How can retailers adapt their supply chains to serve a modern, eCommerce-backed high-street? Wincanton's Managing Director for General Merchandise, Rachel Gilbey, offers insights on this hot topic...

Empty high streets and shutters over shopfronts have become increasingly common sights across the last decade, and a trend only exacerbated since March 2020. For some ‘bricks and mortar’ retailers, the initial impacts of COVID-19 have been devastating. Mass closures and ‘stay at home’ messages have changed the way we all shop, exposing those with less mature eCommerce models that have been unable to adapt quickly enough.


Research

Research from the British Retail Consortium-ShopperTrak monitor revealed that high street footfall dropped by 77% year-on-year in January 2021 – the steepest fall since May 2020’s 86% decline at the height of the pandemic. It’s not just the traditional high street that suffered, with out-of-town retail parks also registering a 41% annual attendance drop, leaving the three-month average decline at 27%.

The impact of COVID-19 on this cannot be ignored. As the third national lockdown gripped the UK, shoppers had little choice but to swap physical shelves for their virtual counterparts. Office for National Statistics research found that February 2021 was a record month for eCommerce, with more than 33% of all purchases taking place online. But, what remains to be seen is how traditional stores will emerge into a post-COVID-19 world.

"Although the high street as we know it may not fully recover, an evolved version could rise in its place."

You could be forgiven for thinking that this paints a bleak picture for public shopping spaces and the businesses that rely on them. Although the high street as we know it may not fully recover, an evolved version could rise in its place. High street 2.0 (as has been explored recently by Forbes) will prioritise ‘experience’, with bricks and mortar spaces seizing on the advantages they have over online.

These spaces could include in-store collaborations (already happening with the likes of Asda and B&Q), more dining facilities and activity-led spaces. Alongside these destinations, micro-fulfilment and consolidation centres would bridge the gap between eCommerce and physical retail, catering to consumers looking for the increased convenience of online shopping in a way that fits around their own lifestyle. This will be especially important in a post-COVID-19 world in which office spaces and working patterns change.

Leveraging bricks and mortar

The evolution of the high street and how it may look has been spoken about for some time. In this experience-led, convenience-driven future, the supply chain and associated logistics functions will be a key part of the foundations.

The property space that has long been thought of as a ball and chain for retailers may actually become a key differentiator. With consumers attracted to shorter lead times for click and collect and environmentally sustainable urban deliveries, leveraging property assets as micro-fulfilment hubs makes sense.

Out of town regional distribution centres have been fulfilling home deliveries and click and collect orders for some time. But in a world where the consumer demands delivery that’s both on their terms and 'green’, this may lose its viability. This is where now vacant high street properties could be reinvented, doubling as dedicated mini-warehouses or order consolidation hubs, decreasing proximity to large swathes of urban and town-based shoppers. This is, in essence, an expansion of the hub and spoke method some large retailers - such as Argos and Sainsbury’s - have already deployed.

Supply chain expertise to unlock new possibilities

These locations don’t need to be dedicated to online fulfilment or even a single brand, there’s the option to create hybrid facilities that mix the elements the modern consumer requires.

With less physical space needed to cater for fewer in-person shoppers, areas of properties could be repurposed. This ‘free space’ can hold fast moving, high-demand products for online fulfilment including click and collect and home delivery. This is an interesting area for a supply chain partner like Wincanton, which has experience in both store replenishment and online order fulfilment and single item picking automation that could be deployed in stores.

In terms of multi-brand, supply chain partners could operate consolidation hubs, bringing in items from within their own networks of partner brands and wider retailers, to create multi-package collections for consumers. This would provide what many shoppers feel is modern convenience – a single pick up or delivery with a compromise on overall speed.

"The supply chain behind the scenes needs to be effectively managed. It needs complete efficiency and visibility at every step, offering transparency and accurate information."

To make these options a reality for the consumer of 2021 and beyond, the supply chain behind the scenes needs to be effectively managed. It needs complete efficiency and visibility at every step, offering transparency and accurate information – even in the event that things go wrong. Many retailers have learnt from the challenges, and mistakes, of the past 18 months. In the same breath, those with the capability to provide market-leading eCommerce and digital solutions have thrived.

The ‘death’ of the high street has been spoken about for some time, and while many saw COVID-19 as a possible end point, it could usher in a new way of shopping.

 

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TAGS

  • Thought leadership
  • Digital and efulfilment
  • Grocery
  • Consumer packaged goods
  • General merchandise
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