The retail supply chain is indeed a complex and dynamic system that requires constant innovation. The retail industry is facing operational inefficiencies, changing consumer dynamics, high labor costs, lack of inventory visibility, dramatic changes in demand, and more. 

Retailers know that in order to succeed in the competitive retail environment, they need to build efficient logistics. This can only be done by addressing key challenges. That is why they are constantly looking for ways to optimize their supply chain. 

Choosing a carrier and interacting with it

Challenge:

Choosing a reliable carrier remains one of the most difficult challenges in retail logistics. Retailers need to comprehensively evaluate carriers based on their experience, capabilities, service levels, and commitment to industry standards. A tender system comes to the aid of retailers.

Solution:

The shipper needs to create a tender offer and invite potential carriers to compete for the contract. This approach allows not only to compare price offers, but also to assess the reliability, experience, and technical capabilities of each participant. After a thorough analysis and verification of the documentation, an agreement is concluded with the winner to guarantee the stability of supplies. Another important aspect is the constant monitoring of the selected carrier's performance, which helps maintain a high level of logistics service.

The trend towards sustainable development

Challenge:

Environmental regulations are becoming more stringent, and the strategy to move to Net-zero (net zero emissions) by 2025 and others require either the abandonment of internal combustion engine vehicles to reduce carbon dioxide emissions or significant optimization of transportation. Thus, the logistics industry is under intense pressure. 

On the one hand, sustainable logistics seeks to minimize the environmental impact of business activities by using efficient fuels, renewable energy sources, and environmentally friendly packaging in both distribution and internal logistics operations. On the other hand, the paradigm shift will certainly affect transportation and product prices, marketing policies, and customer requirements. For example, according to a Sifted survey, 89% of respondents want to see environmentally friendly delivery, and 69% said they chose a particular company because of this aspect. Thus, the challenge is to balance sustainability and profitability of operations. 

Solution:

Green delivery is a fast-growing trend. By integrating it into their logistics, companies can count on audience loyalty and an improved image. In the absence of the possibility to replace the fleet with safe green transport, optimizing routes, reducing empty miles, and reducing the amount of free space in vehicles will help reduce emissions. 

Cybersecurity

Challenge: 

Retail logistics involves the collection, storage and transmission of sensitive data, the loss of which can lead to legal and financial consequences. Every year, the transportation sector faces increasing cyber risks. The main cyber threats include:

• theft of customer data;

• disruption of supply chain management systems;

• attacks on IoT devices and monitoring systems;

• interference with artificial intelligence and routing systems.

Non-compliance with regulatory requirements: Failure to protect data damages reputations and in some cases results in fines or penalties under laws such as the GDPR or CCPA.

Solution: 

Enhance security measures: Protect data with end-to-end encryption, implement access control measures, including role-based access control (RBAC), which restricts users to access only the data and systems that are necessary for their specific role.

To protect yourself, implement multi-level data protection, use reliable software, apply specialized threat detection tools, and conduct regular cybersecurity training for your staff.  

Alternatively, choose digital tool providers that guarantee strong data encryption, adhere to international security standards, and have controlled access to resources to comply with data privacy rules. 

Lack of visibility

Challenge:

The lack of transparency and visibility in the supply chain reduces the efficiency of logistics operations, leading to delays and increased operating costs. According to McKinsey, nearly 45% of companies have difficulty tracking their supply chain. The lack of visibility increases logistics costs by 15-19%, as goods in the chain are transferred without clear tracking or communication. As of 2022, only 67% of companies were using digital supply chain tracking solutions. 

Solution:

Better supply chain visibility is key to operational sustainability and customer satisfaction. The implementation of reliable real-time tracking technology solutions guarantees end-to-end visibility and data analysis, and is therefore crucial for smooth operations. 

Cargo trackers are solutions that provide complete supply chain transparency by providing real-time information about the location of goods and allowing for better route planning and quicker response to any disruptions.

Last-mile delivery

Challenge:

Last-mile delivery remains the most complex and expensive segment of the supply chain. The high cost and inefficiency of delivering goods to the end user forces carriers to look for alternative ways to meet customer needs.

Solution:

Digital solutions to improve logistics management. Route optimization and cargo consolidation help reduce fuel costs, shorten delivery times, and increase customer satisfaction. AI-based technologies analyze route history, current road conditions, and calculate the fastest and most convenient delivery route. 

Thus, smart technologies integrated with GPS tracking provide efficient route planning, real-time tracking, and dynamic route changes depending on traffic conditions.

In the fiercely competitive retail industry, logistics challenges can be enormous. However, by integrating smart solutions to digitalize and optimize logistics, these obstacles can be effectively overcome. By understanding the pain points and implementing the right tools, companies can not only overcome these challenges, but also turn them into opportunities for growth and success in the ever-evolving retail industry.