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Latest UK retail trends highlight pressure on the online channel

The latest statistics from the British Retail Consortium Retail Sales Monitor (BRC-RSM) show that UK retail sales are off to a slow start in 2017, with overall sales growing by just 0.1% in January. Bucking the trend, however, are online sales in the non-food sector, which grew at 8.0% in the first month of the year, in comparison to in-store sales that made a negative contribution. Online sales provide a critical channel for growth across the non-food sector as a whole.

So what does this mean for retailers, and the wider logistics and transport operator sector?

At its most fundamental, pressure to grow the online sales channel means retailers need to have seamless and cost-effective delivery options for consumers – from dynamic online bookings to a range of costed home delivery service options.

As Paul Martin, Head of Retail, KPMG, commented: “Online retail channels will continue to grow in popularity, and with increased pricing pinching the consumer purse, retailers will need to balance price, personalisation and customer experience seamlessly in order to grab the attention of their customers.”

But, in a bid to deliver the best customer experience and win the much-desired online order, how many retailers are making decisions in real time on the delivery options? How many are presenting these options to the customer based on the cost to fulfil the order and delivery capacity with their logistical operations?

On the other hand, how many are taking sales that are adversely affecting profitability, or that they are unable to deliver because of a lack of visibility across the supply chain? And how many are discounting goods unnecessarily, or failing to win – or even offer – auxiliary services, due to a fundamental disconnect between the first and last mile of delivery?

With retailers pushing back on transport operators regarding additional costs, yet demanding rapid, just in time response, the only way to address these issues is through a collaborative approach. Disparate aspects of the supply chain must be pulled together via integrated transport management and planning, and route optimisation.

Bringing together optimisation models that work across the entire supply chain – from initial collection from manufacturer or distributor, through hubs and cross docks, to the last mile of delivery to the retailer and onwards to the consumer – leveraging real time information and real time demand, combined with advanced route optimisation, can transform performance. In addition to improving the way resources are deployed, this model allows retailers and transport operators to maximise profitability, while meeting ever-discerning consumer demands.

As the pressure on the online channel is only set to increase, it is the ability to leverage and share accurate real time information across the supply chain that will truly enable retailers to differentiate on customer experience and excellent service, without compromising – and indeed maximising – profitability.