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Conclusion – IREU Operations & Logistics 2019 Part 2

The first chill winds of a possible slowdown are starting to blow through the world economy. At the time of writing, there is evidence that Brexit-buffeted Britain may already be in recession.

In Europe, there is disquiet at the state of Italy’s economy. The world’s central banks, still coping with the fallout from the 2008 financial meltdown, have little ammunition left to deal with another crisis.

For retailers, the prospect of consumers tightening their belts is, of course, alarming. After all, many of these same retailers have endured some comparatively lean years over the past decade, all at the same time as coping with radical changes to customers’ shopping habits thanks to the development and adoption of digital technologies.

Against such a backdrop, if recession does return, many retailers will inevitably think about postponing investment plans. Potential savings within Operations & Logistics, so often a capital-intensive part of any business, may look like a good place to start cutting back.

We would urge caution. Essentially, this is because the shift towards multichannel retail is not going to slow down. Customers will not look kindly on retailers that, for example, put money into Merchandising, tempting customers in, but then do not have the capability to get goods to these same customers in a timely fashion. Excuses involving inadequate warehousing provision or creaking IT systems will not be well received.

The central message of this year’s Dimension Reports on Operations & Logistics again comes sharply into focus. Yes, there are huge pressures on costs, but retailers need to continue to make carefully targeted investments in order to provide the kinds of multichannel customer experiences that consumers now expect.

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