You know, going to the store and picking up a widget seems like the most straightforward thing in the world, but in reality, it is one of the most complex.
Thousands of moving parts had to align to get that widget to that place in space and time where you could pick it up and buy it, yet it is something we as consumers take for granted every day.
Retail logistics managers, however, do not. They know firsthand just what goes into making retail possible – like these.
With particular respect to eCommerce planning to fulfill orders that come through a website produces an entirely new dimension to retail logistics. Demand must be accounted for, and items must be packaged and stored until ordered, then handled and shipped when the order comes in.
Packaging is another often-overlooked element of retail logistics, and not the type of packaging that comes from the manufacturer (which, technically, is still an aspect of overall supply chain management). This packaging refers to how products are prepared for handling and shipping, to protect them while they are palletized, in a warehouse, as well as during shipping.
Warehousing is a huge aspect of retail logistics, because a receiving bay and back end of a retail establishment can only accept so much overstock before it becomes untenable. Before the freight gets there, it needs to be accurately and accessibly arranged in a warehouse with the appropriate climate controls to protect and store it, with both long and short-term capabilities.
How do a retail establishment’s products get from the warehouse or distribution center to each of the retail’s points of sale (brick and mortar locations)? That is a question for transportation, which is an indelible element of all retail logistics structures. Some businesses own their own assets (trucks) but others work with third-party shippers to get the job done. Either way, there’s no retail logistics without it.
Failing to forecast demand is akin to failed inventory management. If you don’t order enough inventory, you won’t be able to meet orders. If you order too much, you will experience higher than average costs associated with warehousing – bringing about crippling inefficiencies. Accurate demand planning takes into account historical buyer behavior patterns and leverages accurate reporting to make the most effective predictions for sales forecasting – enabling more streamlined and superior inventory management.
This is a catch-all category that involves and is impacted by demand planning but is also larger than it. It encapsulates point of sale technology, asset protection protocols, and much more. Mostly, inventory management is about data. The goal is to have just as much as you need to sell in each monitored period, with no excess, all while entirely eliminating shrink – but that is, of course, far easier said than done.
Returns management is another critically important aspect of retail logistics, and one that is directly tied to inventory management, transportation, customer satisfaction, and overall profitability. All retail establishments that accept returns should have well-established reverse logistics protocols in place so that customers know how to return items and know what to expect in terms of refunds, replacements, or credits. On the other side, the business itself should have streamlined procedures for processing returns and sending back returned items.
Don’t Do It All Yourself: Offload Some of Your Retail Logistics to a 3PL
As you can see, retail logistics is a convoluted network of procedures and infrastructure that together are critical to ensure a streamlined supply chain and happy customers. Because of the complexity involved here, many retail establishments work with 3PL, or third-party logistics providers, in order to achieve economies of scale and develop more efficient processes. If your business could be improved by better logistical operations, it’s something you should consider as well.