SUPPLY CHAIN – THE NEW ROCK & ROLL

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Critical importance of supply chain and logistics competencies

“In this era of online retailing and Omni-commerce, there are two leadership competencies that will differentiate tomorrow’s executive leaders in retail. They are a deep understanding of social-media fueled marketing and Internet focused retailing, and a deep awareness, understanding and appreciation of end-to-end supply chain inventory deployment and fulfillment capabilities. From our lens, recruiting for retail C-level executives has been too focused on classic merchandising, finance or traditional brand marketing”. Ferrari Group

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GET IT TO ME

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THE EXPECTATION OF MORE CHOICE KEEPS RISING

•  The norm will become 7 day per week, day time or evening, 1 hour timed slots, with advanced notice

•  Not always an economically sound offer for retailer or buyer

•  Multiple pick batches & cut-offs, multi-way sortation, sophisticated carrier management solutions become standard

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ARCHITECTING FOR AGILITY IN A RAPIDLY CHANGING WORLD

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YOUR CUSTOMER HAS A VIEW ON DELIVERY

Source: Collect +, CILIT

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THE FINAL MILE IS THE ZERO MOMENT OF TRUTH

• “Supply chain directors will be brand directors”

Richard Cristofoli,

Debenhams Marketing Director

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LET ME GET IT

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WHERE CAN I GET IT?

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ANYWHERE IS A COLLECTION POINT

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NOT ALL PARTNERS WILL BE OBVIOUS

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THE STORE MAY NOT BE AN IDEAL COLLECTION POINT

•  The greatest growth is typically coming from your highest cost-to-serve channels: convenience & home

•  Supporting a click & collect proposition into some of those convenience locations is particularly challenging

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THE STORE EXPERIENCE IS ALSO CHANGING

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RANGE EXPANSION IS A STRATEGIC IMPERATIVE

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DROP SHIPPING A ZILLION SKUs

7 million home products 8,000 suppliers $1 billion sales (2013, up 50% YoY)

500,000 products 800 brands

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TAKE IT BACK

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THE RISE OF RETURNS FRIENDLY COLLECTION POINTS

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IT’S NOT SOLD UNTIL IT’S USED

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AND WHAT OF THE STORE?

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Does my bum look big in this?

•  Lots of retailers have experimented with virtual mirrors and augmented reality

•  Social proof is a powerful support when shopping

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The boundary of a store is dissolving

•  The humble shop window is a 24 hour, interactive digital shop

•  And who needs an actual shop window

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Inside, the definition of a store is changing

•  Digital interaction, reduced stock, cleaner lines are becoming common

•  The shop is the social space, the theatrical space

•  Handheld devices enable a different type of customer interaction

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Minority report is here

•  Facial recognition has been around for a while

•  Footfall tracking can now approach web-style journey/dwell/conversion analysis

•  Personalised, enriched experiences differentiate

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Google Glasses

• All manner of issues around communications and privacy etc

• But adoption by sell-side rather than consumers may be earliest uses –  Fiat Brazil is using it for virtual tours

–  Virgin Atlantic is also engaging with it

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WHAT DOES IT ALL MEAN FOR ME?

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APPROACH PARTNERSHIPS DIFFERENTLY

1.  With increasing uncertainty and more need for flexibility and fail-fast approaches, the risk-sharing model need to change

2.  Rather than long-term contractual relationships, we can expect a move to shorter-term partnering

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BE AGILE

1.  Architect for rapid adjustment and learning

2.  This is different from designing for maximum flexibility

3.  Root the foundations in customer-centric thinking

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SOME CHARACTERISTICS OF NEW SUPPLY CHAIN LEADERS

1.  Commercial and entrepreneurial in nature

2.  A change agent

3.  Strong influencing skills 4.  Operating cross functionally 5.  Builds an innovation capability

6.  Embraces a fail-fast mentality

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THANK YOU