Guest contribution • 01.02.2017

The supply chain of the future: “Think globally, network regionally, act locally“

What effects does eCommerce have on the supply chains of brick-and-mortar stores? Professor Jörg Becker of ERCIS in Münster has an answer to this question

“Ebay marks the end of traditional retail“ – that was the title of a manager magazine cover in 2012. It is certainly true that the increasing digitization and technologization in all business practices and various areas also strongly affect the retail sector.

Thanks to eCommerce, global players like Amazon and Ebay and the prevalence of mobile devices make every product available at any time and any place to customers. But is it true that there is no longer a place for brick-and-mortar retail- your classic retail stores- in the retail model of the future and that established players need to close their stores? I would like to say this isn’t the case.

According to current statistics, there continues to be a variety of products that customers still prefer to buy “on the spot“ versus ordering them online or buying them by mail delivery. This applies especially to food items but also clothing, drugs, home improvement products or higher priced products like furniture, jewelry or watches.

Prof. Jörg Becker sees the future of in-house trade in the advantages of the...
Prof. Jörg Becker sees the future of in-house trade in the advantages of the regional orientation.
Source: ERCIS

The logical conclusion is that despite the diverse choices that are available in eCommerce – Amazon already offers a multitude of (non-perishable) food items – classic retail will continue to have its place.

In times of multichannel and omnichannel, intelligent networks and ubiquitous data acquisition, many retailers are now inevitably confronted with the decision of whether their business should have a global or local focus in the future.

This doesn’t just apply to sales which increasingly gain “globality“, especially thanks to online stores, but also the procurement of goods. Are you better off buying globally and at (for the most part) more attractive prices? Large B2B platform like the Chinese provider Alibaba, for example, offer extensive options. Or should you instead procure the items locally or regionally to realize shorter delivery routes and on-site quality control?

In addition to the mentioned criteria, a number of other factors like the perishability of foods play a crucial role in this. Even if the global supply chain has an increasing influence on the actions of companies, it doesn’t mean that only global procurement will endure in the future. Far more than a trend, these types of changes need to be regarded as (waves of) demand. Even though from the customer’s perspective, everything “must“ be available at all times, regionality – especially in the food industry – has experienced a renaissance in recent years fueled by trends like veganism and vegetarianism, health awareness and sustainability.

In contrast, a different picture emerges in consumer electronics for instance, where customers and subsequently also retailers largely rely on items from major foreign companies. These and many other product groups point out the necessary coexistence of globality and locality along the entire supply chain.

Think globally, network regionally, act locally.

This applies to both small and large companies. The adaptability of companies will be crucial in all three aspects. Companies that use the globality of the market and are able to fall back on strong regional networks and that adapt to local conditions as much as possible will be successful.

In the future, a number of new- data-driven- methods and techniques will be added to the established retail methods which aim to make this possible. Having said that, only those who know how to use them purposefully will be successful.

That’s why manual orders will continue to be side by side with fully automated processes and forecast formulas, as well as real-time inventory. Retailers will continue to order directly from wholesalers or manufacturers, and showrooms, as well as online distribution channels, will be utilized. Retail business types like warehousing and third-party transactions or systems like central billing and processing will also stand the test of time.

The world is becoming more colorful. Nothing goes away but everything is added to it.

Author: Prof. Jörg Becker

related articles:

popular articles:

Thumbnail-Photo: Southeast Asian online and offline health and beauty partnership...
06.02.2021   #online trading #e-commerce

Southeast Asian online and offline health and beauty partnership

Grab brings beauty products from over 2,200 Watsons stores to customers’ doorsteps

A.S. Watson Group, an international health and beauty retailer, and Grab, Southeast Asia’s super app, announced the largest O+O (online and offline) health and beauty partnership in Southeast Asia, spanning across six Southeast Asian markets ...

Thumbnail-Photo: The Citizen CT-E651L :  two-in-one label and receipt printing...
04.03.2021   #printers #label printers

The Citizen CT-E651L : two-in-one label and receipt printing

Compact, dynamic and stylish design with outstanding connectivity

Say goodbye to manning separate printing solutions for label and POS as global specialist printer manufacturer, Citizen Systems, announces the all-new CT-E651L label and POS printer. Derived from the successful CT-E651 POS printer, the CT-E651L is a ...

