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Retail supply chain - statistics & facts

The retail supply chain defines all the logistics operations put in place by retailers to deliver products to end consumers. Before the actual sale of products, retailers run regular inventories, assessing the value of merchandise available in stores over a given period. In this process, the inventory-to-sales ratio well describes the relationship between the amount of available inventory and monthly sales performed by retailers. The measures imposed during the coronavirus (COVID-19) pandemic affected the retail supply, leading to higher rates of out-of-stock and overstock of consumer goods. The global inventory distortion related to out-of-stock grocery products was valued at over five hundred billion U.S. dollars in 2020. While retailers might have struggled with inventory distortion costs at store level, manufacturers carried even higher costs for disrupted demand.

The retail supply chain has become more complex because of online commerce. Because of different fulfilment models, consumers can order through online channels and opt for in-store collecting or home delivery. In the United States, click-and-collect sales increased over the last few years and are projected to grow further in the future. As the COVID-19 pandemic ignited the e-commerce demand, fulfillment costs suddenly increased for merchants. In this more competitive scenario, retailers are challenged to shorten delivery times and lower delivery costs.

The described omnichannel services are expected to attract increasing investments. According to retail supply chain executives, a greater flexibility and planning setup is among the top investment priorities. Micro-fulfillment seems to be the key to a more flexible retail supply chain. Order fulfilment will be downsized to store scale, as retail stores will account for most new installation centers planned for the next years. Further insights clearly showed that in-store fulfillment will be the core of retail supply in the near future, at the expense of deeply-centralized distribution.

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Retail supply chain

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