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Big changes ahead as supermarkets embrace smart tech

A study has found that nine in ten Brits now believe the average supermarket will be significantly different in just nine years’ time, with many of the changes that people predict being once the stuff of sci-fi films. 

The ThoughtWorks research showed that just over a quarter of adults (26%) believed the supermarket checkout will have disappeared by 2030, while around a fifth of respondents (18%) believed shelves would be stacked by robots. A further 13% of people believed there would be no human staff in stores at all by 2030, rising to 21% of students about to enter the world of work. 

The research was conducted by MaruBlue among a nationally representative sample of 2,007 adults. The research was conducted online.

Many also saw a big future for AI – with a fifth (19%) of people believing their food and drink for the home would be automatically re-ordered by our fridges, cookers and cupboards by 2030. 

These findings are from a new ‘2030 Britain’ study commissioned by ThoughtWorks. Following a home isolation era that has largely re-defined the consumer’s relationship with food, retail, work and home-life – the new study on food retail suggests the evolving use of technology in powering people’s lives has resulted in many seeing it as having a far more widespread role in shaping people’s everyday routines in tomorrow’s Britain. 

In terms of physical presence, while a quarter of those surveyed (25%) believed that the size of the average supermarket would likely grow – selling a range of additional items beyond just food – one in five (19%) believed the opposite: that supermarkets would only exist online, or that food would come direct from the food producer and, in doing so, would bypass the retailer.  

Asking about what supermarkets would sell, a third (32%) of people believed local food producers would take up more shelf space than they currently do, reflecting the current trend to support local suppliers and farmers. One in six people (17%) went further, suggesting that supermarkets would become centres for local artisan food producers and farmers to sell their produce, while one in seven (15%) believed the supermarkets would start to operate new local farms. 

As a result of almost 12 months of lockdown restricitons, the ThoughtWorks study saw a rise in expectations prompted by a year of acclerated digital skills. Technology has become the enabler for many many challenges presented, with earlier research from ThoughtWorks finding that over a third of people in the UK (24%) believed local producers will deliver straight to their door by 2030. 

Kevin Flynn, director of retail strategy at ThoughtWorks, said: “Crystal ball gazing tends to say more about our current times than it does about the future. Supermarkets have enjoyed a boom in activity during the lockdown, and consequently many can see them continuing to grow and expand over the next decade. However, as many people have been forced to look further afield for different products, they have new and better ways to meet their demands, and support causes that matter to them. This is a watershed moment for the retail industry which will have long lasting effects.” 

The value of global trade insights in navigating COVID-19 supply chain disruptions

By Mark Segner, VP Global Sales, Descartes

The Coronavirus pandemic has exposed the fragility of the modern supply chain, as companies struggle to acquire the products and raw materials needed to keep revenue flowing. With many businesses relying heavily on a limited number of trading partners, many located in hard-hit areas like China, the scale of the supply chain disruption has been a wake-up call. 

Pummeling the Bottom Line

COVID-19 shockwaves are being felt around the globe, with one in six companies adjusting revenue targets downward. Figures from the Office of National Statistics revealed that 72% of businesses in the UK reported that they are exporting less than normal, and 59% of reported that they are importing less than normal due to the impact of Coronavirus. 

According to a survey by the Institute for Supply Management (ISM), nearly 75% of companies reported supply chain disruptions due to the COVID-19 outbreak, with lead times doubling and delays compounded by a shortage of air and ocean freight options. A recent survey of Descartes customers also found that 31% are looking for alternative suppliers, and their usage of tools to find alternative supply sources has increased by 21%. Given the sheer scale of the disruption, many different types of businesses are unlikely to have a plan in place to address supply disruption from China and other countries.

Re-thinking Sourcing

With the global supply chain often more complex than many comprehend, very few organisations can trace their supply chain beyond their Tier 1 suppliers, and many are uncertain of the location of their second and third-tier suppliers. To fully understand supply-side risk, Deloitte notes that advanced digital solutions are “generally required to trace supply networks reliably across the multiple tiers of suppliers.” Indeed, manufacturers, retailers, and distributors are in uncharted waters as they race to identify new supply sources.

