While the retail sector has made massive progress in adapting and adjusting to the new world order of e-commerce and online shopping, even the industry leaders recognize that they have a long way to go. A recent survey concluded that only 24 percent of companies believe they have an agile supply chain adequate to serve the online world, and a huge 81 percent admitted their supply chain is not fit for serving the omni-channel.
Significantly, the largest market and growth potential is in the emerging and developing countries across Asia, much more so than in the developed economies of the Western world. The Asia-Pacific already accounts for more than one-third of the global e-commerce market and is forecast to US$1 trillion by 2017, with the Chinese online market on its own forecast to hit US$1 trillion by year 2020.
These shifts in the retail landscape combined with digital consumers’ shopping preferences will continue to have profound supply chain implications, particularly for traditional distribution operations and established logistics networks.
The online revolution tests almost every aspect of the long-established pattern of retail supply chain processes, including warehouse operations; pick, pack and despatch; order fulfilment and delivery; as well as introducing new dilemmas such as free shipping, last-mile delivery, product returns and cross-border transactions.
These challenges present a window of opportunity for new entrants who can design and build business models and logistics operations from scratch, leveraging leading-edge Cloud-based technologies to rapidly implement made-to-measure e-commerce solutions, while the traditional service providers struggle to adapt and keep up with the pace of change.
The boundaries are becoming increasingly blurred; the previously clearly segregated roles undertaken by retailers, Internet companies and logistics service providers are converging, with many exciting opportunities ahead in serving omni-channel supply chains.
Mark Millar, Managing Partner, M Power Associates