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Four trends helping retailers thrive in an online environment

Full report: The True Cost of Online Retail

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This work forms part of a wider piece of research and is a downloadable in pdf format


3. Supply chains & logistics

As a greater proportion of sales migrate online, supply chain optimisation becomes increasingly important for maximising profitability. Retailers will have to carefully consider the implications of the channel shift for end‑to-end supply infrastructure and planning.

The step-change in online volumes is likely to introduce inefficiencies across  operating models that will need to be quickly resolved to stem the erosion of profits. Some of the key themes will include:

Data and technology: Part of the  solution involves intelligent use of data and technology. Whether developed internally, or through third-party suppliers, technology can drive improvements in demand forecasting and inventory management processes which can drive efficiency, reduce waste and improve  stock availability. 

Packaging: Re-engineering packaging for ecommerce (e.g. reducing weight, compacting package shapes to boost delivery success) can also lead to incremental improvements in profitability.

Final mile delivery: Partnering with final mile delivery specialists has become commonplace as it involves high infrastructure costs to service online efficiently at scale. 

Returns: Dealing with elevated levels of online returns will also force retailers to explore partnerships in reverse logistics. 


4. Direct to Consumer (DTC)

As retail progressively shifts online, brands have more opportunities to sell direct to customers, facing fewer barriers to entry than physical stores.

Brands have traditionally relied on retailers to act as intermediaries to distribute products, but this approach can create inconsistent shopping experiences, often leaving brands unable to harvest data to glean deeper insights into their final customers. Today, extracting insights has become critical to gain a competitive advantage.

Retail Direct to consumer (DTC) - Retail Economics

Brands with significant following are discovering they can foster existing relationships through social media channels to conduct more meaningful interactions with their customers. DTC models have flourished during the pandemic as ecommerce penetration reached new heights.

But why are these measures necessary and what is driving them? Explore the first article in this series, which outlines the true extent of the shift to online that has been accelerated by the Covid-19 pandemic.


Things to do now

Discover the true extent of the shift to online that has been accelerated by the Covid-19 pandemic here.

Download the full report here

Found this short article interesting?

This short insight article forms part of a thought leadership report entitled “The True Cost of Online”. It was produced by Retail Economics in partnership with Alvarez & Marsal and looks at the impact of Covid-19 and the accelerating shift to the online retail channel across Europe.

View Full Report Here

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