Global Trade Insights Guide the Way

With the daunting task of navigating the rapidly changing global trade landscape, where should your organisation begin? Actionable global trade data is your lifeline for supply chain resilience. In the face of COVID-19 disruptions, global trade intelligence solutions can help businesses swiftly find alternative suppliers in a concise three-step process:

  1. Identify potential sources; Know the market to make better sourcing decisions

A sophisticated global trade intelligence solution can assess market dynamics, revealing the impact of both the Coronavirus and recent tariff changes on specific commodity imports and exports by mapping the global flow of shipments and identifying recent volume shifts. Previous shipment volumes reveal which suppliers have capacity for your sourcing demands, while bill of lading (BOL) data helps you easily identify names, addresses, and contact details for each supplier.

2. Analyse costs; How much will it cost to do business?

Given the slowdown many companies are facing during the pandemic, curtailing costs is top of mind. Global trade data technology can analyse potential suppliers to calculate the total landed cost of doing business with them, including duty spend, variable and fixed taxes, shipping costs, and insurance costs. With international trade insight, businesses can also identify favourable Free Trade Agreements (FTA) or other preferential mechanisms to help maximise margins.

3. Vet potential trading partners; Limit liability and brand damage

The vetting process is vital for avoiding exposure to sanctioned parties but, given the fluidity and sheer size of restricted party lists and the rabbit hole of shell companies, obtaining an accurate view can be extremely challenging.

With a global trade intelligence solution, businesses can quickly screen potential suppliers to determine if the country or vendor are subject to any restrictions or sanctions from the government. Compliance vetting is crucial for avoiding fines and penalties but also ensures your company brand remains untarnished. 

Beyond COVID-19

Access to actionable trade insight is critical to developing a proactive supply chain response to the coronavirus and emerging from this pandemic as intact and profitable as possible. Sophisticated global trade intelligence solutions use shipment data from across the world to model trade flows globally, helping companies rapidly identify, analyse, and vet new sourcing locations. With the right approach, businesses can mitigate the impact of COVID-19 on supply chains and also strengthen and add resiliency to their logistics operations going forward.

How real-time information supports resilient supply chains

By Gill Devine, Vice President EMEA at Dataminr

In the first quarter of 2020, a spate of global and regional events have starkly exposed the fragility of the practices and processes that underpin supply chains. From the rapid, global spread of the COVID-19 disease to the resulting events and precautions taken since, today’s global organisations are facing an increasingly volatile world. This public health crisis has suddenly changed their operating landscape and materially affected their people, customers and bottom lines.

“When companies have advance knowledge of where the disruption will come from and which products will be impacted, they have lead time to execute avoidance and mitigation strategies immediately–like shaping demand by offering discounts on substitutes, buying up inventory, booking capacity at alternate sites, controlling inventory allocations, and so on,” supply chain experts Tom Linton and Bindiya Vakil wrote in a recent Harvard Business Review article.

The COVID-19 pandemic is an example of how events can escalate quickly across any geography, at any time, requiring businesses to improve their level of global awareness. Supply chain practitioners at every level—from the boardroom to the warehouse floor—need reliable and comprehensive real-time information that is most relevant to their business needs, so they may assess a situation and mobilise effectively. Much of that information is now available in the public domain, and can provide precious additional time required to make sound decisions.

In fact, early signals in public information detected by artificial intelligence (AI) provided a critical early warning to a current crisis. In late December 2019, rumors of a new respiratory illness began quietly circulating in central China. Dataminr’s real-time risk and event detection platform automatically surfaced such early online chatter, delivering its first alert about the virus on December 30. The alert served as a warning to clients that people appeared to be sick with SARS-like symptoms in Wuhan.

