FUTURE IN RETAILING
Presented by:Rizza Barcenas&Patrick Garbida
FUTURE TRENDS IN RETAILING
Retail is evolving with stores expanding or shrinking,
moving closer to customers through both physical
and digital channels. Technology use is increasing—
RFID, e-commerce, debit and loyalty cards are on
the rise—while personal selling is declining.
THE ROLE OF WHOLESALERS AND DISTRIBUTION
CENTERS (DCS)
Wholesalers and DCs perform similar logistical
roles. Wholesalers supply retailers, while DCs, often
owned by retailers, prepare and deliver goods in
a "floor-ready" state.
ORDERING PROCESS
Retailers or wholesalers place orders to
manufacturers as part of the procurement
process. The customer here is the business entity,
not the end consumer.
RECEIVING GOODS AT THE DC
When shipments arrive at the DC, they are
checked for quality and quantity using barcodes
or RFID. Efficiency and sustainability are key, with
reusable pallets becoming more common.
STOCKING AND CROSS-DOCKING
Goods are temporarily stored or cross-docked for
faster delivery.Cross-docking involves reorganizing
incoming shipments into tailored assortments for
different stores.
PICKING INVENTORY
Picking involves selecting items from storage for
shipment. Inventory records are updated as items
are moved to staging areas for inspection and
loading.
LOADING THE TRUCKS
Loading must be strategically planned, especially
when trucks deliver to multiple stores. Orders are
separated and arranged in reverse delivery order
to prevent errors.
TRANSPORTING GOODS TO STORES
Frequent deliveries improve inventory turnover
and variety, demanding faster, more reliable
processing and often incorporating various modes
of transport beyond just trucks.
UNLOADING AND DISPLAY AT RETAIL STORES
Goods arrive in a "floor-ready" state. Deliveries
must be timed precisely to match store staffing
and operational schedules, especially for
businesses like restaurants.
KEY SUCCESS FACTORS IN DISTRIBUTION
Distribution now involves more than transport; it
customizes products and adheres to strict
schedules. It must manage varied goods, small
orders, and stay competitive in a deregulated
market.
MANAGING INVENTORY WITHIN DISTRIBUTION
Retail stores need accurate demand forecasts and
quick replenishment. DCs must be flexible and
responsive, often customizing goods and ensuring
timely delivery.
INVENTORY MANAGEMENT ACROSS RETAILERS AND
DISTRIBUTORS
Inventory must balance between availability and
cost. Effective communication and shared marketing
strategies between retailers and distributors ensure
better forecasting and customization.
TECHNOLOGY IN DISTRIBUTION OPERATIONS
Technology aids both physical and informational
aspects—POS systems, barcodes, RFID, and self-
checkouts help track sales and manage inventory
efficiently.
ENHANCING THE MOVEMENT OF GOODS
Better information flow allows precise tracking,
efficient transportation choices, and reduced
environmental impact. Packaging innovations also
reduce damage and improve logistics.
TECHNOLOGIES AT THE DISTRIBUTION CENTER
Automation like AGVs and cross-docking, guided
by intelligent software, optimize space and
movement, improving delivery speed and
inventory turnover.
POSITIONING SERVICES IN THE SUPPLY CHAIN
Companies now evaluate services within the
whole supply chain. Cost and customer service
decisions are made considering the broader
network, not just individual businesses.
PRE-SALE SERVICES IN RETAIL
Pre-sale efforts include strategic store layouts,
product displays, and online information to
prepare and guide customers through the
shopping process.
POST-SALE SERVICES FOR CUSTOMER SATISFACTION
Post-sale services such as delivery, installation,
follow-ups, and issue resolution aim to build long-
term customer relationships and repeat business.
ROLE OF THIRD-PARTY SERVICE PROVIDERS
Third-party service providers are essential partners that help
businesses optimize operations, reduce overhead costs, and
adapt to the complexities of modern markets. Their
specialized expertise allows companies to focus on their core
functions while ensuring that other critical aspects of the
business are efficiently managed. As the business landscape
continues to evolve, the role of third-party providers will likely
become even more significant in driving innovation and
competitiveness.
PREDOMINANT DELIVERY METHODS
There are five primary transportation modes for moving conventional goods—
truck, rail, parcel, air, and pipeline—each with trade-offs in cost, speed, and
coverage.
1.TRUCK—PRIVATELY OWNED OR THIRD-PARTY CARRIERS
Most widely used for domestic shipments due to door-to-door
convenience and speed. However, it is expensive and faces challenges
like fuel costs, driver shortages, regulations, and congestion.
