Preparing your supply chain for multi channel retailing Stewart Samuel, Program Director, IGD.

Transcription

1 Preparing your supply chain for multi channel retailing Stewart Samuel, Program Director, IGD

2 This afternoon s presentation The rise of multichannel retailing Supply chain challenges How suppliers have been responding

3 This afternoon s presentation The rise of multichannel retailing Supply chain challenges How suppliers have been responding

4 Retailing is seeing a generational shift Hypermarkets will need to generate leisure appeal Supermarkets will showcase foodie credentials Convenience will win in urban locations Discount will appeal to a broader customer base Online will be part of shoppers expectations Digital to act as an enabler and bring more empowerment to the shopper Core Formats Growth Formats Source: IGD Research

5 Source: thinkstockphotos

6 Source: curchew.com

7 Channels were linear Drugstores Supermarkets Online Discounters Dollar Stores Convenience Mass Merchants Hypermarkets Source: IGD Research

8 Channels are blurring Supermarkets Hypermarkets Discounters Mass Merchants Online Convenience Drugstores Dollar Stores Source: IGD Research

9 What can we learn from the UK market? Superstores Hypermarkets Small supermarkets Convenience Discount Online Traditional retail By 2019: $5.3bn +$0.2bn +$20.3bn +$18.6bn +$16.1bn $0.2bn Source: IGD Research

10 Expecting to see progress with ecommerce this year

11 Hard discount continues to attract interest

12 Small formats rather than c stores

13 This afternoon s presentation The rise of multichannel retailing Supply chain challenges How suppliers have been responding

14 Supply chain priorities Suppliers 1. Improving service level and availability 2. Reducing operating cost 3. Inventory and forecast accuracy 1. Increasing on shelf availability 2. Growing multi channel capability 3. Reducing inventory Retailers Source: IGD Research

15 The main driver of change in the supply chain Source: IGD Research

16 On top of it and well prepared 23% Not looked at it 10% Not really sure what we need to do 5% Not looked at it 5% Not really sure what we need to do 4% Not completely clear, having a go 9% Manufacturers On top of it and Not completely well prepared clear, having a go 51% 21% Retailers Good idea of what needs to be done, getting started 31% Good idea of what needs to be done, getting started 41% Source: IGD Research

17 Title

18 1 Forecast accuracy 2 Order and pallet configuration 3 Range or SKU complexity

19 This afternoon s presentation The rise of multichannel retailing Supply chain challenges How suppliers have been responding

20 How ecommerce is impacting suppliers processes We ve got purpose built processes 7.9% We've had to adapt some of our processes to cope, 28.6% We use our standard processes 25.4% It doesn't really affect us 38.1% 0% 10% 20% 30% 40% 50% 60%

21 Online impacting planning and products Specific SKUs Dedicated on line managers Specific online delivery points Specific order to cash processes Orders for singles, not cases Reduced minimum order quantities Shorter lead times for online orders Separate forecast and demand planning activity Unique promotions for on line

22 Impact of c stores on suppliers processes Purpose built processes 7.1% We ve had to adapt some of our processes to cope 28.6% We use our standard processes 53.6% It doesn t really affect us 10.7% 0% 10% 20% 30% 40% 50% 60%

23 Convenience processes challenge suppliers Separate orders and deliveries for convenience stores and other channels within the same retailer Separate promotions in the convenience channel Forecasting for promos and products can be different Different lead times for convenience Separate manual ordering processes EDI not being used Multichannel retailers have different demand patterns, but combined orders, making forecasting difficult There s also a lack of detailed EPOS data, which doesn t help

24 Discount affecting the most suppliers We ve got purpose built processes 9.0% We've had to adapt some of our processes to cope 44.8% We use our standard processes 40.3% It doesn't affect us 6.0% 0% 10% 20% 30% 40% 50% 60%

25 Discount supply chain impacts both product and process Mixed cases Different case sizes Specific outer case colours and labels Specific display pallets Greater use of full pallets Driver unloading of vehicles Manual order placement, using fax or post Promotional ordering Forecasting with lower levels of collaboration Lean structures mean there aren't the people to talk to Processes are designed to be simple and low cost

26 Business takes the lead in retailers Supply chain is fully integrated with planning our approach to multichannel It s supply chain s role to work with the business to meet the needs of the planned strategy The supply chain has to be able to respond to the changes the business implements 21% 33% 46% Increasing strategic role

27 Supply chain leads the strategy within suppliers organisations Supply chain is fully integrated with planning our approach to multichannel It s supply chain s role to work with the business to meet the needs of the planned strategy The supply chain has to be able to respond to the changes the business implements 25% 31% 44% Increasing strategic role

28 A successful multichannel business Shopper Understanding Retailer/Supplier collaboration Integrated Supply Chains Internal Capability Digital technology and data capture Source: IGD Research

29 Key takeaways Growth is coming from the new channels. Supply chains need to be ready Retail supply chains are ahead of suppliers in being ready for the changes Smaller suppliers are in most danger of being left behind, so need to start now The discount channel is affecting suppliers the most ; over half said they have had to change or develop specific processes for the discounters Retailers are taking a total business approach to multichannel, where as suppliers see it more of a supply chain issue. Suppliers need a total business view or they may miss out on the growth

30 Next steps: Conference delegates can receive a unique copy of our latest insight on the hot topics that matter: Availability Inventory Cost and service S&OP E mail Stewart.Samuel@igd.com Source: IGD Research

31 Access our supply chain insight online

32 Connect with us!