Government authorities were eventually prompted to issue a statement confirming that 27 people were suffering from viral pneumonia. Seven days after the first Dataminr alert was issued, the U.S. Centers for Disease Control and Prevention notified the public. Three days later, on January 9, the World Health Organization issued a statement. The disease would become known as COVID-19, caused by a highly contagious new coronavirus. 

As we now realise, the virus would quickly spread beyond the borders of Hubei province, a major manufacturing and transportation hub,  and beyond the borders of China, wreaking havoc on regional and global supply chains. 

Early indicators of this burgeoning global health crisis enabled companies to put their business continuity plans in motion with precious days and even weeks of lead time. They could look for alternative providers of raw materials or parts, establish work-from-home or other workplace arrangements for employees wherever possible, and advise customers in advance about expected shortages. 

Since the first days of the outbreak, highly valuable real-time information has surfaced across thousands of data sources, in multiple languages and formats, from more than 100 countries. But it is impossible for one person or team, on their own, to process such disparate information sources and extract what is most relevant for their supply chain operations. 

In a global market, where operations and customers are everywhere, businesses need to use a variety of approaches, mechanisms and tools to build a comprehensive, real-time view of events across the globe as they unfold. The current pandemic has roiled supply chains in a matter of weeks. One strategy to help enterprises mitigate risk effectively is making use of real-time alerts. Staying abreast of global and local events and their potential implications as they occur is the key to a more resilient supply chain. 

Using AI to understand data at scale and speed, coupled with more traditional supply chain management approaches, can help organisations establish wider and deeper awareness of emerging markets and specific sectors that affect their supply chains. This can lead to more proactive and effective decision making to keep goods and services moving in the face of disruptions.

Specifically, real-time alerting allows a business to function at the highest level of efficiency and deliver on its commitments to customers, all whilst remaining ever-vigilant to supply chain threats. 

Tackling the changing nature of retail with a well-prepared supply chain

By Ian Stone, CEO, Vuealta 

Debenhams, House of Fraser, Arcadia – these are just a handful of once-reliable High Street retailers and brand groups who now find themselves battling for their place on Britain’s high streets.

With shops closing at a rate of 14 a day, traditional high-street players are now facing unprecedented levels of competition from online and digitally-focused disruptors. But has the High Street really been crippled? Ultimately the answer is no, it’s simply being reinvented.

In fact, it appears that 62% of shoppers still prefer to shop on the high street, but their expectations have changed dramatically, and retailers need to buck their ideas up if they’re to meet them. As such, there has recently been a resurgence of interest in physical stores from industry giants, but in an entirely new and integrated way. 

It’s now more important than ever that retailers entice customers back into stores with refreshed and exciting takes on what the physical store really is – crossing the realms of digital and physical so customers can get the best of both worlds. That’s why, while many brands are already mastering the art of personalisation online, they’re now also using these data-driven insights on consumer behaviour to bring the same levels of customer experience and relevancy to the physical store.

For example, Amazon has introduced various initiatives from its four-star experience to Amazon Go, which cater to very specific demographics and consumer needs. But the changing nature of retail is moving at an unprecedented rate, making it difficult to keep up. To do so, brands need to begin making the most of their data to carefully map their supplychains and streamline costs.

Keeping up with evolving consumer demands 

Running a physical store is expensive. The property price boom in the UK has only recently reached its peak and May saw retailers suffer their worst month in almost a quarter of a century. To try and overcome these challenges, retailers like Amazon are returning to the high-street with smaller footprints to streamline their expenditures and offer more personalised experiences for their customers. Aldi and Lidl, for example, continuously change their stock depending on seasons and current trends in order to maintain reduced costs and keep their bargain hunting customers loyal.

But today’s customers expect instant gratification and ventures like this are fragile. They rely on a robust supply chain that can cope with consistently changing consumer demand, meaning these new types of stores can no longer rely on traditional supply chain structures. They need expert stock management with the ability to respond and adapt to change at speed – especially when it comes to peak shopping seasons like Black Friday and Christmas. 

