„Whether the trade logistic is able to remain competitive in the future, or whether new player barge between end customer and trade, is highly dependent on the position trade takes in the process of digitalization.“ This is the core result from the „EHI scenario study on trade logistics 2025“, which was conducted in cooperation between the EHI Retail Institute in Cologne, several logistics experts from trade and ScMI - their methodical partner company.
The first key results from the study were presented on the GS1’s „ECR-Day 2016“ in Berlin. In the course of nine varying scenarios, the study offers insights into trends and developments in trade logistics until 2025, which serve companies as a compass for forming future business models. These scenarios were visualised by ‚trade planets‘ revolving around a system called ‚planet earth‘. Here, the different scenarios are characterized by the degree of trade activity and the extent of digitalization.
Scenario 1: Saturation effect within the digitalization process (Glamoroso)
The first planet „Glamoroso“ describes a scenario where the digitalization process experiences saturation. Numerous flagship stores, increasingly from brands or manufacturers, evolved and are fostered through onward urbanisation. Thanks to showrooming concepts these stores offer a special shopping and product experience to their customers. This experiential shopping experience influences the buyers’ decision to take a look on products in stationary shops before logistic partners deliver the costumers‘ desired products home. Hence, the trade logistics is a highly active player in the process of digitalization. At the same time, the complexity of logistics increases due to the rise of return shipments.
Scenario 2: Consolidation of on-and offline world (Schizophrenia)
Mergers between on- and offline worlds exist only marginally leading to the co-existence of e-commerce and stationary trade on „Schizophrenia“. Nevertheless, both are rarely coordinated or compatible. As a result of the parallel existence of both worlds, the complexity in trade logistics naturally increases resulting in mounted organizational work and processing within the supply chains. At the same time, more and more manufacturer and provider coming from logistics, aim to gain foothold in the trading world. These parties are able to draw back on a substantial reservoir of services whereby they are able to work more efficiently on the market than the logistic of the trade. Consequently, these third actors will barge in between trade and end-customer to compete with the established structures on the market.
Scenario 3: Competition within Supply Chain Management (Explora)
„Explora“ is characterized through a higher degree of merging e-commerce and stationary trade. Therefore, this planet demonstrates a classic omni-channel trade with focus on smaller sales floors and closeness to its customers. A higher automatization in logistical processes is a consequence of numerous delivery points (e.g. packing stations) and the concentration on the end customer in the area of logistics and supply chain management. Moreover, increased competition in the SCM can be noted between trade logistics and the manufacturers‘ logistics. Both developments result in a massive increase of complexity in trade logistics.
Scenario 4: Stationary trade disappears totally (Deserto)
In the worst case scenario, the total disappearance of stationary trade is forecasted. In many areas of the planet „Deserto“, stationary trade will be eliminated whereas online trade clearly dominates. The logistics vanished completely from trade, as online-pure-player are able to create own highly automated logistic solutions. Consequently, trade lost control on their supply chain. The logistics industry tries to secure their standing through embedding IT systems and technologies in already existing IT landscapes.
The Cologne based EHI Retail Institute is a research and educational institute for trade and its partners. The EHI uses the Scenario Management of its methodological partner ScMI in order to depict future images for the developments in trade logistics in the upcoming 10 years.
The EHI expert team consists of 31 logistic decision makers from ten trade companies of industries as grocery, hard goods, textile and DIY, as well as 9 service provider companies coming from areas as strategic consultancy, IT and logistics. Within the scope of three days, the team identified 22 key factors and discussed their influence on trade logistics. At the end, nine scenarios were evolved, which are able to support concrete decision making processes within strategic planning.