Inbound Logistics | January 2022


Retailers on either side of the financial spectrum will thrive as consumers shop in high-end and experience-based stores or in off-price retailers. But commodity-based retailers will struggle to remain profitable unless they reimagine the way they operate— both in-store and across the supply chain. Today’s consumers pressure retailer margins with expectations for fast, free shipping, sustainable products, and sizable promotions and price matching. To stay afloat, retail businesses have to meet consumer demands while implementing strategic cost containment initiatives that find profit improvements and efficiencies and reduce spending in marketing, IT, corporate services, and more.

Upstream investments will increase. In 2022, retailers will shift their focus to the supply chain and, specically, warehouse and distribution center operations. Many still use legacy technology systems or manual processes to guide inventory, fulllment, and logistics actions—and that

doesn’t mesh with modern retail models. Many technology solutions used in stores will extend to the back of the store and beyond. Automation of inventory movements, decision-making, and task assignments will quickly follow.

Mark Wheeler Director, Supply Chain Solutions, Zebra Technologies

I foresee massive growth in a few key areas of supply chain planning and execution technology. First are demand planning and inventory optimization platforms that are built with an AI/ML predictive analytics engine. These will support omnichannel retailers and brands in planning inventory and position inventory to improve customer service. Second are order management platforms that are built with the ability to integrate with complementary commerce platforms. This technology gives retailers endless opportunities to delight customers. Finally, expect a resurgence in visibility platforms that help distribution and retail supply chain-centric enterprises answer the question: “where is my order”?

David Pennino CEO, LogicSource

The retail sector is a fast-growing segment for digital twins and an early supply chain opportunity. The total market for retail/ consumer digital twins is expected to exceed $471 million, more than doubling within two years. Examples include Dassault Systèmes’ Store Electronic Systems and Microsoft Azure’s Digital Twins to help address retail issues such as model physical spaces to simulate customer trafc patterns, and review in-stock/out-of-stock conditions. HERE offers digital twin capabilities that can support retail, such as connecting a digital twin to embedded sensors to gather data for nancial analysis and projection. This, in turn, helps retailers and brands rene and optimize forecasting, adjust pricing, or offer customer-specic opportunities.

Jim Barnes CEO, enVista

Continued fulllment innovation will further optimize retail operations: After coping with the pandemic-driven supply disruptions and consumer demand shifts to online and omnichannel fulllment, retailers will revisit their inventory strategies across the

supply chain, but especially as it relates to getting inventoryc to customers. In 2022, retailers will experiment more heavily with dark stores, gray stores, dropship, and more dynamic use of fulllment rules—for example, replenishing stores from the e-commerce DC if inventory is moving faster in stores than online, or holding back a replenishment order for stores to send to the e-commerce DC instead if the opposite is happening.

Susan Beardslee Principal Analyst ABI Research

Nikki Baird VP, Retail Innovation, Aptos

142 Inbound Logistics • January 2022

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