“TOP 10” CHALLENGES OF THE TRUCKING INDUSTRY (AMERICAN
TRANSPORTATION RESEARCH INSTITUTE (ATRI))
◾Fuel costs (current and long-term) ◾Traffic congestion
◾ Economy (pressed by increasing regulation, ◾Tolls/highway funding
slumping demand, excess capacity) ◾Environmental issues
◾Driver shortage and retention ◾ Tort reform (civil judgments against
◾ Government regulation (safety plus other local trucking
regulations) firms)
◾Hours-of-service ◾Onboard truck technology
2.RAIL—FOR SELECTED GOODS
Best for heavy goods over long distances with medium cost and speed. It
lacks convenience but intermodal solutions (like piggybacking trucks on
trains) can help. Usage may grow as fuel costs rise.
3. AIR
Suitable for small, valuable, or time-sensitive shipments. It’s the fastest and
most expensive mode, often combined with trucks for final delivery.
4.PIPELINE
Economical and safe for transporting oil, gas, and chemicals, but limited
in geographic scope and flexibility.
5.PARCEL
Parcel carriers like UPS, FedEx, and the U.S. Postal Service specialize in
lightweight shipments, emphasizing speed, reliability, and wide
geographic coverage. Costs are similar to trucking, and the sector is
expected to grow as carriers expand their logistics and returns
management services.
ELECTRONIC TRANSPORTATION METHODS:
In this increasingly electronic age, there are two other means of transportation
that should be noted. One is the shipment of electrical energy over high-voltage
transmission lines; the other is the shipment of data over fiber-optic networks or
wireless networks.
1. TRANSMISSION LINES
Transmission lines transport electricity quickly and efficiently from power stations to
end users through specialized infrastructure, including substations and power lines.
They are the only method for moving large amounts of electricity, with costs
influenced by the energy source rather than transport. Electricity is vital for powering
industrial equipment and may potentially replace fossil fuels in vehicles.
2.FIBER-OPTIC NETWORKS
Fiber-optic cables are replacing copper lines for data transmission due to their
higher capacity, lighter weight, and lower cost. They enable fast, widespread
information flow, sometimes substituting physical goods with digital versions
(e.g., e-books vs. printed books).
THIRD-PARTY SERVICE PROVIDERS
Third-party logistics (3PL) providers offer a wide range of services to support businesses
in managing their supply chains efficiently. These services typically include:
1.Inventory management: Monitoring and controlling stock levels.
2.Order acceptance and processing: Receiving and handling customer orders.
3.Pick-and-pack operation: Selecting products from inventory and packaging
them for shipment.
4.Order fulfillment: Ensuring orders are completed and delivered to customers.
5.Assembly/packaging/value-added activities: Assembling products or adding
extra services like custom packaging.
6.Credit card verification: Confirming the validity of payments.
7.Invoicing, credit, and collection: Handling billing, managing credit, and
collecting payments.
8.Pre-sort capabilities: Sorting items or packages before shipment for more
efficient distribution.
9.Returns handling: Managing the return of products from customers.efficiency.
TREND TOWARD OUTSOURCING THE DISTRIBUTION
FUNCTION
Large retailers like Wal-Mart, Lowe’s, and Publix have invested in their own
Regional Distribution Centers (RDCs), viewing distribution as a competitive
advantage. In contrast, many others are outsourcing distribution to third-party
providers, recognizing that logistics is not their core competency. Manufacturers
face similar decisions, weighing the benefits of internal distribution networks
against the advantages of outsourcing.
LEADING THIRD-PARTY PROVIDERS
Companies such as UPS, FedEx, and Ryder have expanded their services beyond
traditional logistics. UPS, for example, offers repair services for Toshiba computers,
coordinates global delivery services, provides kitting services, and offers short-
term financing. These providers offer comprehensive supply chain solutions,
allowing businesses to focus on their primary operations.
PERFORMANCE MEASUREMENT IN DISTRIBUTION
As the distribution function becomes more critical, companies are
implementing performance measures to assess effectiveness and
efficiency.
Financial Performance Measures: Include profit margins, asset utilization,
gross profit, inventory turns, return on assets, and economic value added
(EVA).
Operating Performance Measures: Include on-time deliveries, stockouts,
average lead times, supplier responsiveness, and innovation contributions.
Collaboration Performance Measures: Assess the effectiveness of retailer-
distributor relationships, focusing on communication, delivery reliability,
and inventory management.
RETAILER–DISTRIBUTOR RELATIONSHIPS
The relationship between retailers and distributors is vital for
supply chain success. Whether the distribution function is owned
or outsourced, effective collaboration can lead to reduced
costs, faster deliveries, and better alignment of supply with
demand. Open communication and a long-term partnership
approach are essential for achieving these benefits.
THANK YOU
