Will the Retail Apocalypse End in 2018?

Simon Eskow Supply Chain Articles Leave a Comment

Here’s a New Year’s resolution this writer can keep. In 2018, we’ll stop talking about retail as if brick-and-mortars will all tumble down. First, this is hardly the case. Secondly, it never was the case. True, technology changed consumer behavior. Specifically, big retail chain can’t rely on products flying off the shelf to cover their bills. But that’s a question of a supply chain model that has run its course. What businesses do after the retail apocalypse will make for an exciting new period for retailers.

The Renaissance After the Retail Apocalypse

As one writer points out, 2017 saw the term retail apocalypse enter the popular lexicon. However, while most focus on the nearly 7000 retail closures in the US, they neglect the 3000 stores that have opened. In short, there’s no scorched earth where the stores used to be. What comes next has to do with what a retailer sells and how they manage their supply chain to satisfy their customers.

Some Chains Grow on Product

Big retail chains illustrate how your supply chain model and what you sell determine brick-and-mortar success. For example, among big US retailers, discount and off-price chains buck the retail apocalypse narrative. Low-cost fashion labels and discount consumer products draw enough foot traffic to justify the expense of a supply chain that includes a relatively large brick-and-mortar footprint.

Others Rethink Their Supply Chain

While low-cost retail chains grow, others have had to reimagine their supply chain for the omnichannel to compete with the likes of Amazon. Perhaps no business illustrated that this year than WalMart. It developed a click-and-collect strategy, for instance, to make their physical stores more like mini-fulfillment centers. Moreover, they put a huge investment in their eCommerce. In short, they made their supply chain more responsive to the demands of the omnichannel.

A New Kind of Retail For All

So what does the future hold for other brands after the retail apocalypse? The emerging role of the brick-and-mortar comes down to a supply chain for omnichannel fulfillment. Thus, instead of aisles and aisles of products, we’ll see more stores with small footprints that give customers a superior product experience. Also, we’ll see more showrooms that require little stock on hand but can still fulfill an order to dispatched from a warehouse. Lastly, we’ll see stores that do not rely on high-volume sales, but can serve as mini-depots for fulfillment of online orders. And we will see more businesses adopt platforms to manage stock and fulfillment for omnichannel orders.

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