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Consumers Demand Faster Delivery

Retailers with optimized distribution systems and enhanced supply chains will be at a competitive advantage in the coming year.

While supply chain and distribution costs are not necessarily rising, consumers increasingly expect faster delivery—at the same price points. This pressure is due to both increased consumer demand and competition from digital retailers with lower overhead. Smart retailers are investing in their supply chains to provide faster and more efficient fulfillment.

Forward-looking retailers are not only improving their distribution and supply chains—they are identifying alternative fulfillment methods and leveraging their existing real estate. A more distributed supply chain network may be warranted. Moving forward, retailers should consider dedicating more of their supply chain network space to fulfillment (e.g., customers buying online and picking up in stores) and shipment processing, incorporating digital, and advanced technologies for efficiency and to improve the customer experience.

Key Trend

We believe the opportunity for retailers is to leverage their existing physical store space through partnerships. Alliances that use the store-within-a-store concept not only enable the retailer to offer a wider range of products and services—they can expand customer reach and monetize existing real estate. The coming age of the eco-system has the potential to dramatically shift the face of brick and mortar retailing.