The chronicles of retail: The store, the supply chain and the wardrobe
By Maia on Friday, July 20th, 2018
Zennor Rd is the new Bond St.
The big money in London commercial real estate isn’t in veteran properties like Mayfair, Soho, or Knightsbridge anymore, it’s chasing microwarehouses 8km out – in Balham. As consumer expectations for faster deliveries rise, online retailers like Amazon and Asos seek local fulfilment centres to cut delivery times.
The Amazon effect first reached rural warehouses, where they would store inventory for standard and next day deliveries. Now, with same day deliveries increasingly becoming the norm, urban warehouse space is becoming more attractive and the supply chain creeps ever closer to the heart of cities. The model is simple – instead of storing goods in big box warehouses outside the city and trucking them in daily, distribute them in micro-warehouses across the city and have them delivered by smaller, more efficient modes of transport such as bicycles or scooters.
This is good news not just for suburban estate agents, but the city itself. Moving goods closer to the customer helps cities run faster, cheaper and more sustainably. The less goods coming from big box rural warehouses, the less lorries we have navigating our streets. The less lorries, the less traffic and pollution. To put it another way, the more bikes, scooters, electric cars or small vans picking up from urban warehouses and delivering straight to doorstep, the better it is for customers and the cities that adopt it. A win-win we can all get excited about.
What’s in your Prime Wardrobe?
Amazon Prime Wardrobe is jumping out of beta and into every US Prime members’ closet. The ‘Try before you buy’ shopping service allows customers to have clothing delivered to their homes, where they can try them on, keep what they like and return what they don’t (for free).
A number of big name brands – like Adidas, Levi’s, and Lacoste – have come on board. These retailers stand to acquire new customers but some commentators have pointed out the potential conflict of interest inherent in the proposition – so far, Amazon’s private labels are the top performing brands on the site.
Meanwhile, those that have decided against selling on the platform now have to compete with the retail juggernaut by offering a similar experience and level of convenience online. A difficult position to find yourself in, one imagines.
As ever with Amazon, this is likely to drive broader consumer expectations about service quality. It will undoubtedly drive the market to meet if not beat the Prime Wardrobe proposition; an interesting development particularly for 3PLs looking to encourage broader adoption of fast, local deliveries.
Nike just got personal
Last week, Nike unveiled its first ‘Nike Live’ project in LA, a personalised retail concept store that’s built on data and runs on digital.
This store is dubbed ‘Nike by Melrose’ because everything about it – from its location to the products that it stocks – has been determined by data about how the locals interact with Nike. Nike Live stores will stock city-specific products rotated every two weeks, again, based on commercial data analysis.
With the Nike App at Retail, you can browse and reserve products, scan barcodes to discover available sizes and colors, see real-time inventory, and request a try-on by connecting to a Nike athlete who brings out your perfect size either directly to you or to a fitting room. You’ll be recognised as soon as you enter a geofenced area around the store, and recommended items automatically set aside, in your size, regardless of whether a request has been made. This service converts 40 times more than any other tried and tested at Nike. Such is the power of personalisation.
Clearly, Nike Live is no side hobby and we think other retailers should take note. But digital transformation of the physical is just part of the story. It’s likely that Nike will utilise fast local delivery both to take the store beyond its geofence and to unearth more insight on customers in the surrounding area. As ever, Nike leading the way in innovation when it comes to retail experiences.
Quiqup Insight – The game’s changing!
Open the newspaper these days and you’d be forgiven for thinking the high street was dead. Stories around store closures (John Lewis and House of Fraser being the largest and most recent victims), household names going up in flames, and restaurants chains falling into administration have captured headlines across the UK, with more such news coming in every day.
What was once unthinkable is now a reality; traditional retailers, some that have been part of the fabric of UK society for centuries, are taking massive blows as consumers increasingly choose the convenience of shopping online over visiting a store.
The panacea, we are told, is omnichannel – particularly retail stores doubling as urban warehouses for click and collect and home delivery orders. But the problem is that the traditional supply chain wasn’t designed to do that.
So in order to fulfil demand across all channels and customer expectations for convenience, retailers need to reconcile their entire inventory across the supply chain. That way, shops will be able to both sell products in store but also fulfil online orders to support home delivery and click and collect. The treatment and visibility of inventory as a single unit from rural warehouses through to individual stores across the city centre in real-time is the linchpin that makes omnichannel retailing possible.
This level of fulfilment agility requires retailers to do two things. One – adopt dynamic inventory systems through the use of cloud-based supply chain solutions. Two – partner with tech-enabled logistics providers both to move inventory and fulfil demand effectively.
Easier said than done, we know. But the time for planning for change is up, and those who haven’t moved fast enough are already rueing their lack of action. Retail supply chains must be reinvented – before we see more flagship stores on Oxford Street shut down for good.
Ninety Percent of Everything: Inside Shipping, the Invisible Industry That Puts Clothes on Your Back, Gas in Your Car, and Food on Your Plate by Rose George
The author, Rose George, is a British journalist that writes about the things we often don’t or try hard not to think about. In Ninety Percent of Everything, George, hitches a ride on a giant container ship, the Maersk Kendal, across 9,288 nautical miles from the UK all the way to Singapore. While this book focuses on ocean shipping, it highlights the economies of scale and the role container shipping plays in driving global commerce. “Shipping is so cheap that it makes more financial sense for Scottish cod to be sent 10,000 miles to China to be filleted, then sent back to Scottish shops and restaurants, than to pay Scottish filleters,” she writes. An absorbing ode to the industry that delivers us 90% of everything we consume and love.