It’s no secret that companies like Amazon and Wayfair have revolutionized the consumer landscape for every industry. From retail to furniture, business has had to drastically adjust their value proposition to include final mile. After all, who doesn’t love getting the latest technologies or fashion trends delivered right to their door?
Over the past several years, consumer purchasing has steadily migrated online, away from brick-and-mortar big box stores. This shifting demand for e-commerce has left some of the largest retail importers at risk of losing their customers and profits.
In 2016, large retailers such as Sears, Walmart, K-mart and Macy’s managed to hold on to 34 of the 100 Top Importers spots through fierce competition from e-commerce. Overall, sales fell by 7.4% and 9.4% at K-mart and Sears, respectively, last year, while Payless Shoes had to file for bankruptcy and close almost 500 stores. E-commerce sales growth of 15.2% echoed why these major retailers must adjust to the online model or face severe consequences.
E-commerce has also had a very physical impact on our domestic landscape. As inventories shift to final-mile, infrastructure has been expanding to fit the new model. Currently, Georgia Ports Authority is working to expand Savannah’s intermodal rail further inland to service newly built distribution centers (DC). Retailers are placing their inventory to mirror Amazon’s distribution expectations of 2-day deliveries or risk losing business. Millions of square feet have been added for distribution centers near key ports by retailers like Tory Burch, which opened a 753,000 square-foot facility last year. In addition to improved carrier access from dredging and expansion of the Panama Canal, U.S. East Coast ports are critical for timely deliveries to these markets.
It is becoming more imperative for logistics managers to choose flexible supply chain options. From market shifts in demand to data analytics, leveraging your freight information is critical to survival.
Do you have the right partner on your freight team? If not, contact me, Sarah Ducker, at Green Worldwide Shipping.
