Retail Supply Chain Report

Retail Supply Chain Report A brief analysis of eyefortransport’s recent survey 2012 For further details, please contact: Tara Khan, eyefortransport w...
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Retail Supply Chain Report A brief analysis of eyefortransport’s recent survey 2012

For further details, please contact: Tara Khan, eyefortransport world phone: +44 (0)207 375 7178 US Toll Free: 1 800 814 3459 Ext. 7178 Canada Toll Free: 1 866 996 1235 Ext. 7178 [email protected]

Retail Supply Chain Report 2012

Table of Contents I. Introduction ...................................................................................................................... 3 II. Methodology and Approach ........................................................................................ 4 III. Profile of Respondents ................................................................................................... 4 IV. Retailer Expectations and Concerns ........................................................................... 5 V. Outsourcing and Investment ......................................................................................... 6 VI. Conclusions .................................................................................................................... 9

List of Charts Annual Revenue ................................................................................................................. 4 Geographic Location ........................................................................................................ 4 Expected Performance for Retail Sector .......................................................................

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Biggest Supply Chain Concerns ....................................................................................... 5 Top Supply Chain Priorities ................................................................................................. 6 Quantity of Outsourcing to 3PLs ........................................................................................ 6 Difficulties in Seeking 3PL Partners ...................................................................................

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Planned Investment in Supply Chain Technology ......................................................... 7 Forecasting Capabilities ..................................................................................................... 7 Perspective on Engaging in Horizontal Collaboration .................................................. 8 Drivers for Horizontal Collaboration .................................................................................. 8 Respondents' Future Career Plans .................................................................................... 9

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Retail Supply Chain Report 2012

1. Introduction Retailers have been dealing with a tough market for several years, and with consumer confidence and growth prospects still shaky at best, supply chain executives in the industry are facing an on-going uphill battle. In spite of the diversity in retailer profile and product offering, shared trends can be found among retail supply chain executives in terms of assessing the challenges they are facing for 2013. Weakening demand, multichannel expansion and intense competition all result in increased pressure to cut costs, boost efficiency and synchronise supply chain with overall business strategy. This report collates the survey responses from top retail supply chain executives and presents a snapshot of their perspectives on the industry. It highlights their key supply chain priorities for 2013 and gives an insight into how the retail market is changing and what supply chain executives need to do to keep up. Together with the counterpart reports – FMCG Supply Chain Report and Retail & FMCG Supply Chain Report – Logistics Service Provider Perspective, the results offer a unique snapshot of where the Retail & FMCG industries stand at this fascinating time. The challenges and trends highlighted in the findings below will be discussed further at eyefortransport’s 3rd Retail & Consumer Goods Supply Chain Summit, Dusseldorf, April 11-12 2013. Complimentary passes are available for qualified senior retail and consumer goods supply chain professionals. Passes are strictly limited, however, so if you are interested in joining us there then please contact Tara Khan ([email protected]), +44(0)207 375 7178.

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Retail Supply Chain Report 2012

II. Methodology and Approach This survey was conducted in September / October 2012 with responses solicited by targeted e-mail lists, select trade association memberships, various related-industry databases and other targeted methods. No individual responses were analysed, but rather all responses were consolidated.

III. Profile of Respondents 67% of respondents represented companies with annual revenues of more than $1 billion.

The majority of respondents were based in Europe (79%), though 12% were based in North America.

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Retail Supply Chain Report 2012

IV. Retailer Expectations and Concerns Although expectations surrounding retail sector growth remain fairly conservative overall, this year respondents appear more positive than they were last year, with 57% predicting that the sector will grow in the next 12 months (total respondents predicting either fast or slow growth). This is in stark contrast to last year’s results which highlighted retailers’ more modest expectations, with only 37% anticipating sector growth.

Respondents identified their biggest supply chain concerns as a general weakening of demand (48%), fuel costs (45%), and multichannel impact on supply chain (45%).

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Retail Supply Chain Report 2012

Respondents also identified their top supply chain priorities for the coming year, with lowering overall supply chain costs (55%) the most common response. Aligning supply chain and business strategy and expanding multichannel capabilities saw a notable increase from last year in the number of respondents considering them a priority, with multichannel expansion climbing from 8th to 3rd place on the list.

