand experience.
On the demand side this shift has happened very quickly, mirroring the explosion in digital and mobile devices. And it continues to accelerate. According to the U.S. Department of Commerce, online sales grew more than three times as quickly as total retail sales in the second quarter of 2014. While the long term implications of that growth curve can hardly be overestimated, it’s important to remember that these sales still represent only 6 percent of all retail business. As retailers invest millions on electronic storefronts and order management technology to capture digital customers, they also must continue to stock distribution centers and replenish their brick-and-mortar network.
The problem is that the traditional store-centered supply chain, which works so well for larger orders and case picking, is not well equipped to handle the very different and more complex picking, packing and transportation requirements of B2C. This was a manageable problem when online sales were still a novelty. Volumes were small enough for most retailers to operate two separate supply chains with separate inventories – one for replenishment of traditional warehouses and stores and one to fulfill digital orders. Now, with B2C rapidly gaining momentum, retailers are faced with the monumental task of revamping their physical supply chains and rethinking their fulfillment strategies around omni-channel sales.
Learn more by downloading the full whitepaper by Port Logistics Group.