August 27, 2015
Posted by Alicia Baumann

Innovations in the Supply Chain

Most brick-and-mortar retailers are looking for ways to innovate their supply chains to accommodate eCommerce, which is the largest growth channel within the omnichannel approach. "The largest U.S. retailers reported strong online sales in their second-quarter earnings reports this week, extending a trend that has seen e-commerce revenue expand far faster than store sales, and several said they are making strides in delivering goods to consumers more profitably,” writes Loretta Chao of The Wall Street Journal. In fact, one of the largest american retailers Target has seen the massive opportunity presented by the surge of eCommerce and is reinventing its supply chain in order to keep up with customer demand with more precise delivery windows.

One of the ways that retailers are combating the surge of online retail demand, while improving its distribution channels to meet the quick turnaround times expected by consumers, is building mini-fulfillment centers, which is “driving the omni-channel supply chain approach that has become a requirement rather than a choice.” This change in model has become a necessity for retailers in order to create the perfect cart-to-customer experience

One way the traditional brick-and-mortar store, Walmart, has changed their supply chain is, "By keeping smaller amounts of a wider variety of goods at distribution centers, [they] can make products available to customers without having to stock the items in every store, said Kevin O’Marah, head of research for supply chain talent development firm SCM World. And if customers want an item in a distribution center, it can be shipped quickly and more efficiently than if a store employee were to ship it."

As long as eCommerce keeps growing at the rapid pace—topping $300 billion dollars in 2014—stores with physical locations are going to have to innovate their supply chain to keep flourishing in the on-demand economy.

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