A few weeks ago, we heard from four experts about the state of the supply chain and some measures being taken across multiple industries to navigate supply and demand fluctuations amid dwindling transportation and labor capacity. But we know retailers have found it unimaginably difficult to stabilize operations the past several months given the steady uptick in e-commerce and m-commerce transactions, even as stores start to reopen.
Though we can’t fully predict how consumers or supply chains may behave in 2022, our global experts say retailers are starting to anticipate certain trends in their regions and prepare accordingly:
George Pepes, Retail and Hospitality Solutions Marketing Lead, Asia Pacific (APAC), Zebra Technologies:
“Even though retail in the APAC region has been severely impacted by sequential lockdowns across multiple countries and the Asian outlook for 2021 was downgraded to 6.5% compared with the April 2021 World Economic Outlook, the future of retail looks promising. As vaccination rates accelerate, the region is expected to grow slightly faster in 2022 than anticipated earlier. To add to this, the growth of the middle class is also favourable to growth in the retail sector. It's estimated that 2 billion Asians were members of the middle class in 2020 and that this number could rise to 3.5 billion by 2030. Asian consumers are also expected to account for half of global consumption growth in the next decade, and globally, one of every two households with upper-middle-income and above is expected to be in Asia. Furthermore, one of every two retail transactions is expected to be made by consumers in the region.
Coupled with ever-increasing internet penetration and adoption of smartphones, online retail is set to grow even further. Consumers across the region have become comfortable shopping online due to the pandemic. However, this can cause challenges for retailers as they are required to deliver on this new retail reality. In Zebra’s most recent Global Shopper Study, 82% of APAC decision-makers agreed they need to reduce online order expenses, the highest of any region surveyed. As online retail adoption increases, it is imperative for retailers to look to technology to ensure inventory basics and visibility across the supply chain are as high as possible. Retail decision-makers are aware they need better inventory management tools to improve accuracy and availability if they want to increase satisfaction levels for both shoppers and associates.”
Mark Thomson, Director of Retail and Hospitality Solutions, Europe, Middle East, Africa (EMEA), Zebra Technologies:
“There is no doubt that the consumer demand for speed and transparency are exerting major pressures on supply chains that have been designed to be close to just in time in order to reduce costs. Add to this the ageing populations in many countries and sudden spikes in demand caused by Prime Day, Black Friday and Singles Day, then we have a set of tough challenges being placed on supply chains that stretch them to their limits. When we then consider the global pandemic, removing people from the workforce, closing borders and creating even more uncertainty, then it’s no surprise that supply chains have difficulty coping.
Improving visibility throughout the supply chain is more critical than ever. Removing paper and digitizing processes to give real-time understanding of where products are both benefits businesses throughout the chain and provides the opportunity to make customers more informed in a world where they demand to know where their products come from. Automation is already helping to drive down costs from manufacturing to the warehouse, where robots frequently work alongside humans to reduce walk time and improve productivity. This harmonious relationship is helping retail supply chains to scale and increase speed when labor is hard to find.”
Andres Avila, Industry Solutions Marketing Manager, Latin America (LATAM), Zebra Technologies:
“The pandemic has forever changed the experience within supermarkets and stores as we know it. Several stores reported the diversification of their sales through different channels, and in Latin America, e-commerce grew by up to 66%. Before the pandemic, it was anticipated that online food purchases would take years to grow as fast as they did. Customers who continued to shop in person faced big changes at the store, though, including plexiglass checkout barriers, one-way aisles, capacity control, and more out-of-stock items than usual.
Many retailers, especially traditional ones, are now faced with the challenge of bringing their supply chains to a level where they can meet the increasing demands of their customers. New concepts like quick commerce, social commerce and drop shipping are gaining in relevance within retailers’ conversations. Consumer demands and buying decisions have migrated from the traditional ‘good price’ factor to supply chain efficiency, with product deliveries happening in just 10 minutes through apps in some cases. Considering the magnitude of the cities in Latin America, this is a great logistical challenge.
To respond to this demand, retailers are also incorporating new concepts such as dark stores, hybrid stores, micro fulfillment centers (MFC) and centralized fulfillment centers (CFCs) to optimize supply chains, to allow retailers to fulfill orders online profitably, faster and with fewer workarounds.
Online grocery shopping is here to stay, but also the changes in the in-store shopping experience. Supermarkets must provide shoppers with an enhanced experience both online and in store to retain loyal customers and attract new ones. Shopkeepers who don't offer online shopping will need to adapt so they don't lose customers looking for those frictionless experiences. Online shopping should be intuitive, offer accurate inventory information, and allow for different delivery options. Retail brands are now digital brands, and their future success will be determined by their variety and how well they can communicate their value promise, their commitment to customers and partners, and even more importantly the role in the communities they serve.”
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