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Stuart O'Brien

Some logistics firms ‘will evolve to become retailers’

Some logistics companies will evolve to become retailers as the first standardised wave of ecommerce fragments in a variety of creative new ways to sell and add value.

That’s according to a new report from IGD, in association with The Consumer Goods Forum.

Looking at how companies can respond to this change and how businesses will utilise digital technology to become more relevant, the report explores three digital retail models of the future and predictions for an increasingly digital food and consumer goods industry.

Major grocery ecommerce markets will continue to expand rapidly, growing at almost four times the rate of any other channel. Data highlights from the research include:  

  • Asia-Pacific’s online grocery market will grow by 196% by 2023, adding $198bn
  • North America’s online grocery market will grow by 152% by 2023, adding $38bn
  • Europe’s online grocery market will grow by 66% by 2023, adding $21bn

Asia and North America will lead the way on the rate of growth, with Europe set to develop this channel at a comparatively slower pace.

Indeed, grocery ecommerce sales in Asia-Pacific are set to triple over the next five years, with IGD forecasting that in 2023, ecommerce’s share of grocery in Asia (7.5%) will be twice that of North America (3.4%), and close to three times larger than Europe’s (2.5%). 

IGD says businesses are transforming their established operations through digital technologies to enhance their stores, reduce costs and improve connection with customers. Its predictions for rapid evolution include:

  1. Technology-led strategic partnerships will accelerate rapidly. Technology companies will have a much stronger influence on CPG retailing
  2. Advanced digital technology will help physical stores close the data gap on pureplay operators
  3. The commercial trading interface between established retailers and suppliers will be transformed by AI
  4. The most advanced traditional retailers will diversify to become less reliant on selling products
  5. Retailers with the best data capabilities will win in the long term by becoming incrementally better every single day

Ecommerce 2.0 – The first, mainly standardised wave of ecommerce is fragmenting in a variety of creative new ways to sell and add value.  IGD’s predictions for Ecommerce 2.0 include:

  1. Successful pureplays will diversify offline, either by opening their own stores or forming alliances with traditional retailers 
  2. Manufacturer D2C businesses will become a major force and they could be consolidated through a single ordering platform
  3. Specialist retailers and marketplaces will proliferate
  4. Some logistics companies will evolve to become retailers
  5. Social commerce will go global, with platforms integrating with ecommerce to offer more frictionless shopping

Ecosystems A network of retail and consumer services is emerging, linked by logistics, financial services and technology.  IGD’s predictions for Ecosystems include:

  1. Ecosystem evolution will vary considerably by market
  2. More technology companies will evolve into ecosystems, with more major technology businesses broadening their capabilities and services
  3. Ecosystems will recruit a growing number of established businesses to get even closer to shoppers and the wide range of products and services they need and want
  4. New consumer services will be bolted onto ecosystems (e.g. healthcare, leisure, hotels etc.), connecting as many consumer touchpoints on the path to purchase as possible
  5. The centralisation of data and use of advanced technology means that ecosystems will gain real time insights, promoting rapid change, driving greater personalisation for shoppers and raise profitability, a benchmark for all other retail models.

Peter Freedman, Managing Director of The Consumer Goods Forum, said: “While of course growth remains challenging for all of the established players in the industry, many are nevertheless finding that the ongoing disruption presents exciting opportunities. This report presents several ideas for consumer goods and retail companies looking to secure their long-term future, and we’ll be discussing some of these themes at the Global Summit in Vancouver: how scale and agility can impact your business model, how digital technologies will permeate decisions and how new forms of collaboration will help drive the sustainable evolution of our industry.”

Download IGD’s free report: igd.com/digitalretailmodels

Image by StockSnap from Pixabay

Retail woes ‘increase supply chain risk’

A new report suggests that growing pressure on the retail sector could increase risk-taking in the supply chain, resulting in further store closures and collapse of well-known brands.

The analysis, published by Cranfield School of Management and Dun & Bradsheet: ‘Global Supply Chain Risk Report,’ cites the fact more than 7,500 stores closed in 2018, with many high street brands hitting the headlines with profit warnings.

The new data shows increased levels of risk-taking since Q4 2018, with retailers reporting high levels of dependency on suppliers and indicating a propensity to off-shore to low-cost, high-risk countries where suppliers are more likely to be financially unstable.

“We know from recent news headlines about store closures, and the collapse of well-known chains, that the UK retail sector is under huge pressure at the moment. With many consumers preferring to do their shopping online, any retailer with a bricks and mortar footprint will be feeling the pressure,” said Dr Heather Skipworth, Senior Lecturer in Logistics, Procurement and Supply Chain Management at Cranfield.

“Analysis suggests that the sector is sourcing more from low cost regions, which are often associated with heightened risk and potential for supply chain disruption caused by political, environmental, or economic factors. There is also an increased probability of suppliers themselves being financially unstable in these countries. To mitigate against these risks, it is imperative retailers ensure they are practising dual supply strategies to help manage the trade-off between risk and cost and ensure smooth running of operations.”

