This time last year, at the UKWA’s National Conference in Chester, we brought together supply chain directors from major brands to discuss transformational changes within the logistics sector. At that point, the feeling was that 3PLs and their customers were pretty well aligned in understanding the challenges and opportunities ahead, which were largely being driven by digitalisation and the rise of e-commerce.
A year later and so much has changed. A global pandemic, three national lockdowns, ‘non-essential’ retailers and manufacturers effectively closed for the duration with the high street in freefall and, of course, the consequent super-acceleration of online shopping.
These changes have massively re-shaped the world of retail logistics. Existing e-commerce giants, such as Amazon, Boohoo and ASOS have seized the day and are booming, but traditional retailers have had to find new ways to get stock to their house-bound customers, whether using stores for ad-hoc fulfilment and click-and-collect centres or, as with the supermarkets, investing in new warehousing and expanding delivery fleets.
Suffice it to say, retailers are looking at radical new strategies for serving their customers going forward. Such changes include massive reconfiguration of their logistics networks to move stock closer to consumers, improve agility and meet delivery expectations. Multiple SKUs in multiple locations are needed, along with increased inventory. Few have appetite for either the investment or the disruption associated with bringing this ‘in-house’ and are looking to their 3PL partners to take up the challenge.
Necessarily, 3PLs will need to be properly prepared for data integration – making the transition from legacy B2B systems to interfacing with consumers on behalf of the retailer, and ensuring that robust risk management and security systems are in place to protect that data.
Brexit obviously has added another layer of complexity and some retailers are already looking at the possibility of either opening a DC in Europe, or alternatively finding a European partner.
The question is, in the light of all this change, are 3PLs ready to step up? A year on, has the gap between 3PLs and their retailer customers widened, or are they still ‘on the same page?’ To answer these questions and more, UKWA will be hosting a virtual forum, with a high powered panel of speakers from leading logistics users, including Urban Outfitters, Pentland Group, John Lewis and Mercedes Benz. The event will take place on Weds 3rd March from 11.30am and is free to attend.
If our industry fails to listen to the changing needs of retailers or proves unable to take advantage of emerging opportunities, we face a real threat. Rather than logistics being the new retail, we may instead see retail becoming the new logistics, as retailers enter the realm of 3PLs.
2021 is the year to be not of just reacting to the structural shifts accelerated by the pandemic, but capitalising on them to support our retail customers and ensure they – and we – are fully prepared and fit for the future.