Retail Journal Volume 2

Amazon has been redefining the retail landscape since the 1990s, by teaching the world how to shop online. More recently though, both Amazon and Google have made ownership of the last mile a key strategic priority – as seen from the launch of Amazon Prime, AmazonFresh and Google Shopping Express. This is radically changing customer expectations, as ordering online with same day delivery introduces an attractive alternative to going to stores for many.

In some sectors, particularly where digital products have overtaken physical products (e.g. music), it is unsurprising that stores are becoming obsolete. Outside of these spaces though, stores will almost certainly reduce in number and size, but still remain relevant, as customers still want to experience products and need services that stores can offer much more effectively than other channels. That said, individual retailers do need to take steps now to protect themselves from the worst of the store count reduction. 

Historically, suppliers have had the upper hand in negotiations, as they have had more data and more resource dedicated to drawing out the insights from the data. Retailers have slowly been turning the tables, and started using more data and insights to squeeze suppliers. However, even after achieving excellence in negotiations there are further opportunities to take cost out by partnering with suppliers. The balance between confrontation and partnership is a difficult one to strike and only a few retailers consistently manage to get there today. 

The business case for sustainability is fundamentally a long-term one, but sustainability also offers tangible opportunities to drive growth and market success and to reduce costs today. For example, through market share growth from leading own-label sustainable products, or from efficiency savings, such as on reduced packaging, reduced landfill waste, transport improvements and improved energy efficiency.