Chris Laws, Product Leader at Dun & Bradstreet, said: “With retailers under pressure to identify cost efficiencies, it’s more important than ever for them to know exactly who they are doing business with to help minimise risk and ensure compliance with regulations. 

“Having robust due diligence processes in place is key to ensuring the stability of the supply chain and maintaining responsible, ethical procurement practices. In a challenging economic environment, risk-taking is understandable, but retailers need to ensure they have a full picture of supply chain relationships to flag potential risks and protect their reputation.”

Using four key metrics – supplier criticality, supplier financial risk, global sourcing risk, and foreign exchange risk – the Global Supply Chain Risk Report investigates the level of perceived supply chain risk faced by European companies with international supplier relationships.

The Q1 2019 Global Supply Chain Risk Report is available to download now from https://www.dnb.co.uk/perspectives/corporate-compliance/q1-2019-global-supply-chain-risk-report.html

Logistics facing ‘time bomb’ skills deficit

A ‘time bomb’ of logistics skills deficits could bring the whole nation to a grinding halt, according to a new report.

The research, published by specialist recruitment and development company Talent In Logistics, reveals that only eight percent of young people consider the sector to be an attractive career option, while an astounding 42 percent don’t even know what logistics is.

And, with only nine percent of the current logistics workforce under the age of 25, the report says there’s a likelihood of a severe skills deficit in the future.

500 students and teachers attending the WorldSkills UK Live exhibition took part in the Talent In Logistics research in November 2018, which also reveals significant concerns around diversity, career opportunities and salary.

The research triggered the commissioning of a white paper,’ Changing Perceptions: Attracting Young Talent Into Logistics’, highlighting the extent of the damage and providing insight to help businesses attract and retain millennials.

Key findings included:

  • A quarter (26 percent) of the young people quizzed said they do not believe there is gender diversity within the logistics sector
  • Only 18 percent have been spoken to at school or Sixth Form about logistics as a career path

Many of those polled were also unaware of the range of roles available within logistics, which can range from facilities managers and data analysts to freight co-ordinators and materials planners.

“The perception of logistics is arguably the biggest problem facing the sector when trying to recruit new talent,” said Ruth Edwards, business manager of Talent In Logistics.

“As an organisation we want to promote the importance of recruiting talent from groups that are currently under-represented in the logistics industry.

“It’s only by future-proofing the nation’s currently thriving logistics sector that we can keep the UK moving.”

Talent In Logistics says that while driver shortages and skills gaps are already taking their toll, the biggest hurdle is the sector’s ageing population and the lack of millennials coming up through the ranks to replace them.

Edwards concluded: “We are calling upon the sector and the education system to play their part in ensuring young people are aware of the many amazing opportunities and career paths available within logistics.”

A full copy of the report ca be downloaded below.

Image by rawpixel from Pixabay

Claim your free VIP place at the Fleet Services Management Summit

There’s a free VIP place reserved for you at this autumn’s Fleet Services Management Summit on November 11th & 12th.

Can you confirm you will be joining us?

This unique event takes place at Whittlebury Hall, Northamptonshire.

The Summit will give you access to innovative and budget-saving suppliers for a series of pre-arranged, face-to-face meetings based on your requirements. You can also attend a series of seminars, and network with like-minded peers.

Overnight accommodation, all meal and refreshments, plus an invitation to our networking dinner, are included with your free VIP ticket.

If this would be useful for your business, please confirm your attendance here.

Places are limited, so register today to avoid disappointment.

SAVE THE DATE: Total Supply Chain Summit

The second Total Supply Chain Summit of 2019 will take place on November 4th & 5th in Manchester – Register your VIP delegate place!

Attending as one of just 60 senior supply chain professionals will enable you to:-

  • Source innovative and budget-saving suppliers
  • Attend insightful and inspirational seminar sessions
  • Network with like-minded peers
  • Enjoy complimentary overnight accommodation plus all meals and refreshments
  • Join a networking dinner with entertainment

For more information, visit https://www.totalsupplychainsummit.co.uk.

Revealed: 2019 fleet management buying trends

The 60 senior fleet professionals attending this autumn’s Fleet Services Management Summit have revealed their purchasing priorities for the next 12 months.

Specifically, these buyers are looking for suppliers in the following categories (% of delegates looking for those solutions):

Accident Management – 42%

Car & Van Manufacturers – 46%

Contract Hire & Leasing (Long Term) – 38%

Contract Hire & Leasing (Short Term) – 33%

Dash Cams – 46%

Driver Training – 50%

Electric Vehicles – 75%

Fleet Management Software – 42%

Grey Fleet – 38%

Hybrid Vehicles – 63%

LPG/Alternative Fuel – 38%

Risk Management – 50%

Service, Maintenance & Repair – 42%

Tyres – 38%

Vehicle Tracking – 42%

The Fleet Services Management Summit takes place on November 11th & 12th at Heythrop Park, Oxfordshire – for more information about the event, attending as a delegate or showcasing your solutions, visit www.fleetservicessummit.co.uk.

