The five key factors impacting retail supply chains
Factor 1: Covid-19
The impact of COVID-19: COVID-19 has highlighted the fact that globally dispersed and complex supply chains are only as strong as their weakest link. As businesses assess the impact of the crisis and future gaze, new supply chain strategies are emerging as industries adjust to the new normal. Strategies are likely to involve using shorter, more flexible and resilient supply chains better equipped to deal with supply shocks, but also address rapid changes in consumer behaviour witnessed in recent months.
Factor 2: Brexit
Brexit: Considerable uncertainty remains over the future relationship between the U.K. and the European Union (E.U.). Whatever the outcome, there will be significant repercussions for supply chains for European retailers, particularly those U.K. based. After all, the E.U. is the U.K.’s largest trading partner, accounting for approximately half of both imports and exports of goods. Supply chains between the U.K. and the EU are highly interwoven throughout the entire retail industry.
Factor 3: Geopolitics
Geopolitical environment: Rising tensions between the U.S., China and the E.U. have created considerable uncertainty within the international trade environment, impacting foreign direct investment and influencing supply chain strategies for many international businesses.
What barriers are stopping you from shifting your supply chains to your domestic economy?
Source: Retail Economics
Factor 4: Sustainability
Sustainable supply chains: Early in the pandemic, apparent concerns around sustainability were at risk of falling to the wayside as firms focused on survival. However, as the initial shock resided, businesses and governments are considering how to build back better, with sustainability playing a major role.
Factor 5: Technology
Technological advancement has revolutionised supply chains in recent years. The drive towards efficiency has streamlined supply chains, from warehousing robotics and autonomous ships to computerised shipping and tracking. Whether it’s greater efficiency, better communication or enhanced transparency, the supply chain continues to evolve at pace, and the role of technology is central to future development.
To find out more about how retailers can go about gaining the most from these drivers, please download our full report, or explore the next article in the series, which looks at the impact of on-shoring.
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Explore the next article in this series on retail supply chains here.
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This short insight article forms part of a thought leadership report entitled “Covid-19 and the Future of Retail Supply Chains” produced by Retail Economics. It explores industry structural changes and contextualises the impact of Covid-19 on supply chains across the European retail industry. For retailers and brands seeking valuable insight into the impact of the crisis across Europe, the full report provides data-driven insights and guidance for action.
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