The need to be agile in the digital age 

It’s ironic, but the answer to coping with the demands of these new stores lies in the digital technologies that are creating the need for them. In today’s digital age, consumer behaviour can change as a result of one Instagram post, and supplychains need an agile solution that can react just as quickly as the market changes and plan for likely peaks in demand – whether that’s with the ability to deliver more strawberries to Aldi’s Wimbledon store in July or hairdryers to Argos when the latest reality TV star posts an ad on their story.  

While data may now be considered the world’s most valuable resource, it has always been possible to access a variety of external and internal data sources to provide hard evidence to back up insights and assessments when developing plans. The real challenge has been being able to bring all that together, across internal silos and in varying formats, to form a cohesive and clear direction. Now, however, supply chains and their respective retailers have the ability to quickly connect and verify different data sources. By breaking down the silos, they can then access a clear view of what’s needed in order to formulate solid, evidenced-based plans.

That connection then allows supply chain organisations to rapidly harness data from a variety of sources to quickly formulate and adapt plans. That could be rerouting shipments into a distribution centre where demand is higher, deploying trucks and drivers to new shops, or updating promotions and stock availability if deliveries are delayed or demand outstrips supply. And streamlining this process can lead to significant competitive advantages.

The supply chain is the backbone of retail

The speed at which markets change today may appear to render long-term planning redundant, but it does the opposite. The key to keeping up with consumer demand ultimately lies in a well forecasted plan.

When retailers and supply chains plan for all their ‘what ifs’, including unexpected peaks and troughs in consumer demand, they’ll be prepared to respond to any changes that may otherwise expose their fragility and bring them to their knees. And when customers’ needs aren’t met, they will be quick to shout about it online, ultimately harming the business’ reputation. But when these unexpected, and expected, challenges are handled appropriately and responded to in adequate time, retailers can truly reap the benefits of increased sales. 

Planning isn’t a static process, and by no means has a simple beginning and end. If you’re starting out from a disjointed and siloed process, organisations need to be prepared to go through some level of trial and error initially, which will take time and multiple iterations before they get it right. But the end result will truly pay-off as companies will be able to access and collate critical data sources enabling them to reduce the impact of uncertainty and build realistic, actionable responses to all their potential ‘what ifs’.

Retailers and supply chains that do decide to take the planning leap will therefore be in a much stronger position when it comes to keeping their customers loyal by seizing all opportunities that will inevitably appear.

Why crunching data is not the same as making decisions

By Ed Crawford, Product Manager at Atheon Analytics

Many retail businesses feel that they are drowning in data, but also don’t have information in the right format to make it easy to use.

For many individuals in sales or supply-chain roles within the retail sector, much of their job involves downloading, manipulating and formatting data. But is this where the most value to the business lies?

Whilst obtaining and manipulating the data is just the first step,  it is probably what takes 90% of the time and effort – just to put a sales or supply-chain manager in the position where they can then start to apply their domain expertise.

Historically, the technology to automatically collect and manipulate data has been either difficult to use or financially unviable for many businesses, which meant that learning the basics of Excel was the only answer for most people. The ‘best’ analysts at the time were probably those with the best Excel skills rather than those able to interpret the data in the best way or make the best recommendations off the back of the data.

Even today, we hear endless stories about Category Managers spending their Sundays downloading data from retailer systems, just so they have enough time at 6 am on a Monday morning to get the bare minimum of insight together for retailers in time for 9 am meetings.

However, tools and techniques are now available that automate data collection and transformation, taking away all of the pre-analysis pain, leaving domain experts to do what they are paid for, making decisions with confidence.

Automated data collection and transformation means less time wrangling data, whilst combined with visualisation tools and techniques enables faster and deeper analysis. Because this complex data can be articulated quickly, in a way that can be easily understood – especially important when communicating to retailers – this can elevate FMCGs as category experts and build important collaborative relationships where all parties benefit.

Embrace change – I’m old enough to remember the sweet chimes of my 56k dial-up modem connecting me to the internet, something long passed and replaced by 1Gb fibre-enabled broadband – they both will connect me to the internet but I have no desire to spend time waiting to stream my favourite TV show or film.

