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Welcome back for the 2nd edition of OurView in Retail! In our last piece, we highlighted some of the factors dominating the retail logistics industry in 2018, and how this landscape has rapidly evolved as we set to close the chapter on Q2 of 2019. In this edition, we talk about data. Understanding data, capturing data, and visualizing data, is now a major differentiator for players in retail logistics. Effectively transforming into a data-led organization has the potential to improve operational efficiencies, improve customer experiences, forecast trends, and so on. Those underestimating the power of data in today’s retail environment will no doubt eventually find themselves quickly on the path towards commercial doom.

Big Data In Action

Companies that fail to invest in big data to drive their business forward face challenges in remaining relevant in today’s retail environment. Perhaps most notably, Toys “R” Us went into administration throughout the globe in 2018. While there are several factors that led to this company’s downfall, it can’t be disputed that one of the reasons for this was because the retail giant failed to create a data strategy designed to respond to the way their competitors were now doing business and improve their customer experience. Toys “R” Us were late to the digital age, putting together an omni-channel experience that was cumbersome to use, uncompetitive pricewise, and hampered with delivery service reliability issues.

Conversely, an example of big data and its successful application can be seen in a recent example from Costco. After a California based fruit packaging company announced possible listeria contamination in their fruits sold to consumers by the retail giant, Costco utilized the power of their big data platform to call the individual customers they had on record as purchasing the contaminated fruits – certainly a differentiator from the standard blanket recall warning consumers would typically expect from their corner-store competitors.

What The Players Are Saying

The logistics industry, let alone the retail logistics industry, is currently undergoing a fundamental transition due to the power of data-driven insights and its potential to transform a business. In the 2019 edition of “The Annual Third-Party Logistics Study”, sponsored by Penn State University, 72% of 3PLs surveyed said they plan invest in technology that will drive supply chain visibility for themselves and their partners. 73% of 3PL users surveyed stated they plan to invest in similar supply chain visibility initiatives. In the same study, 43% of 3PL users stated that their 3PL providers needed to improve the way in which they shared pertinent data to their customers. Only 25% of 3PLs surveyed noted a similar problem in data sharing; an interesting dichotomy which may signal those 3PLs able to effectively harness the power of big data will be a key differentiator in the market.

In other words, it is not simply enough to invest in capturing data. Managing the data, dissecting it, formatting it into easily digestible formats for people to use is essential to determining how robust a company’s data strategy is.
See you next time for our 3rd edition of the ‘Our View’ newsletter.

Matthew Venner
Metro Supply Chain Group