We are constantly told to watch the market and keep ahead of the emerging trends but what exactly are the trends in the world of TMS? What changes are coming and what should you look out for?
Consumer shopping habits are shaping the industry more than ever today. With more of us doing smaller, more frequent shopping trips, smaller local stores are proving that size isn’t everything and that they have a rapidly growing importance to consumers. Retailers, recognising this trend, are ploughing significant investment into their smaller outlets which is presenting logistical challenges for store suppliers. Often stores have little or no storage for stock so deliveries are needed more frequently to keep the shelves fully stocked. Shelf replenishment in my local store is seemingly constant with store staff always on the move, positioning trollies and frantically re-filling shelves to meet customer demand.
Smaller stores are usually located in convenient, densely populated places such as city centres, railway stations or housing estates, perfect for us consumers to get to on foot or by car but less perfect for large vehicles to access and unload. And if they can get to the deliveries entrance they are likely to have to work around road restrictions, time slots or even road tolls and congestion charges. These are all factors that will, if not managed carefully, steadily erode a retailer’s profit margin.
The Amazon effect is shaping our buying habits too. We don’t want to wait for our delivery, we want a large choice and we don’t want to hunt around loads of shops looking for that specific book or item when we can get exactly what we need with a couple of taps on our smart phone. However, rather than be threatened by this competition, forward-thinking retailers are fighting back. Asda is one such retailer having started a unique collect and return service called “toyou” which allows customers of Asos, Decathlon, prettylittlething.com and many other third-party retailers to collect and return goods from Asda’s UK stores. The rapid rise in click and collect transactions is clear evidence that not all consumers want to wait at home for their deliveries and when they pop out to collect them they are likely to pick up a few additional items of shopping at the same time. Asda anticipates that the increased footfall generated but its toyou service will increase its revenues by £40m by 2019, proving that a creative logistics-driven service can actually generate revenue. Now who would have thought that possible 10 years ago?
For more interesting insights have a listen to this interview with Mark Vos. Mark has over 15 years industry experience and talks to Talking Logistics about the trends and challenges in the European transportation market.