Yet, in today’s age of 1Gb fibre-enabled broadband, traditional retailer data download processes are the equivalent of using a 56k dial-up modem. It is time to apply this same logic to FMCG data analysis. Let’s free our retail analysts to be able to analyse, not slow them down with tasks that in this day and age, are pointless and most definitely not necessary.

Service sector continues growth to reach three-month high

A survey commissioned by HS Markit has revealed improvement across the service sector, with the latest growth representing the fastest expansion for three months.

The sales volumes increase is attributed to completive pricing strategies, greater business investment and successful new product launches through the month of May.

However, the rise in new business volumes continued to struggle, with respondents admitting Brexit uncertainty a key factor in holding clients back on making decisions.

Parallel to this, tight labour market conditions creating pressure on staff wages and difficulty in recruiting suitably skilled workforce meant that the latest increase in service sector employment numbers was the second-weakest sonic march 2017.

The IHS Markit/CIPS UK Services PMI Business Activity Index rose to 54.0 in May, up from 52.8 in April, with the latest reading the highest since February. Service providers put this down to a number of values, with a catch-up from disruption caused by the weather and snowfall early 2018 alongside a sustained growth of new business.

Service providers signalled only a moderate rise in employment numbers during the latest survey period. Anecdotal evidence indicated that delays in filling vacancies had dampened the rate of job creation recorded in May, with businesses widely commenting on a lack of suitably skilled staff.

A combination of rising salary payments and greater fuel bills resulted in another strong increase in average cost burdens across the service sector. Despite a sharper rise in operating expenses, the latest data pointed to only a modest increase in average prices charged by service providers. Moreover, the rate of charge inflation eased for the second month running to its weakest since June 2017. A number of firms noted that competitive pressures and the need to stimulate demand through promotional discounting had constrained their pricing power.

Meanwhile, business confidence across the service sector moderated for the third time in the past four months. Weaker growth expectations were linked to potential Brexit-related issues for business projects over the coming year, alongside concerns that subdued consumer demand would continue to weigh on UK economic conditions.

Discussing the findings, Chris Williamson, chief business economist at IHS Markit, said: “The improvement in service sector activity adds to evidence that the economy is on course to rebound in the second quarter but, like the earlier manufacturing and construction surveys, raises questions about the outlook. So far, the three PMI surveys indicate that GDP looks set to rise by 0.3- 0.4% in the second quarter.

“However, disappointing inflows of new work suggest that growth could wane in coming months as Brexit-related uncertainty continues to weigh on spending decisions and dampen business confidence. Measured across all major parts of the economy, new orders growth in the second quarter so far is running at the weakest since the third quarter of 2016.

“Meanwhile, costs are being pushed higher by rising oil prices and wages, although subdued demand means firms are struggling to pass these higher costs onto customers. Average selling prices for goods and services showed the smallest rise for 11 months in May.

“The signs of economic growth rebounding in the second quarter will likely up the odds of the Bank of England hiking interest rates again in coming months, likely August, but with the forward looking indicators suggesting that the economy could relapse, a rate rise is by no means assured.”

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, commented: “It felt as though the sector was losing its lifeblood this month as Brexit worries continued to claw away at confidence, new orders and business margins. The survey revealed clients and consumers were reluctant to spend with one of the lowest rises in new orders in the last two years, and though overall activity increased, it was at a restrained pace.

“A further attack in the form of a sharp increase in costs for fuel and wages, had businesses stepping up with new products and investment to stay ahead of the game and to prevent even more costs being passed on to squeezed consumers. Businesses were also looking for quality staff to gain the edge on their competitors, but talent shortages and salary hikes dampened the scope for significant hiring this month which was at its second weakest since March 2017.

“The sector will be looking for an urgent dose of clarity and direction from policymakers with Brexit less than a year away, because without a sound pipeline of new work coming through this creeping slowdown could become a state of stagnation, or worse.”