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Five key factors impacting retail supply chain dynamics

Full report: Covid-19 and the Future of Retail Supply Chains

Five key factors impacting retail supply chain dynamics

3 minute read

Prior to COVID-19, international supply chains were already in transition. Increasing pressure over Environmental, Social and Corporate Governance (ESG), the impact of technology, Brexit and increasing geopolitical volatility underscored the importance of supply chain security.

This is the second of four short articles in our series, based on our report entitled ‘Covid-19 and the Future of Retail Supply Chains’. It takes a brief look at five key themes that will drive shifting supply chain dynamics as the pandemic recedes.

Businesses are being forced to reassess the future of their supply networks and how they can not only meet Covid-19 related challenges, but simultaneously address underlying structural challenges to ensure they are future-proofed.

 

Five key factors underlying shifting supply chain dynamics

Five key factors underlying shifting supply chain dynamics - Retail Economics

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The five key factors impacting retail supply chains

Retail supply chain process - Retail Economics

Factor 1: Covid-19

The impact of COVID-19: COVID-19 has highlighted the fact that globally dispersed and complex supply chains are only as strong as their weakest link. As businesses assess the impact of the crisis and future gaze, new supply chain strategies are emerging as industries adjust to the new normal. Strategies are likely to involve using shorter, more flexible and resilient supply chains better equipped to deal with supply shocks, but also address rapid changes in consumer behaviour witnessed in recent months.

Factor 2: Brexit

Brexit: Considerable uncertainty remains over the future relationship between the U.K. and the European Union (E.U.). Whatever the outcome, there will be significant repercussions for supply chains for European retailers, particularly those U.K. based. After all, the E.U. is the U.K.’s largest trading partner, accounting for approximately half of both imports and exports of goods. Supply chains between the U.K. and the EU are highly interwoven throughout the entire retail industry.

Factor 3: Geopolitics

Geopolitical environment: Rising tensions between the U.S., China and the E.U. have created considerable uncertainty within the international trade environment, impacting foreign direct investment and influencing supply chain strategies for many international businesses.

 

What barriers are stopping you from shifting your supply chains to your domestic economy?

barriers stopping shifting supply chains to domestic economy - Retail Economics

Source: Retail Economics

 

Factor 4: Sustainability

Sustainable supply chains: Early in the pandemic, apparent concerns around sustainability were at risk of falling to the wayside as firms focused on survival. However, as the initial shock resided, businesses and governments are considering how to build back better, with sustainability playing a major role.

Factor 5: Technology

Technological advancement has revolutionised supply chains in recent years. The drive towards efficiency has streamlined supply chains, from warehousing robotics and autonomous ships to computerised shipping and tracking. Whether it’s greater efficiency, better communication or enhanced transparency, the supply chain continues to evolve at pace, and the role of technology is central to future development.

To find out more about how retailers can go about gaining the most from these drivers, please download our full report, or explore the next article in the series, which looks at the impact of on-shoring.

Things to do now

Explore the next article in this series on retail supply chains here.

Download the full report here

Found this short article interesting?

This short insight article forms part of a thought leadership report entitled “Covid-19 and the Future of Retail Supply Chains” produced by Retail Economics. It explores industry structural changes and contextualises the impact of Covid-19 on supply chains across the European retail industry. For retailers and brands seeking valuable insight into the impact of the crisis across Europe, the full report provides data-driven insights and guidance for action.

View Full Report Here

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