Thumbnail-Photo: Successful co-op association has the largest profit in the country...
24.12.2020   #electronic shelf labels (ESL) #price labelling

Successful co-op association has the largest profit in the country

The local Kvickly store has found the recipe for making profit. In the future, even more energy will be spent on customers and staff members

Electronic shelf labels play a crucial role here.

Thumbnail-Photo: Danish supermarket chain implements ESL in all stores...
10.02.2021   #electronic shelf labels (ESL) #price labelling

Danish supermarket chain implements ESL in all stores

The chain is investing in modernization and more digital initiatives

The privately owned, Danish supermarket chain Løvbjerg is doing well, and has experienced a great development in 2020 with a 18% growth. The chain is therefore also investing in modernization and more digital initiatives. Most recently, ...

Thumbnail-Photo: A completely new experience at ICA Kvantum with Breece...
15.12.2020   #electronic shelf labels (ESL) #price labelling

A completely new experience at ICA Kvantum with Breece

ICA Kvantum in Lerum has invested in new technology: A cloud-based electronic shelf label

ICA Kvantum Lerum has for a long time been looking for a supplier of electronic shelf labels (ESL), so the staff no longer have to spend time and resources on changing paper shelf labels. It was important that it should be a ...

Thumbnail-Photo: The 6 technology trends affecting the security sector in 2021...
15.01.2021   #security #brick and mortar retail

The 6 technology trends affecting the security sector in 2021

The trends are shaped by how and why technologies are used

It’s useful when looking forward to first look backward: hindsight has a wonderful way of providing context for future-gazing activity. And when looking back over the past year, one insight could understandably be that attempting to predict ...

Thumbnail-Photo: The rise of the virtual fitting room with the corona pandemic?...
30.11.2020   #fashion #virtual reality

The rise of the virtual fitting room with the corona pandemic?

Trying on clothes via AI, AR or VR

The rising usage of smartphones is expected to take the virtual fitting room market to $19,250.4 million by 2030, from $3,128.6 million in 2019, at an 18.5% CAGR between 2020 and 2030.A virtual fitting room is a digital representation of a fitting ...

Thumbnail-Photo: Checkout-free hotel convenience store in Yokohama, Japan...
17.02.2021   #self-checkout systems #self service

Checkout-free hotel convenience store in Yokohama, Japan

Using biometric authentication technology

Zippin announced the launch of its latest retail format: a hotel convenience store. Zippin's partner, Fujitsu, the leading systems integrator in Japan, has worked with Koyo Group to implement the world's first checkout-free store within a ...

Thumbnail-Photo: How do technologies find their way into retail?...
17.03.2021   #brick and mortar retail #self-checkout systems

How do technologies find their way into retail?

Rolf Schumann, CDO of the Schwarz Group, provides answers at the "Retail Innovation Days"

Tech is cool! Gimmicks, gadgets, gizmos – they impress and inspire quickly. However, it often takes much longer than technology experts and developers initially predict before the technologies actually arrive in everyday life and are used by ...

Thumbnail-Photo: Vending machines: Customers alone in the store...
18.01.2021   #sales promotion #food retail

Vending machines: Customers alone in the store

Combi City-Markt makes round-the-clock shopping possible – without staff

Shopping after closing time? That’s possible at the Combi City store Bünting in Oldenburg. At the 24/7 vending machine, late at night shoppers have the opportunity to stock up on everything they need from the supermarket's ...

Supplier

EuroShop
EuroShop
Stockumer Kirchstraße 61
40474 Düsseldorf
CCV GmbH
CCV GmbH
Gewerbering 1
84072 Au i.d.Hallertau
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn
GMO Registry, Inc.
GMO Registry, Inc.
Cerulean Tower, 26-1 / Sakuragaoka-cho, Shibuya-ku,
150-8512 Tokyo
Citizen Systems Europe GmbH
Citizen Systems Europe GmbH
Otto-Hirsch-Brücken 17
70329 Stuttgart
Reflexis Systems GmbH
Reflexis Systems GmbH
Kokkolastr. 5-7
40882 Ratingen
Axis Communications GmbH
Axis Communications GmbH
Adalperostraße 86
85737 Ismaning
HappyOrNot
HappyOrNot
Innere Kanalstraße 15
40476 Düsseldorf
Delfi Technologies GmbH
Delfi Technologies GmbH
Landgraben 75
24232 Schönkirchen
APG Cash Drawer
APG Cash Drawer
4 The Drove
BN9 0LA Newhaven