V. Outsourcing and Investment The survey also looked at the percentage of logistics needs that are currently outsourced to 3PLs, with 45% of respondents outsourcing over 75% of their logistics.

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Retail Supply Chain Report 2012

High cost (52%) and 3PLs unable to provide enough visibility (48%) were seen as the biggest difficulties that face retailers, when seeking 3PL partners.

When asked to identify their ONE top priority in terms of supply chain technology investment, ERP (26%) and warehouse management (23%) emerged as key focus areas.

Forecasting emerged as an area where there is considerable scope for improvement, with a significant proportion of respondents rating their forecasting capabilities as average, below average or poor.

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Retail Supply Chain Report 2012

53% of respondents have engaged in horizontal collaboration (up from 23% last year), while 30% are considering it (down from 51% last year). The number of respondents not considering engagement in horizontal collaboration has also decreased slightly.

Improving overall efficiency (68%) and cutting distribution costs (55%) were seen as the biggest drivers encouraging retailers to consider horizontal collaboration. Cutting transport costs (36%) and enhancing customer service (32%) were the next largest factors.

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Retail Supply Chain Report 2012

Respondents were asked to identify their ideal next career step. 29% would like to see themselves move up ranks in their current company, while 29% would like to stay in supply chain but move to the FMCG sector, and 26% would like to stay in their current role.

VI. Conclusions The retail industry has had a difficult time in recent years and, even though this year’s respondents indicate the situation may be gradually improving, there are still numerous challenges ahead. Slow growth, weak demand and high fuel costs are a tough combination to handle, and on-going developments in multichannel retail are putting new pressures on supply chain departments. Considering the current climate, it is unsurprising that lowering supply chain costs was once again rated the top priority for retail industry executives. An increased focus on aligning supply chain and overall business strategy also emerged, perhaps suggesting that the role and importance of the retail supply chain is being reassessed. It is clear that, in order to survive a highly competitive market and lay the foundations for continued success in 2013 and beyond, retailers must make their supply chains work hard for them. Efficiency improvements, cost cutting measures, robust multichannel strategy and a greater drive towards cementing the supply chain’s central role in an organisation will all prove decisive in the bid to win the retail race.

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Retail Supply Chain Report 2012

Want to learn more? Get the lowdown on supply chain survival tactics and drive growth in a tough economic climate. The 3rd Retail & Consumer Goods Supply Chain Summit (Dusseldorf, April 1112) will explore the real issues supply chain professionals are getting to grips with now, including techniques for enhancing visibility and improving flexibility, risk management, supply chain collaboration, and investing in people to build a future ready supply chain. Plus, for the first time, the impact of multichannel retail on the supply chain will be examined in a dedicated forum exploring topics including distribution network optimization, e-fulfilment and flexible delivery and collection options. It’s your prime opportunity to hear key insight from leading retail and consumer goods supply chain decision-makers. Join your peers to tackle the top issues facing your company and make sure you stay one step ahead of your competitors. Complimentary passes are now available! If you are a senior supply chain executive working at a retailer or consumer goods manufacturer you could qualify for a complimentary pass. Passes are strictly limited, so apply now to make sure you don’t miss out. For more information on the Retail & Consumer Supply Chain Summit please contact: Tara Khan ([email protected]) or head to the event website for more information.

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Retail Supply Chain Report 2012

About eyefortransport Established in 1998, eyefortransport has become one of the leading providers of business intelligence, independent research, news and executive level events for the supply chain & logistics industries. eyefortransport has two primary focuses: 1) To provide executive networking opportunities in the supply chain & logistics industries via the more than 15 events we annually organize and host in North America, Europe and Asia and online via the tens of thousands of users of www.eft.com. The events are designed to complement and enhance the business connections available through our online network, and bring together the industry elite. Regularly attended by CEOs and senior management from the transport and logistics industry and Heads of Supply Chain of major companies, the events focus on current developments and latest trends, and are enhanced by high level, exclusive networking opportunities. 2) To deliver industry education through dozens of industry reports, surveys, newsletters, webinars and senior-level presentations at leading events. For the list of current research, news and conferences we produce please visit www.eft.com

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