The retail supply chain trends unlocked in lockdown

Following conversations and first-hand experiences working with high street and ecommerce retailers, we commissioned research of 200 senior retail professionals to further determine how COVID-19 disruption has impacted stock management and retail supply chains. The research revealed that coronavirus has resulted in four out of five (82%) retailers changing their approach to stock management and pinpointed five trends showing how retailers have evolved from disruption to delivering excellence during uncertainty. The five trends include: 1) Time for Change To address delays caused by COVID-19, retailers have adapted timings at the beginning and end of their supply chains. Of the retailers which have made changes to supply chain strategies, 41% have allowed longer leads times on stock ordered, while four in ten (40%) have extended delivery times provided to customers. 2) Localising Stock COVID-19 disruption led to two thirds (66%) of retailers receiving stock late, whilst a similar number (63%) experienced shortages in the availability of goods. This is seeing retailers prioritise investment in stock availability (57%), which includes building more localised levels of stock to minimise the risk of out of stock scenarios. This shift in behaviour has the potential to completely change Just in Time (JIT). Only a quarter (25%) of retailers believe JIT has some form of feasibility while the pandemic remains ongoing. JIT will have to change because it’s less able to cope with increasing unpredictability - it quickly becomes ‘just out of time’. Supply chains will evolve as retailers aim to better mobilise stock, keeping it more agile to sweat its value across multiple routes to market. 42% of retailers are planning to grow sales by selling through more channels. 3) Real Time Visibility The research shows retailers rank balancing stock flow versus stock piling as the biggest supply chain challenge following the pandemic. They want to avoid not being able to satisfy customer demand because of unavailable stock, but equally don’t want to tie-up too much capital in stock at risk of depreciation. To address this challenge, 40% of retailers are investing in improving the accuracy of inventory management, whilst a third (33%) pinpointed smart, connected technology that improves the accuracy and visibility of stock as the most effective method of strengthening supply chain resilience. 4) Stock Optimisation The ongoing economic uncertainty and unpredictable customer demand caused by COVID-19 are seeing retailers hone-in on the performance of the goods they’re selling. 41% of retailers are investing in auditing their stock to improve profitability. These pandemic-driven stock reviews have also resulted in a third (33%) of retailers diversifying the stock they sell, with the same amount also changing strategies to better focus on stocking and selling their highest margin goods. 5) Diligence Against Disruption In response to the impact of COVID-19, a third (33%) of retailers are developing contingencies to protect against supply chain disruption. This involves tactics such as increasing the number of suppliers they source goods from, working with a larger number of logistics providers to spread risk and also increasing overall stock levels. A Reoccurring Theme Each of the trends emerging from the impacts of COVID-19 share a common theme of tackling margin dilution. Retailers and logistics partners have spent years optimising supply chains to remove unnecessary costs that cannibalise margins. This is now being turbo-charged as retailers aim to extract maximum value from each hard-fought sale and to build loyalty in increasingly uncertain and price-sensitive markets.

The retail supply chain trends unlocked in lockdown

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Today’s news in brief-21/2/25

Aldi to increase store assistants’ pay from March

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Check out our free weekly podcast

Read Next

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