Blog: Michelle RussellAgile logistics key to new hybrid retail world

Michelle Russell | 3 August 2017

US retail giant Walmart has topped a list of the fastest growing retailers thanks to its investment in ensuring it has the right balance between its online and brick and mortar operations.

Also appearing in the list are Ascena Retail Group, Target, H&M and Amazon. Online companies make up six of the top ten companies, but the majority of retailers on the National Retail Federation’s Store magazine ‘Hot 100’ list are either traditional retailers or retailers that sell both in-store and online. Fewer than ten companies are pureplay e-commerce.

But while store-based sales still overwhelm e-commerce, the scales do appear to be tipping. Amazon crept up to seventh place, with sales up 25% to US$77bn in 2016. The online retailer has been growing its presence in fashion and footwear in particular, with a number of recent deals and the launch of its Prime Wardrobe "try before you buy, and only pay for what you keep" service.

Amazon to offer "try before you buy" service

Department store retailers also appear to be a dominant presence on the list with Macy’s, Sears, JCPenney, and Kohl’s all making an appearance.

Ray Gaul, vice president of research and analytics with Kantar Retail, which compiled the ‘Hot 100’ list, says the industry is witnessing a transformation in which the physical environment now needs to serve three shopper missions rather than one: the old shopper mission where the consumer discovers products, selects the products and then transports the products home; buy online and pick up at store; and product information.

“These will require two things…store remodels and store closings, or both, and a new economic model to cover costs and deliver profits,” Gaul says. “Companies that have embraced this new way of shopping have begun to deliver better profit per square foot than companies that have not.”

Shopping centre owner Starwood Capital Group’s Barry Sternlicht believes “retail will rebalance” and be “smaller but healthier in five years.”

Supply chain logistics are a key to this new hybrid retail world, and Walmart got where it is today by investing in and constantly improving them.

The retailer has been spending a lot of resources on omnichannel, first entering into an alliance with China’s largest internet retailer JD.com, and then purchasing Jet.com for $3bn to broaden its US e-commerce operations. It has also made a raft of online purchases such as Moosejaw, Shoebuy, Modcloth and Bonobus, and launched a retail technology incubator, called Store No. 8, to nurture nascent businesses including the small e-retailers the company has been acquiring.

Now it is investing in logistics expertise.

“Walmart has the best planning software to schedule truck arrivals and departures, to track ships in the Atlantic and Pacific and air traffic,” Gaul says.

Walmart works to ensure that when consumers shop online, they pay the lowest cost to get the product from its source to the final destination. E-commerce giants such as Amazon and Alibaba are “dominating discussion on ‘agile logistics,” he says. “However, there is still an opportunity for someone to develop everyday low cost agile logistics. This is a title that is Walmart’s to lose over the next ten years.”

Sectors: Apparel, Retail, Technology

Companies: Walmart

BLOG

Apparel sourcing rules under NAFTA 2.0

The new United States-Mexico-Canada Agreement (USMCA) – also dubbed NAFTA 2.0 – has finally been agreed, but what does it mean for apparel sourcing? Here we take a close look at the new apparel-specif...

BLOG

Trade tremours continue to reverberate

Following more than a year of talks, the United States, Canada and Mexico have reached agreement on a renegotiated North American Free Trade Agreement (NAFTA) – which will be called the United States-...

BLOG

New customisable options for consumers

Italian sportswear firm CP Company is looking to tap into the growing demand for customisable apparel with a 'Bespoke' project that allows customers to select their preferred colour in its signature g...

NEWS

Adidas recalls kids’ swimwear over safety risk

German sportswear company Adidas has announced a voluntary recall of children's swimwear products of the Infinitex 3-Stripe range due to a potential safety risk....

BLOG

Are fashion and sustainability out of step?

The global fashion industry is on a trajectory set to stretch planetary resources beyond breaking point unless it finds better ways of producing, using and disposing apparel....

just-style homepage



Forgot your password?