Do you specialise in Cost Reduction solutions? We want to hear from you!

Each month on Supply Chain Briefing we’ll be shining the spotlight on a different part of the logistics and distribution market – and in June we’ll be focussing on supply chain Cost Reduction Solutions.

It’s all part of our ‘Recommended’ editorial feature, designed to help supply chain industry buyers find the best products and services available today.

So, if you’re a Cost Reductions specialist and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Nick Stannard on n.stannard@forumevents.co.uk.

Here are the areas we’ll be covering, month by month:

Jun – Cost Reductions
Jul – Supply Chain Software
Aug – Logistics & Operations Management
Sep – Labelling & Packaging
Oct – 3PL & 4PL
Nov – Order Fulfilment
Dec – Transport Planning & Load Optimisation

For more information on any of the above, contact Nick Stannard on n.stannard@forumevents.co.uk.

PALLITE environmental credentials secure major endorsement

PALLITE has received a rubber stamp on its sustainability goals following an evaluation by Giraffe Innovation.

The paper-based transit and storage packaging specialist commissioned Giraffe Innovation to evaluate the environmental impact of its product range to support current and future customers in reaching their sustainability goals. 

The report addresses Life Cycle Assessment (LCA) of PALLITE UK and Euro sized pallets and pallet boxes versus wood-based equivalents across their lifecycle. Various scenarios were modelled using indicative transport modes (by road, sea and air) as well as manufacturing.

The report shows that by changing from a wooden pallet to a PALLITE pallet, carbon emissions are reduced, overall freight load weight is reduced, and the general life cycle of a PALLITE pallet has less impact on the environment than a wooden pallet. 

Various scenarios were demonstrated in the report, one of which involved flying 10 standard pallets with corrugate boxes, each holding 500kg, from London Heathrow to JFK New York, a total of 5,536km.

This overall distance of 29,608km produces emissions of 36.77tCO2e. By replacing the wooden pallet and corrugate box with a PALLITE standard pallet box, emissions drop to 35.611tCO2e. That’s a total reduction of 1.101tCO2e, 0.148t less weight, saves 397.7 litres of fuel and a cost saving of £119 on fuel alone.

For context, that’s the same COemissions as 1,204 pounds of coal burned, 45 propane cylinders used for home barbeques, or 140,391 smartphones charged. It’s the equivalent greenhouse gas emissions avoided by 48 bin bags of waste being recycled instead of landfilled, or 41.8 incandescent lamps switched to LEDs. And lastly, is the equivalent carbon sequestered by 18.2 tree seedlings grown for 10 years or 1.3 acres of forest in one year.[i]

Matthew Marks, Quality Manager at PALLITE said: “Working with Giraffe has been insightful and by learning about the life cycle analysis of our product range with quantifiable data means we’re much better positioned to help our customers achieve their sustainability goals. It’s reassuring to know that our products are making a positive impact on how value chains and companies approach reducing their COemissions.”

[i] https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator

Road haulage capacity ample, prices on the rise

The Davies Turner Group has asserted that available road haulage capacity in Europe is at its highest level in a decade.

The company’s own experience is in line with recent survey results that the strong growth in European freight volumes in recent years is showing signs of slowing down in 2019.

“One year ago European haulage capacity was very tight, especially in Germany, while now there is currently the capacity to handle demand, despite the well publicised driver shortages,” said Philip Stephenson, chairman of the Davies Turner Group.

“We have also noted that haulage prices in the first quarter of 2019 were higher than in the first quarter of 2018. That is not surprising, despite the situation regarding supply and demand, as we are seeing a much-needed catch up in pricing, as underlying operational costs continue to increase strongly due to driver shortages pushing up employment costs. Road tolls and fuel prices are increasing.

“Past experience does tell us that for seasonal reasons, the available overland transport capacity usually is greater in the first months of a year. 

“Many of the shippers that rely on our daily European trailer services are moving their goods on a contract basis, and value the guaranteed services that we offer.  As a result our own freight volumes and market share show continued healthy growth.” 

Davies Turner’s portfolio of European overland trailer services utilises a pan-European network of partners through its membership of System Alliance Europe – which delivers standardised EDI links and shipment tracking. 

Last call for the Total Supply Chain Summit

There are just two free VIP tickets left for this month’s Total Supply Chain Summit.

This two-day event takes place on May 20th & 21st at Heythrop Park, Oxfordshire. These VIP places will go quickly, so register now for the opportunity to:-

  • Source innovative and budget-saving suppliers
  • Attend insightful and inspirational seminar sessions
  • Network with like-minded peers
  • Enjoy complimentary overnight accommodation plus all meals and refreshments
  • An invitation to our networking dinner with entertainment

But act swiftly as we are closing registration shortly.

For more information, visit www.totalsupplychainsummit.co.uk.