The last few years have shown us that disrupted supply chains now need to be seen as a series of inevitable occurrences, rather than shocks. Without the right preparation and strategic planning in place, retailers of all sizes can face massive challenges and costs, writes Natalie Frow, MD Retail, DHL Supply Chain UKI.
With consumers demanding faster delivery as well as greater sustainability – even amid disruption – retail logistics will be defined by innovation and adaptability. Companies that embrace these trends will gain a competitive edge and ensure their logistics operations are ready for the future while supporting long-term business goals.
Improvements in inventory
Effective inventory sourcing and management are critical for retailers to thrive in a competitive and volatile marketplace. Though retailers are in a much better position than they were a few years ago, thanks to leadership teams putting greater emphasis on building agile supply chains and improving inventory management, there is still work to be done.
Having the right product, at the right place, at the right time, helps to both maintain profitability and enhance customer satisfaction. A robust supplier network is essential for mitigating disruptions, and embracing and moving to a diversified sourcing approach will pay dividends. By working with multiple suppliers across different regions, businesses can reduce dependency on single sources and ensure continuity even during unexpected challenges, like geopolitical conflicts or natural disasters.
While this can be a complicated model, working with a third-party logistics provider can help give retailers the support and expertise needed to succeed. With a 3PL, businesses can also take advantage of advanced automation which they may otherwise be unable to access due to expense or lack of infrastructure.
The acceleration of automation
Robotic picking systems and IoT-enabled inventory management are transforming how warehouses operate. As modern supply chain management systems develop, these innovations will become more accessible to businesses of all sizes, and we will likely see an acceleration in automation as the higher cost of labour makes it easier to justify investment in robotics.
Transparency and data-driven decision-making will be non-negotiable in 2025. Retailers and logistics providers can leverage real-time visibility tools to monitor shipments, manage inventory, and optimise supply chain performance. Predictive analytics further enhances these capabilities, enabling businesses to anticipate disruptions and adapt proactively. Meanwhile, advanced tracking systems allow customers to monitor their orders at every stage, fostering trust and enhancing the overall experience.
Sustainability as a core focus
As businesses, consumers, and regulatory bodies increasingly prioritise environmental responsibility, there has been a growing demand for greener logistics. We are seeing more innovation around circularity, with products and materials being kept in use for as long as possible through recycling, refurbishing, and remanufacturing.
Sustainable packaging will continue to be a key area of focus. Businesses are shifting away from single-use plastics toward recyclable, biodegradable, and reusable materials. By redesigning packaging to be lightweight and accurately sized, businesses can further reduce waste and carbon emissions during transport. Optimising delivery routes and using electric vehicles also helps to minimise an organisation’s carbon footprint, while enhancing its reputation. Incorporating sustainable logistics isn’t just good for the environment – it’s smart business, positioning retailers as forward-thinking, responsible leaders.
Enhancing the ecommerce proposition
As we head into 2025, we can expect to see continued growth of ecommerce as the economy recovers and consumer confidence grows. Categories like Health and Beauty in particular have been performing well, with this momentum unlikely to slow down. However efficient logistics is the backbone of ecommerce success. Shoppers value convenience, and expect both efficient and flexible delivery options.
With the rise of online shopping, a robust returns proposition has also become a competitive differentiator. Customers look for a seamless and hassle-free returns experience, which has prompted companies to continuously innovate and improve this area. However, more retailers are reviewing their returns proposition to deter returns, particularly in categories where there is currently a high rate of returns like fashion.
Moving into the new year, retailers need to be confident in their supply chain and logistics operations, which will help them to mitigate external pressures and be more resilient through disruption. Looking ahead, we can’t predict what the next political or environmental event might be, but we do know that there will always be more on the horizon.
Natalie Frow, MD Retail, DHL Supply Chain UKI
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