Inbound Logistics | August 2026

AND THRIVE 14

SUPPLY CHAIN MOVES TO HELP RETAILERS SURVIVE

1 RETHINK PHYSICAL STORES As retailers assess their customers’ omnichannel shopping habits, as well as their own labor and occupancy costs, they’re redesigning stores to better match their markets, says Lee Holman, lead retail analyst with IHL Group. Among other changes, some are moving to smaller stores, adding fulllment functions, and/or making stores more experiential. Some retailers use stores to forward deploy inventory. This can cut the time required to move products to customers, says Tim Schleeter, managing director, consumer retail practice and business transformation with FTI Consulting. 2 USE STORES TO LEVERAGE THE BRAND EXPERIENCE “Right now, technology cannot replicate the tactile and olfactory sensory engagement” that consumers can nd in physical stores, says Lauren Beitelspacher, marketing professor and associate dean, Babson College. Retailers need to make the in-store experience worth the trip. Black Barn Alpacas, for example, is creating a retail experience that connects customers directly to the product source—alpacas. The Shoppe by Black Barn Alpacas in Sykesville, Maryland, is part boutique, part storytelling space, and part extension of the company’s agritourism experience. “Our goal is to bring the farm experience into a Main Street retail setting,” says Yussy McManus, the company’s co-owner. Customers can engage with the story behind the ber, including the animals themselves and the sustainable farming practices that make alpaca ber such a special material. 3 DEVELOP A ROBUST, FLEXIBLE DISTRIBUTION NETWORK As more consumers shop multiple channels, exible distribution networks become even more critical. For example, the ability to ship products

THE CURRENT RETAIL ENVIRONMENT IS TOUGH. More than 4,100 stores closed or were set to close in 2025, Business Insider reports. Major retailers announcing closures include Joann Fabrics, Party City, Starbucks, Big Lots, and Walgreens. Several trends mean that supply chains and operations increasingly contribute to retailers’ success, or lack thereof. One trend is the blurring between physical stores and digital tools such as online marketplaces and social media platforms, or what some call “phygital.” More than 70% of shopping journeys begin online, even if the nal purchases occur in physical stores, says Eva Ponce, Ph.D., director of the MIT Omnichannel Supply Chain Lab. Retailers no longer manage separate physical and online channels; instead they operate complex, integrated omnichannel networks. As ecommerce sales continue to grow, and given the high rate of returns of goods purchased online, an effective approach to returns is becoming even more even more

need to establish processes that are both operationally efcient and easy for consumers. The rise of social media channels means there’s really “no direct path to purchase,” says Mark Mathews, chief economist and executive director of research with the National Retail Federation. The inspiration for a purchase can come from social media posts, blogs, videos, or by scanning QR codes, among other prompts. Retailers need to nd consumers, wherever they might be, and turn inspiration into a transaction that they can fulll quickly and intelligently. On a positive note, technology, and particularly articial intelligence (AI), can help the retail sector. For instance, AI and data analytics can help retailers better understand customer buying patterns, forecast demand, optimize inventory, and make smarter purchasing decisions, says Elie Y. Katz, president and CEO of National Retail Solutions, which provides point-of-sale services. Given the impact of these trends, retailers’ supply chains can become competitive differentiators. Taking the following 14 actions can help. Given the trends, retailers’ can become differentiators. the can

important, says Disney Petit, founder and CEO of LiquiDonate, which provides a sustainable solution for returns and excess inventory. Retailers and Retailers CEO which

Black Barn Alpacas oers a tactile sensory experience that connects shoppers directly to the animals and sustainable farming practices behind their fiber, creating a hands-on environment that gives consumers a reason to visit physical stores that technology cannot replicate.

32 Inbound Logistics • August 2026