Is Retail Growth Ready to Accelerate in 2012?

Supply Chain Organizations Must be Prepared to Support Growth

Is 2012 the year that the retail sector makes a strong push and returns to moderate or high growth? Though it is too early to tell, there are positive signs out there. If retail growth does return, retailers must be ready to take advantage of this by having their supply chains finely tuned and ready to support the growth. The following are five top trends for retailers to be aware of in 2012.

Focus on Best Practices: Best practices can have significant impact on a retailer’s bottom line, as well as the service to their customers. Leading practices in sourcing, transportation, inventory policies, and distribution will provide significant value and increase competitive advantage. Those retailers who have been ignoring their supply chains and have made few improvements in the last several years are being beaten by retail leaders who have focused on best practices.

Improve Speed to Market: Retailers around the world are striving to reduce the amount of time between product design and placement on a store’s shelf. Competition, consumer taste, and trends all increase the need for speed to market. To improve speed to market, design effective and efficient supply chains – from planning through transportation to the destination.

Exploit E-Commerce: Consumer sophistication, consumer behaviors, ease of access, and retailer incentives all boosted online sales. Online sales will continue to grow in 2012 and will become a much bigger focus for retailers as online becomes a bigger portion of the overall business.

Pursue China as a Market: The retail markets for fast-moving consumer goods (FMCG) and luxury items are growing. Retailers who previously only sourced in China now want to enter the world’s fastest growing economy and sell in China. It is important for retailers to understand the market of Chinese consumers and plan smart entry strategies. Many of the leading retailers are already doing significant business in China and are expecting continued growth in 2012.

Have a Demand-Driven Supply Chain: Many leading retailers are converting to demand-driven supply chains where the focus is on meeting the demand of consumers and collaborating with suppliers to most effectively meet that demand. The power of the demand-driven supply chain (DDSC) is really compelling: It both increases product availability and inventory turns while reducing cash-to-cash cycle times and costs to serve. Four major transformations occur in moving to a DDSC: First from push to pull; then from a link strategy to a chain strategy; third, from capturing sales data to really using this data; and lastly, from poor supply chain visibility to synchronization.

By following these five trends, retailers will be positioned to emerge as industry leaders when the retail sector returns to strong and healthy growth.

© Tompkins International, Inc., All rights reserved.