Nearly 72% of retailers are digitizing their supply chains to enable real-time visibility through tools like automation, sensors and analytics, according to research released by Logistics Trends & Insights, Atlanta, and American Global Logistics (AGL), Atlanta. In addition, the report, “AGL Supply Chain Brief: Eye on Retail,” shows that many retailers are turning to outside expertise to help fuel their digital innovation, spending $50.7 billion on third-party logistics providers in 2018.
“The demands of omnichannel and just-in-time delivery are forcing retailers to reimagine their supply chains,” says Jon Slangerup, chairman and CEO, AGL. “At the same time, we’re entering a renaissance for supply chain technology, with a wealth of solutions available based on shippers’ unique needs and processes. Retailers that couple the right technology with logistics expertise can unlock significant new value from their supply chains.”
Some additional findings include:
- As the U.S.-China tariff battle continues, hefty duties are causing prices to spike and prompting retailers to reevaluate their inventory strategies. Some businesses are forward-buying inventory to get ahead, a practice that requires precise forecasting to avoid dreaded stock-outs or a surplus of goods.
- Achieving true supply chain optimization is still a work in progress for most retailers. Among retailers implementing new technologies, only 15% are scaling those platforms, and just 4% say they’re seeing the benefits so far.
- Businesses that adopt digital supply chains boost annual earnings by 3.2% on average, the largest increase in digitization of any business function.
- For retailers, the overarching goals of IT investment are to increase transit speeds, predict trends, minimize the impact of disruptions and plan further in advance. Since retailers typically maintain minimal inventory in their supply chains, particularly fast-fashion brands, speedy response and delivery times are essential.