Supply Chain News / 3PLs & 4PLs / Economic Development

Retail is Transforming Distribution Networks

With 92 percent of retailers selling online, 68 percent maintaining brick-and-mortar stores, and 64 percent utilizing catalogs, retailers are embracing a multi-channel approach to meet buyer expectations and battle for market share, according to Jones Lang LaSalle’s latest report, “Retail 3.0: the evolution of multi-channel retail distribution.”

In addition, nearly 80 percent of retailers state that online sales have increased in the past five years with some reporting increases of 25 percent or more. This has forced retailers to change the traditional distribution network for their e-commerce models.

The influx of e-commerce and m-commerce (mobile) has revolutionized the retail sector. Smart retailers are tapping multiple channels to sell their merchandise – from traditional stores, by catalog, through the internet and increasingly via smart phones and tablets. Technological advancement means that the store is now everywhere, in consumers’ pockets, at their homes and at the mall.

“With multi-channel selling comes a major focus on retail distribution, and how to get from ship to shore to store or your door as quickly and as efficiently as possible.” said Kris Bjorson, head of Jones Lang LaSalle’s Retail/e-commerce Distribution Group. “Traditional retailers must support the delivery of merchandise and manage both in-store and online inventories and shipments at a frenetic pace against the backdrop of intense competition from pure e-commerce rivals.”

“Blending new shopping channels has forced retailers to simultaneously add complexity and flexibility into their supply chains while striving for greater efficiencies,” continued Bjorson. “They have to reconsider their store footprints and total inventory levels. We’re seeing that in each sector one retailer is evolving e-commerce faster than others. They are adding to their e-commerce infrastructure while trying to optimize their store footprints.”

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