Canadian Retailer - Spring 2017 - 42

SUPPLY CHAIN & LOGISTICS

"There is definitely concern with the lack of
pace in dealing with this," Jacobs says. "The new
entrants are moving much more quickly, and it's
difficult for traditional retailers to keep up with
that. They have legacies. They have long-term
asset investments. They have large organizations
with cultures, with KPIs, with capabilities that
aren't necessarily contributing to this new world.
For them, it's going to be a big change, and a big
change is always difficult."
Rethinking the value chain

Luckily, the pace of change is already accelerating. Industry bodies like Retail Council of Canada
and FCPC have both researched the supply chain
issue at length. In 2015, the Consumer Goods
Forum (CGF) brought together more than 40
CEOs from dozens of major retailers to commission a report entitled "Rethinking
" IT HAS A LOT TO DO
the Value Chain: New Realities in
WITH MINDSET. IF
Collaborative Business", which laid
YOU BELIEVE THAT
out goals for the future (Jacobs was
THE ENTIRE SUPPLY
one of the lead authors).
CHAIN IS A COMPETIOn the ground, grocery retailers
TIVE ADVANTAGE
across the country are beginning
YOU HAVE, YOU
to experiment with new methods;
MIGHT NOT WANT TO Overwaitea launched a home delivCOLLABORATE WITH
ery pilot project in 2014, while reOTHER RETAILERS OR tailers like Loblaw and Walmart are
VENDORS. IF THAT'S
pushing click-and-collect models
THE CASE, YOU'RE
(long popular with electronics comGOING TO SPEND A
panies like Best Buy), wherein onLOT OF MONEY, AND
line orders are picked up at a store
YOU'RE LIKELY NOT
of the customer's choosing. And so
GOING TO WIN."
far, these grocery experiments ap- ERROL CERIT pear to be bearing fruit. Just look at
FCPC Walmart, where 99 per cent of online shoppers are in and out of their
parking lots within 5 minutes, and 86 per cent
of their click-and-collect shoppers would recommend the service to other shoppers.
"Technology enables the consumer to take the
lead," Cerit says. "In the past, the consumer had
no other choice than to drive to the store to buy
what they needed. Today they have all these different methods of purchase. Whether it's clickand-collect, whether it's ordering through Amazon-they have all these options, and retailers
who want to be successful need to make sure they
can deliver service along each of those paths."

42 |

CANADIAN RETAILER

| THE FOOD & GROCERY ISSUE

"A sale is a sale"

Moving forward, Jacobs and Cerit
say it's clear that developing nimble
value networks will require a number
of different strategies. Fortunately,
these strategies are not hard to come
by-not just click-and-collect, but also
using local partners in a "plug-andplay" fashion, or working with providers like Uber to deliver small amounts
of merchandise quickly (important
in a business where freshness is crucial). However, as both men point out,
future success will also require something that might sound strange in the
world of grocery retail: collaboration-
sometimes even with competitors.
"It has a lot to do with mindset,"
Cerit explains. "If you believe that
the entire supply chain is a competitive advantage you have, you might
not want to collaborate with other retailers or vendors. If that's the case,
you're going to spend a lot of money,
and you're likely not going to win."
The idea, as Cerit explains, is for
increased collaboration between
manufacturers and vendors, sharing trucks and warehouse space,
and in the process minimizing both
transportation and labour costs.
"The reality is, it's happening already,"
he says. "What do retailers care most
about on the back end? They want fewer
trucks, and they want full trucks. There's
a push toward same-day delivery, or delivery within an hour, and as a retailer, if
you want to get there, you need to work
with vendors to develop a different approach. Develop locations closer to the
consumer. And partner with different companies to make that happen. If
these things happen, we all win. A sale
is a sale, no matter how it's made."
Looking ahead, looking abroad

Luckily, Cerit notes, when it comes
to the future, many of the blueprints
for success can already be found by
looking abroad.

Table of Contents for the Digital Edition of Canadian Retailer - Spring 2017