International Retailing Challenges

Evolution of modern times International Retailing has been characterised by far reaching changes in Supply chain and Logistics. Changes in both Logistics and Supply chain industries have been accelerated mainly due to the availability of specialised and high end infrastructure in terms of Racking and Material Handling Equipments that contributed to bringing about efficiency in physical operations and the IT revolution which made available specialized warehousing operations solutions. Warehouse operations began to be managed through Systems which meant faster and accurate operations in terms of RF Picking, Putting Away and other warehousing operations and lesser reliance on manpower skills. Communications technology enabled the LSPs to share data and information with the Clients instantaneously. By interfacing the Warehouse Management software with the Client’s software, the Goods Receive Notes could be uploaded to reflect accurate inventory positions and download orders from the client system instantaneously thus reducing time lag in flow of information and data. Thus we see the International Retail Operations becoming more and more hi tech and IT dependant.

Two major events from the recent past are going to be the catalysts and accelerators for the International Retail Industry to go to the next level in terms of evolution. The two major significant factors are Globalization and E Commerce. Both the above are linked together for Globalisation has erased the borders and brought markets together. Customers all across the globe are expecting the same standard and international products as well as the same Customer Experience. Online ordering has enabled Customers from different parts of the world to order items online. This means anybody from anywhere can order for goods online. Amazon and E Bay are some of the leaders in enabling online business globally and the international retailers are not going to be left behind.

Currently we see the International Retailers consolidation and expanding their operations in America, Europe and South East Asia. They are currently servicing online services at national level. With internet penetration being very high, there is a new breed of online customers that the international retailers have to service. Home shoppers and Catalogue shoppers as well as Store customers are a known entity to the Retailers. However as far as online shoppers are concerned, it is difficult to anticipate or predict the buyer habits, expectations and trends as yet. Right now data on Online shopping trends during Holiday seasons, during Promotions and specific seasons are being collected and over the years, Retailers would be able to anticipate online customer’s expectations and work to exceeding customer expectations.

Online ordering poses several challenges to the back end operations in International Retail. Some of the retailers have maintained common Order picking and packing for Store customers as well as Online Customers. With increase in volumes, there is always the danger of Store Customers missing out to Online Customers and facing no stock at stores. Unless the Online Customers are the same as Store customers, the operations will need to be augmented to service both sets of Customers. Expanding backend operations will mean investments into additional fulfilment centres regionally and nationally. The Retailers cannot afford to operate nationally with few RDCs and will need to set up satellite fulfilment centres in local areas to save on distribution costs.

The last mile or secondary distribution is seeing new trends owing to the increase in online customers calling for home deliveries. Home Delivery systems have begun to augment their services by introducing specialised boxes and containers to deliver refrigerated products and containers that can be delivered to unoccupied home and secured to ensure safety.

These changes are only the beginning. We are in the initial stages of online shopping. Going forward more and more far reaching developments and changes are to be expected.