What’s Your Supply Chain Reaction?


We are reminded from time to time how retail store owners are wise to keep an eye on real estate investing trends. As an example, consider this recent article in National Real Estate Investor (NREI) titled, “What Retail Estate Investors Need to Know About the Transforming Retail Supply Chain.”

E-commerce and brick-and-mortar stores, once competing sales channels, are now seen as each having unique, complementary benefits to consumers who demand same-day delivery or ship-from-store options. Consider your own retail situation: How adaptable is your store to these five emerging trends driven by leveraging both supply chains to improve customer experience?

1. Omni-channel retailing, a distribution strategy recognizing that online and mobile delivery have made every customer a point of sale. Can you seamlessly serve all your customers via all available channels? Most retailers give themselves a three on a scale of ten in implementing an omni-channel retailing strategy. From the article, “This strategy will impact every part of retailers’ operations — including the supply chain network, location selection strategy for stores and distribution centers, distribution center design and materials handling infrastructure,” NREI said.

2. Internet sales tax legislation changes proposed under the Marketplace Fairness Act aim to level the playing field between brick-and-mortar stores and Internet-based retailers and would expand the collection of sales taxes by online retailers. How will you comply with the final legislation?

3. 3D manufacturing mayhem is on the way. Additive manufacturing via 3D printers is beginning to have a real impact on manufacturing and supply chains. NREI explains, “The breadth of creative possibilities is staggering, as new products become cheaper to bring to market, me-tail-driven consumers get to design more of their own customized products, and some brick-and-mortar stores offer walk-in customers tools to create precisely the product they want.” Wohlers Associates values the 3D industry at $3.1 billion by 2016, and $5.2 billion by 2020. That’s what we call printing money.

4. Category killing is the direct result of increasing Internet speeds, which enables download-only purchases of books, music, computer games and other entertainment. “This transforms the retail supply chain in a unique way. For retailers in this space, prices can decrease as the infrastructure needed to ship, store and move goods is inherently eliminated, replaced by only marginally increased data storage and management costs.” How will this trend impact your retail real estate assets?

5. Adaptive re-use, or being creative with remaining space, can make or break a brick-and-mortar retailer. This trend enfolds the previous four and calls for creativity and out-of-the-box thinking. Omni-channel retailing, 3D printing and relentless technological innovation are all challenges that force retailers to re-consider how they use store space. What are your “what ifs”? How adaptable are you to these trends in retail real estate?

Read the full post here.

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